November / December 2023

THE MAGAZINE FOR MANUFACTURED HOUSING PROFESSIONALS

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contents

30

When I started thinking about design trends and where the world is going, I thought a great place to start would be to ask the artificial intelligence source ChatGPT what it saw in its crystal ball.

The national manufactured housing sector has been on an upswing for the past several years, and properties in the Northeast have posted similarly strong performance.

50

VOLUME 6, EDITION 6 | NOVEMBER / DECEMBER 2023 | MHInsider.com PUBLISHER Patrick Revere | patrick@mhvillage.com SENIOR GRAPHIC DESIGNER Merit Kathan | merit@mhvillage.com CONTRIBUTING EDITOR George Allen | gfa7156@aol.com EDITORS Sean Vichinsky | sean@mhvillage.com, Dawn Highhouse | dawn@mhvillage.com CONTRIBUTORS Nick Bertino, James Cook, Suzanne Felber, Matt Hershowitz, Andrew Keel, Darren Krolewski, Tony Petosa, Anthony Pino, Rachel Reid, Kellie Speed, COVER PHOTO Courtesy of Beko ADVERTISING SALES (877) 406-0232 advertise@mhvillage.com EDITORIAL & GENERAL INQUIRIES Patrick Revere | 2600 Five Mile Road NE Grand Rapids, MI, 49525 (616) 888-6994 patrick@mhvillage.com

HAPPENINGS 8 Industry Happenings INDUSTRY NEWS 12 Designing Your Debt Portfolio EVENTS 16 Events & Tradeshows 18 Louisville Show Preview COMMUNITY 22 Why Selling Now is So Much Better Than in 2020 26 Key KPIs For Community Operators

BUILDER / RETAILER 38 Dick Grymonprez: A Career Spent Overseeing the Development of Park Model RVs 41 Cavco Launches A National Community Sales Team MARKETING 44 It’s All About The Numbers: The Essential Metrics Every Marketer Should Know SERVICE / SUPPLIER 55 Manufacturing a Better Community; Sustainable Utilities Managed ALLEN LEGACY 60 Manufactured Housing Consultants Past and Present

MHInsider™ is published by: Although we make every effort to ensure that the information in this issue was correct before publication, MHVillage, Inc. and the publisher do not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from negligence, accident, or any other cause. Opinions expressed are those of the author or persons quoted and not necessarily those of MHInsider or the publisher MHVillage, Inc. Copyright ©2023 MHVillage, Inc. All rights reserved. Reproduction of MHInsider content, MHI or other contributor content, in part or in whole, is prohibited without written authorization from MHVillage, Inc.

2600 Five Mile Road NE Grand Rapids, MI 49525 (800) 397-2158 www.MHVillage.com

MHINSIDER.COM | 3

from the

PUBLISHER Fall is an Invitation Closing out ’23, the feeling that

“The problem is that really what you’re

resonates most deeply with me is that

shipping is a bunch of air.” We then began

return to “normalcy” we all considered

to visualize the homes, fully equipped

so often throughout the pandemic.

and ready to live in, as containers for the

Often, the most productive ingredient

purpose of that overseas voyage. What

in getting back to “business as usual” is

could you safely fill a home with that’s

the impromptu, organic interaction with

needed in, say, South America or Indone-

vice president of

colleagues. In just the last few weeks,

sia? In a single five-minute conversation,

communications

we’ve seen and heard from manufac-

we turned the idea of shipping container

tured housing professionals in Atlanta,

homes on its head. Silly as it may be, it

Nashville, Palm Springs, Reno, Dallas,

was a good exercise.

Patrick Revere is

at MHVillage and publisher for the MHInsider magazine and blog for industry

and now Chicago.

Without getting too neuro-dramatic…

The value of attending so many great

the key is to maintain an open mind and

industry gatherings, including the NCC

to see problems as challenges. It’s some-

Fall Leadership Forum provided by MHI,

thing like seeing constructive criticism

language, and

is that you get to see and feel the change.

for what it is and being willing to level

communication.

You get to BE a part of the change. There’s

it with two or three potential solutions.

nothing like walking a home, feeling the

The manufactured housing industry is

weight of that much-needed new hard-

very nicely poised to build and capitalize

ware, or being personally introduced to

on that positive interaction.

professionals.

His background is in print news,

the latest tech interface.

Likewise, MHInsider is your industry

And, of course, there are the face-to-

partner, and if you have concerns, a par-

face conversations. You never know what

ticular challenge, or just want a place to

will come up!

talk through your next big idea, please,

At a meeting not too long ago, in a conversation with a colleague and friend, we wound our way through a silly concept about how to ship homes overseas.

4 | NOVEMBER / DECEMBER 2023 EDITION

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Industry Awards 2023MHINSIDER

IN RECOGNITION OF THE HIGHEST ACHIEVEMENTS IN MANUFACTURED HOUSING

The 2023 winners for MHInsider’s annual industry

Our MHInsider editorial board selected among

awards have been chosen and will be announced

more than 80 candidates for the MHInsider Industry

in the January/February edition of the maga-

Awards. Deliberations continued among our inter-

zine, circulated at the Louisville Manufactured

nal team and external advisors until there were 22

Housing Show.

nominees for awards. Regional and state associa-

The fourth annual MHInsider Industry Awards tell a decades-long story of hard work, ingenuity,

tion directors from across the country chimed in to decide winners.

perseverance and a passion for innovative thought and business leadership.

The Advocacy Award honors efforts toward outreach and education that reach beyond professional position or title.

The Influencer Award honors individuals who by their presence and authentic implementation of ideas have created widely held business practices and wholesale improvement for the industry.

The Leadership Award honors individuals who have earned the highest levels of industry achievement through their corporate or organizational leadership approach.

The 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.

HAPPENINGS

industry HAPPENINGS Transactions Lender, Brokerage Arranges Fannie Mae Credit Facility Yale Capital Advisors arranged a $150 million Fannie Mae Credit Facility for an unnamed national man-

plant will employ more than 260 workers who will supply regional building efforts.

Vermont Approves Funding for Water Improvements

ufactured home community operator. The portfolio

Gov. Phil Scott and the Agency of Natural Resources

of 15 properties was primarily of 4-star quality and

in Vermont have announced the availability of $10

had an occupancy of 70 percent with on-going lease

million for manufactured home communities in

up. The facility will provide the borrower with the

need of water infrastructure improvements. “This

flexibility to add, subtract, and substitute properties,

historic funding will help ensure residents in these

as well as to borrow additional funds.

communities have access to functional and resilient drinking water, wastewater, stormwater, and drainage

Flagship Buys Indiana, Ohio Communities

systems,” Gov. Scott said.

Flagship Communities, a real estate investment trust, has acquired a manufactured housing commu-

San Diego-area Property Sells for $4.4 Million

nity in Evansville, Ind., for $23 million. “Evansville

Shady Lane Mobile Home & RV Park in El Cajon,

has become a strategic component of Flagship’s

Calif., recently sold for $4.4 million. The 41-home-

MHC portfolio since we began operating there in

site property was purchased by an unnamed local

2015,” Kurt Keeney, Flagship president and CEO, said.

investor. Marcus & Millichap brokered the deal,

“We are excited to add our 11th community in this

reporting it had taken 10 offers on the property in

market, in what will be a best-in-class offering for

three days on the market.

Evansville and the surrounding metro area.” The comOhio for $3 million.

Personnel Skyline Champion Names Board Chairman

Clayton Opens New NC Facility

Capel as board chair to work with the board and ex-

pany also has purchased a community in Lakeview,

Skyline Champion Corporation has named Eddie Clayton, the Knoxville-area based builder, is opening

ecutive team to drive company growth. “I am thrilled

a factory in Stanly County, N.C., east of Charlotte. The

to have Eddie as our new chair and am confident that

8 | NOVEMBER / DECEMBER 2023 EDITION

his strategic insights and commitment to excellence

reviews and online search activity to generate a list

will be invaluable as we take our next steps on this

of market leaders.

exciting journey,” Skyline Champion Corporation President and CEO Mark Yost said. Capel had been with Manhattan Associates and joined the Skyline Champion board in 2019.

Washington Home Seller Extends Awards Streak Valley Quality Homes, a Yakima, Wash., manufactured home retailer, for the 30th consecutive year

Kidder Mathews Names New VP

has been named the top dealer by Statistical Surveys

Kidder Mathews has added Rand Hoffman to its

Inc. The award-winning formula for Valley Quality

Portland office in the roll of vice president. He spe-

Homes centers around its commitment to delivering

cializes in sales and acquisitions of manufactured

exceptional quality homes and customer service.

housing and RV parks across the Pacific Northwest and California with a transaction volume exceeding $120 million. Hoffman holds licenses in Washington, Oregon, Idaho, and Nevada, and previously worked with CPX and Marcus & Millichap.

In Memoriam Lending Professional Laid to Rest Ward Whitfield, who worked with 21st Mortgage, passed away Aug. 23 at the age of 63. Born in Monahans, Texas, he moved with his wife Karla to Knoxville

Legacy Housing Names New CFO

in 1998 for the new opportunity. Those who worked

Bedford, Texas-based Legacy Housing Corporation

closely with Mr. Whitfield were drawn to his leader-

has named Jeff Fiedelman as its new chief financial

ship, intellect, courage, and determination. The work

officer. Fiedelman previously has worked in finance

role he cherished most was that of mentor, and he

with Pioneer Wine & Spirits, Oryon Technologies,

was known to readily share a word of encouragement.

and Substrate Technologies. “Jeff is a proven CFO

Services were held at Sequoyah Hills Presbyterian

and brings a wealth of experience in the areas of

Church with the Rev. Mark Lampley officiating.

finance, accounting, and operations to Legacy.

He has held senior leadership positions at public and private companies, and his experience, background, and education will be a great addition to our leadership team,” Legacy Housing President and CEO Duncan Bates said.

Awards Rent Manager Named Top Performer London Computer Systems, the developer of Rent Manager property management software, has been named a top property management software product

by Capterra, a free online service that helps organizations find the right software. Capterra Shortlist is an independent assessment that evaluates user

HAVE INDUSTRY NEWS YOU'D LIKE LISTED HERE? Contact our Publisher, Patrick Revere, at (616) 888-6994, or patrick@mhvillage.com

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INDUSTRY NEWS

Designing Your Debt Portfolio

by Nick Bertino, Tony Petosa, and Matt Herskowitz

For over a decade, commercial

taking on more interest-rate

real estate investors had the wind

risk to boost their returns and

at their backs when it came time

execute cash-out refinances in

to refinance their properties.

intervals as short as two to five

In most cases, due to declining

years. While variable rate loans

interest rates and increasing

typically require borrowers to

property values, borrowers were

purchase interest protection,

typically able to refinance into

such as an interest rate cap or

lower interest rates and pull out

swap, these hedging instruments

additional cash beyond their ma-

remained relatively cheap to pur-

turing loan balances. Additionally,

chase during a low interest rate

shorter-term variable rates with

environment. Variable-rate loan

flexible prepayment structures

options also served as a backstop

offered even lower rates than

for borrowers whenever a sporadic

fixed-rate loans, allowing those

short-term increase in fixed-rate

borrowers who were comfortable

Treasury yields occurred.

12 | NOVEMBER / DECEMBER 2023 EDITION

For many investors who had only experienced a

rate borrowers whose initial rate caps are nearing the

low inflation, declining interest rate environment

expiration date would be wise to reach out to their

there was no reason to expect a change in long-term

loan servicer to see if a shorter-term, and therefore

trends. The 10-year Treasury yield reached nearly 16

less expensive, interest rate cap might be an option.

percent in 1981 but persistent tightening from the Fed

As mentioned above, in prior years variable-rate

ultimately tamed inflation and led to a prolonged

debt was often viewed favorably by borrowers seeking

decline in Treasury yields with the 10-year index

shorter-term loans with low interest rates and prepay-

dropping to 0.52 percent in 2020. Removing the recent

ment flexibility. And for other borrowers, variable-rate

pandemic lows, the 10-year Treasury yield hovered in

loans served as viable backup option during times

the 2 percent range for most of the previous decade.

when fixed interest rates spiked. But in today’s market,

But today, things are different. After pandemic-relat-

SOFR has risen to a level where the starting rates

ed conditions and government stimulus resulted in inflation spiking to double-digit levels in some categories, the Fed ultimately made a dramatic shift in policy. Over the past two years, we have seen a drastic increase not only in U.S. Treasury yields (the index tied to most fixed rate loans), but also SOFR (which has replaced LIBOR as the index tied to most floating rate loans) after the Fed increased

on variable rate loans can be as

Given we are experiencing a unique period in our economic history where we saw reignited inflation cause a dramatic shift in monetary policy, we believe this to be an optimal time to revisit your short and long-term assumptions on the economy and future interest rates.

much as 2 percent higher than longer-term fixed-rate loans.

As a result of these high rates combined with the now higher costs of interest rate caps, demand for variable-rate loans has declined substantially. As a way to fill this void, the Agencies are now offering more aggressive underwriting and pricing on their 5-year fixed-rate structures; essentially providing this

rates eleven times. Faced with

option as a proxy to variable-rate

the headwinds of higher fixed

loans. For most transactions,

and variable interest rates, it is

they will underwrite to as low

now more critical than ever for

as a 1.25 times minimum debt

borrowers to evaluate how they

coverage ratio on 5-year loans

plan to build and design their

and also provide flexible prepay

real estate debt portfolios.

options, such as 3 years of yield maintenance followed

Borrowers who are currently holding variable rate

by a 1 percent prepayment penalty or 3 years of yield

loans in their portfolios are not only paying higher

maintenance with the last two years of the loan term

interest rates than they originally started with, but are

open to prepayment without penalty. Additionally,

also saddled with higher costs related to purchasing

since these are fixed-rate loan structures, no interest

interest rate caps, which are required by most lenders,

rate caps are required, providing further cost savings

including Fannie Mae and Freddie Mac (the Agencies).

versus variable-rate loan executions. A shorter fixed-

As it relates specifically to the agencies’ variable

rate term may also be a viable option for traditional

rate loans, at the time of loan origination borrowers

fixed-rate borrowers who need to refinance into new

were often required to purchase either a 3-year or

debt but are forecasting that interest rates will be

4-year renewable interest rate cap. Recognizing the

lower in five years as compared to where they are

increased cost of interest rate caps as required by

now and are therefore hesitant to lock in longer-term

their programs, today both agencies provide flexibility

fixed-rate debt.

related to reducing the required term on renewal

So, what about borrowers with properties

caps to as short as one year. Given the higher costs

currently encumbered by fixed-rate loans that »

of interest rate caps in today’s environment, variable MHINSIDER.COM | 13

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INDUSTRY NEWS

are still a couple of years from maturity and

rates around your maturity dates and then designing

have prepayment penalties?

your debt portfolio accordingly. MHV

Question Conventional Wisdom

Herskowitz are loan originators at Wells

Tony Petosa, Nick Bertino, and Matt Conventional wisdom would say it probably makes

Fargo Multifamily Capital, specializing

sense to hold fixed-rate loans to maturity since the

in providing financing for manufac-

existing interest rates on those loans are likely lower

tured home communities through their

than what can be obtained in today’s market. But,

direct Fannie Mae and Freddie Mac

perhaps this is when you might want to question

lending programs and correspondent

conventional wisdom. As a first step, borrowers

lending relationships.

analyzing their existing debt portfolios need to ask

If you would like to receive future

themselves whether they believe interest rates will be

newsletters from them, or a copy of their

higher at the time their loans mature. It is important

Manufactured Home Community Market

to note that fixed-rate loans are typically subject

Update and Financing Handbook, they

to yield maintenance or defeasance prepayment

can be reached at 760.505.9001 (Tony),

penalties, and these prepayment penalties diminish

858.336.0782 (Nick), or 760.840.3608

over time assuming a steady or increasing interest

(Matt); and email: tpetosa@wellsfargo.

rate environment. Given how drastically Treasury

com, nick.bertino@wellsfargo.com, or

yields have increased, fixed-rate loans maturing over

matthew.herskowitz@wellsfargo.com.

the next two to three years with a standard yield maintenance prepayment structure may be able to be paid off with as little as a 1 percent prepayment penalty (the minimum penalty typically associated with yield maintenance) while loans subject to defeasance may actually be able to be paid off at a discount. For borrowers who are of the opinion that interest rates will be higher two to three years from now, it likely makes sense to refinance early if they can pay their loan off with a minimal prepayment penalty while at the same time locking in a new long-term fixed rate prior to rates increasing further.

Given we are experiencing a unique period in our economic history where we saw reignited inflation cause a dramatic shift in monetary policy, we believe this to be an optimal time to revisit your short and long-term assumptions on the economy and future interest rates. While the Fed is determined to battle inflation, there are some structural challenges that lay ahead such as a declining workforce and the risk of wage price increases that may result in rates remaining higher for longer. We also suggest reviewing the terms of your existing loans for key prepayment provisions and dates and confirming that your real estate schedule is up to date. Developing a financial business plan is now more challenging, but we recommend starting by forming future assumptions on MHINSIDER.COM | 15

EVENTS

Events

& Tradeshows

Louisville Manufactured Housing Show

MHI Winter Meeting

Wednesday, Jan. 17 — Friday, Jan. 19, 2024

Monday, Feb. 19 — Wednesday, Feb. 21, 2024

Louisville, Ky. | Kentucky Exposition Center

Amelia Island, Fla. | Omni Amelia Island

The Louisville Manufactured Housing Show is the

Hosted each February, the MHI Winter Leadership

nation’s largest indoor show for manufactured home

Roundtable is the first MHI members-only event of

professionals. The annual gathering is organized

the year. This program brings together MHI members

by the Midwest Manufactured Housing Federation,

to hear from industry experts on topics relevant to a

supported by the state associations of Illinois,

broad group of manufactured housing professionals.

Ohio, Michigan, Indiana, and Kentucky. The show

Event sessions are followed by an open discussion.

brings out an array of new manufactured home designs, the latest in technology, the best in supplier offerings, and a look at all the newest amenities and offsite-built options.

International Builders’ Show Tuesday, Feb. 27 — Thursday, Feb. 29, 2024 Las Vegas. | Las Vegas Convention Center The NAHB International Builders’ Show® (IBS) is the premier global annual event to connect, educate, and improve the residential construction industry.

It is a hub for new product launches, construction demonstrations, industry thought-leader sessions, home tours, workshops, and panel discussions. Manufactured home and modular home professionals will showcase their products and services in the convention center and in the outdoor village.

16 | NOVEMBER / DECEMBER 2023 EDITION

IF YOU HAVE AN EVENT OR GATHERING YOU WOULD LIKE TO HAVE LISTED WITH MHINSIDER, PLEASE CONTACT US AT: www.mhvillage.com/pro/manufacturedhousing-industry-trade-shows/

Join Us at the Midwest’s Premier Event for Manufactured Housing Professionals

Registration is NOW OPEN! KENTUCKY EXPOSITION CENTER January 17-19, 2024 Louisville, Kentucky

Join over 3,000 attendees at the 2024 Louisville Show, where you can: Explore the latest home trends and innovations from the industry’s leading manufacturers by touring dozens of model homes on display Discover products and services from more than 100 exhibitors, and network with industry professionals from over 1,000 companies

THE YEAR’S FIRST MAJOR EVENT FOR MANUFACTURED HOME PROFESSIONALS

Learn from industry leaders as they share their expertise and insights for 2024 and beyond

REGISTER ONLINE AT

TheLouisvilleShow.com

Produced by the Midwest Manufactured Housing Federation and Its Five Member States: Illinois Manufactured Housing Association Indiana Manufactured Housing Association Kentucky Manufactured Housing Institute Michigan Manufactured Housing Association Ohio Manufactured Homes Association

SHOW MANAGED BY:

EVENTS

The 2024 Louisville Manufactured Housing Show Sets Up the Spring Selling Season

While manufactured housing professionals enjoy the holiday season, they’re also planning for the start of 2024, and that means The Louisville Show, being held Jan. 17-19 at the Kentucky Exposition Center.

The show, held by the Midwest Manufactured Housing Federation — a consortium of state executives and other professionals from Illinois, Indiana, Kentucky, Michigan and Ohio — is held each year to showcase the latest in home designs as well as vital products and services.

This year organizers anticipate a major boost in participation from industry builders, with about 40 homes on display. There are more than 100 exhibitors registered to attend. Visit www.thelouisvilleshow.com to register.

Educational Seminars at The Louisville Show The educational seminars at The Louisville Show will be hosted by Ken Corbin, a manufactured home sales veteran. Presentations and panels will be on topics to include How to Manage Community Infill, Industry Risk, New Building Techniques, The Lending Environment, and How to Market Homes.

New Headquarters Hotel for Louisville ‘24 Accommodations for manufactured housing professionals attending The Louisville Show in 2024 will include Hyatt Regency Louisville as the Headquarters Hotel. Attendees at the downtown hotel will have the option to use a shuttle that will run between the Kentucky Exposition Center and the host hotels.

The 2024 show will be the first the MMHF has partnered with MHVillage as the show director, organizing all aspects of the show. MHV

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Brokerage & Ownership Mgmt

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Bill Haldane

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COMMUNITY

Why Selling Now is So Much Better Than in 2020

by James Cook

At first glance, this title may sound crazy, but there is a new paradigm that I have been observing, and watching clients enjoy for the last nine months or so. When you get a good appraisal or broker’s opinion of value today, it will almost certainly come in 15 to 25 percent below the peak of 2021 or early 2022, and in most of our client’s cases, this translates to a significant amount of money, millions usually.

So how can I say this is a good thing for you, the seller?

Well, let’s first discuss why commercial real estate values are down, before you move on and

To do so, the buyer would have to withdraw $3.5

assume I am crazy.

million, plus transactional costs from their treasury

Interest rates have increased from a 3 or 4 percent to 6 or even 8 percent within the last 18 months.

Believe it or not, this has a pretty big impact on

or savings account, and then lose $80,000 a year after debt service or make a negative rate of return of roughly 2 percent.

MHC values. Why is that when all the buyers are

This scenario is very simplified, but you get the

using cash? Well, there are a couple of things to

idea. No buyer with millions in equity today is

note. While buyers may close all-cash sometimes,

likely to make that choice. Then you ask, why not

almost every major buyer eventually finances their

just pay all cash?

purchase. So, the cost of debt doubling, on let’s say

Well, equity today is making 8-plus percent, typi-

a $10 million purchase, is huge. When we used to

cally with additional upside, while the deal you are

sell great properties at a 4 or 5 percent cap rate, a

offering only pays a 4 percent rate of return, with

$400,000 net income could translate to a $10 million

work and risk. The buyer can buy a 5-year, or 10-year

in value (i.e., a 4 percent cap rate). Today, a loan for 65

treasury note and make a state tax-free income

percent of that purchase price, or $6.5 million, will

of 4 to 4.5 percent (as of mid September). Therein

cost $390,000 in just interest, assuming a 6 percent

lies the problem, to which there are only two solu-

rate. Now, if you want to amortize the loan, the all-in

tions; lower your price and/or have TONS of upside

payment would be closer to $480,000 on a 30-year

remaining in your property.

amortization schedule. So, as the seller of a property

Sorry to go into a wonky math lesson, but I like

producing $400,000 in net income, you ask the $10

to use examples instead of generalizations. Here’s a

million price tag you were offered two years ago,

little proof I may be right. The fact that ACROSS ALL

or even a year ago, by the laggards in the market.

22 | NOVEMBER / DECEMBER 2023 EDITION

SECTORS of commercial real estate sales have fallen by 70 to 80 percent in 2023.

The Good News and Why Now Is the Time to Act

That is the worst slowdown in almost two decades.

With all that perspective, let’s accept one thing

The market is screaming that values are down, even

— 2020, 2021, and early 2022 were a major bubble.

though no seller wants to hear it. To add insult to

The Fed created this bubble and burst it, and I can’t

injury, $2 to $3 trillion in commercial loans balloon

figure out why they don’t just take a long pause on

by 2025, and the debt markets are the tightest they

rate hikes. The speed and magnitude of the hikes

have been since 2008.

are damaging the banking industry and, in turn,

Roughly half of those loans will default and either end up in an “extend and pretend” situation or fore-

commercial real estate, and will eventually cause a wave of stress across the entire economy.

closure. This has lenders reeling and very nervous

OK, let’s get to the good news. If you get real, right

about putting new money on the street. Add that to

now, accept the current market pricing, hire the right

the fact that every treasury they bought and every

broker, run a process, and get bids from all the real

loan they made in the last 4 to 5 years has had to take

buyers at once. There is still cash in the transaction,

a write-down, which is the kind of thing that caused

many times more than 80 percent. The main reason

SVB, Signature, and then First Republic to fail.

this makes sense is that today your cash actually has

While no owner is happy to hear their property

value. That is the good news. Two years ago, you would

is down by 20 percent, or more in some cases,

have sold, paid your taxes, and probably netted $7 mil-

I will try to layout below why they are in a much

lion post-tax (using our $10 million deal and assuming

better spot selling that same community today for

you are a long-time holder, fully depreciated, no debt,

$8 million than they could have been in two years

etc.). The treasury markets were yielding an average

ago for $10 million.

of 1.5 percent, so on your $7 million, you would have » MHINSIDER.COM | 23

COMMUNITY

netted a whopping $105,000 a year. Here is the fun part. When treasuries went to 4-plus percent your

How You Can Take Advantage So, how are we getting deals done?

cash value of those treasuries would be decimated.

Volume is down and listings are down, so funds

Compare that with an owner selling the same deal

and buyers still in cash that must be deployed are

today for $8 million, netting $5.6 million in post cap

jumping on the best properties and the ones with

gains, recapture, the Affordable Care Act, and then

a lot of upside. Then, in “market deals”, where the

purchasing 4 percent treasuries. Their net income is

seller doesn’t want to take as big of a discount, we

$224,000, or two times higher than before.

are seeing them agree to owner financing. We are

Here is the clincher… many people almost expect

seeing as many seller-financed deals this year as we

the Fed to tear at the economy like they have the

have seen in the last 10 years. This can be a win-win

banking system. Then, they expect the Fed to reverse

since the seller gets their price and surety of closing

and lower rates. Now, that could take 12 or even

since there is a guaranteed lender, and buyers are

24 months, but your treasuries at 4 percent yield

often willing to put up non-refundable money much

will go up nicely in value.

faster with the lender-risk removed. The seller also

The take-home is this: You can’t time the market,

gets a pre-capital gains-tax return that is above the

top or bottom (as Buffet has always said), but a seller

treasury yield, and the buyer gets a rate that is lower

getting 80 percent of their highwater-mark price

than the market rate. Spreads between treasury rates

today is a better deal for seller than the buyer. Almost

and borrowing rates are pretty high, mostly 200-300

anywhere sellers put their money in 2020-2022 it

basis points, in some cases 400 basis points, which

would be down, and in many cases, more than 20

is why financing is so hard on returns.

percent. So, you made the right move to hold past the peak, but don’t stay too long at the party.

This makes for a perfect opportunity to carry paper and take advantage of that delta while solving both

I think we are in the perfect spot in the market

the buyer’s and seller’s challenges. MHV

where an owner can still sell for a good number, buy

James Cook is the national director of

some treasuries, and sit back and relax. There could be

brokerage for Yale Realty and Capital

some bargains coming soon or your value could take

Advisors. He entered the manufactured

a much bigger hit depending on what the Fed does

housing and RV property asset class in

on hikes in the next few months. Banking is really

2005 as a licensed agent listing homes

in a tough spot and while we are still getting loans

for a local investor. In 2012, he founded

done, it is not easy, and debt is way more expensive.

the fully integrated finance and brokerage shop and has accumulated transaction exceeding $1 billion in value. He offers perspective at a national level, providing insight into the niche industry.

For industry-leading structural coverage for manufactured & modular homes, contact National Manufactured Modular Program Manager Ron D’Ambra from 2-10 Home Buyers Warranty.

Ron D’Ambra 803.917.1946 | rodambra@2-10.com 24 | NOVEMBER / DECEMBER 2023 EDITION

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Key KPIs For Community Operators

by Andrew Keel

Managing manufactured housing communities can be tough work. Creating accurate key performance

to feel confident about your manufactured housing community management.

indicators (KPIs) can streamline your management processes and give you peace of mind as your portfolio

Occupancy

grows. When growing my portfolio of nearly 3,000

Occupancy metrics are our most important, we

lots, at times it felt like I was building the boat as I was

instill this to our entire team daily in every meeting.

sailing it. If I had implemented these KPIs sooner, I

If my staff have multiple “to-do’s” that pop up and

could have saved myself some significant headaches.

they don’t know what to tackle first, we always want

This article will share with you what I think are the

them to prioritize the “occupancy’’ related tasks first.

most important metrics you should monitor in order

When evaluating occupancy, our metrics can be broken down into these five KPIs:

26 | NOVEMBER / DECEMBER 2023 EDITION

• Heads in beds - total number of occupied units vs. total number of lots in the park • N umber of days vacant – on home s for s a le a nd home s under renovation • Number of showings completed • Number of applications received • Number of homes sold vs. number of homes available We dive deep into each failing or “red” metric on our dashboard to discover the root issue with our operations. For example, a high number of showings and a low number of applications received could indicate condition issues with the home we are trying to sell.

Collections We know that no matter what occupancy looks like, we will likely collect 90-95 percent of our anticipated revenue each month with relative ease.

95 percent is a great start, but that still means that we are chasing 5-10 percent of our tenants each month. To address our tenants with overdue rent, we use a “full-court press” approach, this includes reaching out via most methods possible. Our top KPIs for evaluating collections include: • P ercentage of amount billed we’ve collected • Number of tenants that paid vs. the total number of tenants in the park • Total “cash-for-keys” offers made We compare each of these metrics with the numbers from previous years during this same time of the month in order to track trends and ensure we are moving in the right direction. We also track the total collection attempts, and the forms of these attempted communications to more effectively strategize future scenarios. » MHINSIDER.COM | 27

COMMUNITY

Water and Sewer Recapture I’ve learned the hard way not to mess around when it comes to your water/sewer expense recapture. We

Why? Here are a few KPIs we track for every project to help us stay on track with the returns we’ve projected before purchase:

monitor ‘slippage’ by daily tracking of Metron farnier master meters and Metron submeters under each

Pro forma projections vs. the operational

home. We aim for a 90 percent utility recapture

realities on each:

rate, however some months are worse than others,

• Revenue

usually based on the weather. In order to avoid pour-

• Expenses

ing money down the drain, we track utility slippage

• Net Operating Income (NOI)

constantly via these KPIs:

• CAPEX (capital improvements)

• Daily meter readings (Master meters

• Investor distribution amounts

and submeters)

Tracking our budget vs. actual differences is like-

• M onth ly f inancial rev iew of the utilit y

ly a large part in why our underwriting today for

income and expenses

new projects is usually more accurate than it was

• Number of water leaks per year

when we first started buying mobile home parks

We watch the usage numbers and compare them to

over 7 years ago. Experience compounds and what

the averages month over month to ensure large spikes

gets measured, gets done.

don’t throw us off budget. When a spike occurs, we

I hope these KPIs give you a starting point to devel-

are usually notified within minutes so the leak can

oping your own dashboard with your most important

be identified quickly to avoid large slippage costs.

metrics. Knowing is the first step towards fixing. Red metrics are present in every organization, the key is

Property Condition

being able to identify them and resolve them in a

Property conditions are extremely important for the

timely manner. Accountability is critical, we spend

tenant experience. Poorly maintained manufactured

80 percent of our time on the failing red metrics and

housing communities will not only drive good tenants

20 percent of our time on what’s green. KPIs allow

out, they will also make the property less valuable.

you to track your team and create accountability

Identifying, tracking, and resolving rule violations can

standards based on results rather than ‘to-do’ lists.

be a daunting task for a part time on site manager.

Peace of mind is invaluable and having the right KPIs

Monthly drive-through videos are a great approach so

in place can get you one step closer. MHV

off site personnel can escalate action items as they see

Andrew Keel is the CEO of Keel Team

fit. Our KPIs for maintaining property condition are:

Mobile Home Park Investments. He

• Number of new violations per lot

currently owns and self-manages just

• Number of violations fixed from the prior

under 40 mobile home parks across 16

month, per lot

states. His business model includes buying

• Annual number of violations per lot

value-add mobile home communities,

We have found that the constant offenders are

fixing the deferred maintenance and holding them long-

better off living somewhere else. Keeping track of

term with agency financing. Please visit KeelTeam.com

these above metrics tells our operations manager the

for more information.

story of who is a good fit for our community and who is not. We also randomly inspect each property every 2-3 months as this has been the best way to hold our onsite management accountable.

Budget and Actual How do your projected values compare to your operating realities? Are your numbers different?

28 | NOVEMBER / DECEMBER 2023 EDITION

REACH OVER 30,000 MANUFACTURED HOUSING PROFESSIONALS IN PRINT AND ONLINE

To Advertise, call:

1-877-406-0232

BUILDER / RETAILER

What Are We In For? 2024 Home Design Trends Someone said to me the other

To stay up-to-date with the latest

day that they were excited to have

interior design trends for 2024, I

the housing market “get back to

recommend consulting interior

normal.” I didn’t have the heart

design magazines, websites, and

to tell them that that those days

experts who regularly track and

are long gone. With the rapid

report on emerging trends in the

advances in technology, artificial

field. You can also follow interior

intelligence, and how we receive

design influencers and profession-

information daily, those days are

als on social media platforms like

a memory. Reviews.org found

Instagram and Pinterest to get a

that most people reach for their

sense of what’s currently popular

phones to check emails, TikTok

in the world of interior design.

and texts over 144 times a day for

Additionally, visiting design

over 4 hours and 25 minutes. It

shows and exhibitions can provide

sounds like a lot, but that is less

insights into upcoming trends in

than 2 minutes per phone check.

the industry.”

So, when I started thinking

As a design inf luencer and

about design trends and where the

professional who has visited

world is going, I thought a great

quite a few design, building, and

place to start would be to ask the

lifestyle focused conferences

artificial intelligence source Chat

this year, I have a lot to share. It

GPT what it saw in its crystal ball.

has also been a great learning

This was the response…

experience to have LifeStyled

“Interior design trends are con-

over 100 manufactured housing

stantly evolving, and new trends

model homes this year. Being in

emerge each year based on various

homes hearing (eavesdropping)

factors, including societal chang-

about what consumers think of

es, technological advancements,

our homes, and what their likes

and evolving design aesthetics.

and dislikes are has been a huge »

30 | NOVEMBER / DECEMBER 2023 EDITION

Lisa Stewart Photography, The Let It Be, Oakwood Homes of Amarillo

by Suzanne Felber

Lisa Stewart Photography, The Sterling XL Clayton Homes Austin Texas

Lisa Stewart Photography, The El Sueno Oakwood Homes of Austin

Lisa Stewart Photography

Photo Courtesy of: Beko

As a design influencer and professional who has visited quite a few design, building, and lifestyle focused conferences this year, I have a lot to share.

MHINSIDER.COM | 31

BUILDER / RETAILER

advantage. Here are the trends I see being important

design. This will continue to be one of the top trends

as we move into 2024.

throughout the next decade.

Artificial Intelligence vs Practical Knowledge

ing real needs and improving people’s lives. It

In meaningful design, the focus is on addressThe design world is buzzing about artificial intelli-

involves understanding the context, values, and

gence, and how it will impact the design community.

aspirations of the users or stakeholders and incor-

As we found when we used Chat GPT to find design

porating those insights into the design process.

trends in the future, artificial intelligence can share

By doing so, designers aim to create solutions that

what has been out there in the past, but can’t predict

resonate with people on a deeper level and evoke

the future. There will still be a need for professionals

positive emotions or experiences.

who have had hands-on experiences with consumers

Overall, meaningful design goes beyond sur-

and products to accu-

face-level aesthetics

rately predict where

and functionality to

we will be heading

create experiences

into 2024 and beyond.

that connect with peo-

W here ar tif icial

ple’s emotions, values,

intelligence can be

and aspirations, while

useful is in designing

addressing real needs

new products. It is all

and making a positive

about giving the right

impact in the world.

prompts and informa-

Curated Collections

tion to the service to be able to get some-

Maximalism is

thing useful in return,

replacing that stark,

and sometimes that

minimalist look that

doesn’t even work.

we have been seeing

MidJourney and other

the past few years. A

AI applications are a great way to try out

word of caution — this Lisa Stewart Photography, The Sterling XL, Clayton Homes of Austin Texas

is not an easy look to

new ideas or make mood boards without having the

execute. More isn’t always better. What we see are

expense of designing a physical product.

carefully chosen objects that all relate and make a collection that is easy on the eyes. A mass of items

Meaningful Design The days of disposable incomes are long gone.

Even if people are in the enviable position of having

that are pulled out of your warehouse just because they are paid for aren’t necessarily a collection, and is likely to turn off buyers.

won the lottery, or otherwise having more cash than they need, consumers are thinking twice about how

Modern vs. Contemporary

they spend. Are they likely to use that extra cash

Cold, contemporary spaces with white walls, ab-

to buy a second home they can share with family

stract designs, and everything new are being replaced

and friends or to take that European vacation they

with modern spaces that can still have clean lines, but

have always dreamed about?

mix in warmer colors. Green, like living plants and

Meaningful design refers to the creation of prod-

similar warmth in the artwork, rugs, and accessories is

ucts, services, or experiences that have a deep and

bringing the natural world inside. The black and white

significant impact on individuals and society. It goes

farmhouse that we have seen for years is being re-

beyond aesthetics and functionality to consider

placed with a “Modern Farmhouse” that has warmer »

the emotional, cultural, and ethical dimensions of 32 | NOVEMBER / DECEMBER 2023 EDITION

Nationwide Third Party Property Management, With an Owner's Perspective

OPERATIONS �� � � � � �� � �� � �� , , Curb Appeal and Occupancy

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Schedule a call today for a free community evaluation 248-885-9832 sblank@blankfamilycommunities.com Blankfamilycommunities.com

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424-228-6200

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818-474-1031

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UMH PROPERTIES, INC.

A PIONEER IN MANUFACTURED HOUSING As a publicly traded REIT (NYSE:UMH), we have been providing quality affordable housing since 1968.

Our portfolio provides high profit margins, recession resistant qualities, reliable income streams and the potential for long-term value appreciation.

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BUILDER / RETAILER

wood tones on floors and cabinets, adding texture,

renting the lot. Which sounds like a better value and

as well as furniture that you aren’t afraid to use.

quality of life to you?

Kitchen Colors

Precision Cooking

Color is back! In 2024, you will see a lot more colorful

Consumers no longer settle for appliances that

cabinets, countertops, and even appliances coming to

just turn on or off. They are looking for energy ef-

a kitchen near you. An affordable way to use this trend

ficient ways to cook that will extend the shelf life

in your homes is to add the color with countertop

of their food. Consumers demand appliances that

appliances, pots, and linens. These are easily replaced,

affordable and functional. Appliance manufacturers

but make your home on-trend.

are phasing out coil burners, and replacing them with glass top ranges that have come down in

Living Large in Small Spaces

price, and are more efficient. As we deal with global

Consumers are learning how to live in a smaller

warming, having refrigeration that will keep the

space without sacrificing their lifestyle of choice. The

right temperature and humidity in them is critical.

scale of furniture and accessories is critical to make

Beko Appliances just introduced HarvestFresh, which

a smaller space function well and not look crowded.

uses three-color technology to stimulate the daily

The use of area rugs add color and anchor a space.

sun cycle, preserving vitamins in fruits and vege-

Open armed chairs, and sofas that show some leg

tables, for a greater nutritional benefit and to keep

are great ways to make a room more inviting. “Drink

produce fresh for up to 30 days.

Tables” are replacing full size end tables. Think about traffic flow when you are designing a room.

Go Organic We are reaching a tipping point where organic foods

Separation of Space

and products are the first choice of most consumers,

With all of us working more at home, we have

and they aren’t shy about asking. People want to know

started to value our privacy more than ever. We create

what is in their food, and where it came from. Building

“Zoom Rooms” where the entire household doesn’t

products that are used in and outside our homes need

have to hear an online conversation, and where we

to be eco-friendly, and we need to let consumers know

can avoid the dog wanting to go out. We are seeing

that up front. Low VOC (Volatile Organic Compounds)

more study halls, too, that actually use a hallway to

products are becoming a standard, and off-gassing is

create a place for kids to do their homework or for a

something that consumers have become increasing

parent to create new Pinterest ideas.

aware of and worried about.

The manufactured housing industry has a huge

Community Living

opportunity in front of it in 2024 and beyond.

This is a huge growth area that our industry has

Consumers are looking for better solutions,

owned for years, but site-built buyers and consumers

and we are poised to be their first choice for

are just now discovering the value of community

well-designed, affordable housing. MHV

living. There is an explosion in site-built “Build to

Lifestylist Suzanne Felber has been active

Rent” communities where the homes most often

in the housing industry for more than 30

are styled like townhomes with a narrow floorplan

years. Felber realized that factory-built

and at least three stories. There is little or no yard. A

housing was the housing of the future, and

new community on a busy, noisy interstate highway

has been actively working to promote the

in Dallas has four to six attached homes in each

lifestyle ever since. She started American Housing Advocates

building and start at more than $3,000 a month. Our

as a way to share the great news about manufactured

industry offers well designed homes on a lot with no

housing. To learn more about her work, visit www.lifestylist.

shared walls, no wasted spaces for stairs inside the

com and www.americanhousingadvocates.com, or read her

homes, and a chance to own your own home while

@lifestylist social media posts.

MHINSIDER.COM | 37

BUILDER / RETAILER

DICK GRYMONPREZ

A Career Spent Overseeing the Development of Park Model RVs

by Kellie Speed

After more than four decades in the industry,

each year in the U.S., so it’s not a big business. It is

Dick Grymonprez has decided to retire as director of

competitive and there are things to learn, but it’s a

park model sales for Skyline Champion.

good business to be in.”

“I’m turning 65 and am ready to step down and turn it over to someone else,” Grymonprez said about his decision to retire this summer.

‘I never wanted to get into the business’ Grymonprez never actually wanted to get into the factory-built housing industry.

Playing an Active Role

“I grew up in Michigan and my father was in the

He is well known as someone who has helped

business,” he said. “He was the general manager of

expand the company’s park model offerings

the Redman plant. I never wanted to get into the

while also play ing a prominent role as an

business, so I went to college and got a job selling

advocate for the industry.

insurance. It didn’t go so well, so I decided to get

“I have always been active in associations through-

into this industry and joined Redman, which is now

out my career,” he said. “I think it’s important when

part of Skyline Champion. They asked me where

you are in the industry to find out the inner workings

I wanted to go and being from Michigan, I said

of it and how to help it succeed. It’s an interesting

Arizona, Texas, or Florida.”

business. As park model manufacturers, we can sell

Grymonprez got his start in Texas, later working

to resorts and communities, and RV and park model

as a sales manager in Arizona before moving back

dealers. There are only about 5,000 park models sold

to Texas where he currently lives.

38 | NOVEMBER / DECEMBER 2023 EDITION

“I have been in the industry since 1981 when I first

“Tiny homes talk about downsizing. They promote

worked with Redman Homes until 2004,” he said.”

250 square feet of home as actual homes. Ours are

At that time, he, along with a group of inves-

bigger. When HUD came down on our industry, tiny

tors, decided to purchase a closed manufactured

homes weren’t available. America has a housing

housing plant in Athens. A noncompete clause

shortage and people will live in anything they want

prevented them for two years from building

to,” he said. “But the ones we build are a little more

homes so they changed their business model to

upscale. We build more like a manufactured home

manufacturing park model RVs.

than a park model. They have high pitches and lofts.

He worked at Athens Park Homes as vice president of sales and marketing for nearly eight years until

They really set the upper echelon for park models, and I think that’s what the industry wants.”

Champion bought the plant in 2012.

“When Champion bought us in 2012, we became the largest producer of park models in the country and have stayed that way ever since,”Grymonprez said. “I joke that I have worked for Champion twice and they never hired me.

A Growing Industry Half of Skyline Champion’s supply of park models goes to campgrounds.

“We continue to see growth with the campground industry booming,” he said. “The growth of our com-

“I have been in the business for 42 years and it has

pany has been as a major supplier for campgrounds.

been a blast,” he added. “The company has been 100

As we grow resorts, park models work perfectly as

percent supportive, and I have enjoyed all of it.”

rentals because they are built to last, they are energy

Over the years, Grymonprez served as pres-

efficient, low maintenance and affordable. The cost

ident of the Arizona Manufactured Housing

of park models has doubled in the last few years,

Association and played a major role for a decade

but they are still affordable. What’s different now

serving on the RV Industry Association (RVIA) before

is that some of the resorts are unbelievable. Sun

ending his tenure last year.

Resorts, for example, has water parks, yoga studios, video arcades, tennis and pickleball courts. It’s like

Unexpected HUD Challenges

going to a fun weekend resort.”

During his time, Grymonprez said, the U.S. Depart-

With the cost of park models more than dou-

ment of Housing and Urban Development began to ask

bling since COVID, Grymonprez believes the

questions of park model RV manufacturers for selling

industry is only going to keep getting stronger

the models that looked more like homes, increasing

despite higher interest rates.

their size to over 399 square feet, for instance.

“Our park model business is consistent every year,

“We don’t sell our models as homes,” he said. “We

which has been very good for the company,” he said.

build RVs. At Athens Park, we don’t talk about it being

“Florida is the only state that allows HUD-code man-

a home. It’s a weekend getaway cottage. We do that so

ufactured homes under 500 square-feet in an RV

we don’t mess with HUD. Park model manufacturers

park,” he said. “Between the ANSI park model RVs

don’t encourage enclosed porches. We don’t insulate

and the Florida HUD park models at 499 square feet,

above or below the porch. I would say one of my

we have averaged between 1,500 and 1,800 per year

biggest accomplishments was being part of a team

and this year we should have our best year ever. I love

that was able to convince HUD to allow us to keep

the industry. I get to talk with competitors, lenders,

our porches. The challenge is to keep it as an RV but

suppliers. It’s one big happy family.” MHV

make it attractive.”

Kellie Speed has more than 20 years’

Gr y monprez adm it s he cr inges when he

experience writing for a variety of publica-

hears talk about tiny homes. Park models, he

tions, including Realtor.com, Haute Living,

emphasized, are for weekend getaways, vacation

U.S. Veterans magazine, DiverseAbility,

rentals, or seasonal dwellings.

and Forbes Global Properties. She can be reached at kkspeed@aol.com.

MHINSIDER.COM | 39

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BUILDER / RETAILER

CAVCO L AUNCHES A NATIONAL COMMUNITY SALES TEAM Cavco Industries, one of the nation’s largest off-

Sun Communities is one of the largest operators of

site builders, has doubled down on its commitment

manufactured home communities in the country,

to serving developers, community managers, and

and as a Cavco customer, the development of the new

community operators through the formation of the

department came as welcomed news.

Cavco Communities Group.

“Cavco Communities is our national effort to

“Cavco implementing the community support team has introduced enhanced communication

refocus and renew our level of commitment to com-

between the Cavco

munity partners,” Cavco’s Ross Mueller said. “From

plants and Sun Com-

each individual community manager we sever, to

munities nationwide

the largest of the national account, we will be the

strengthening our

preferred home provider.”

relationship,” Sun

The new Cavco Communities branding was

Communities Vice

launched at the SECO conference Sept. 11 in Atlanta.

President of Asset

Largely through acquisition, Cavco has grown to

M a n a gement Jo e

31 production facilities spread from coast to coast.

Deaunee said. “There

Cavco’s 2022 acquisition of Solitaire Homes included

is now an immediate

two facilities located in Ojinaga, Mexico.

response on sales and

“Cavco Communities brings continuity across our family of brands,” Mueller said.

“Cavco Communities is a commitment to people at the community level and the regional managers in that area,”

–Cavco’s Ross Mueller

service concerns.”

As the nation’s third largest manufactured home

It is the continued consolidation among com-

builder, Cavco has an under-represented share of the

munity ownership groups that requires a new

communities business. Mueller said the company’s

national focus for Cavco.

assembling the national team through the end of

“Our family of brands has local and regional im-

2023 and likely into 2024. MHV

portance to our customers. Once a customer gets to a certain size, buying across all of our brands can become a little cumbersome.” Mueller said. “Our national customers requested a centralized resource with access to all of our brands.”

While creating additional support for our com mu n it y pa r tner s , Cavco i s not lo si ng sight of what’s important.

“Allowing the plants to maintain their individual identities, while leveraging a unified approach to our communities sales structure, is a key component of Cavco Communities,” Mueller said. “Our lean, top-down approach, alongside plant-centric mentality, allows us to be both proactive and reactive when necessary.”

MHINSIDER.COM | 41

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MARKETING

It’s All About the Numbers: The Essential Metrics Every Marketer Should Know

by Darren Krolewski

44 | NOVEMBER / DECEMBER 2023 EDITION

If you’ve watched any Food Network at all, you’re likely familiar with celebrity chef Robert Irvine and his show “Restaurant: Impossible”.

Each episode profiles a struggling restaurant where Irvine and his crew swoops in to rehab the floundering enterprise with an updated menu, fresh decor and a crash course in operations. It’s a great show.

Unsurprisingly, many of the turnarounds are about the owners not having a good sense of their numbers. As is true in many industries, if you’re losing money on every customer, you shouldn’t plan on being in business very long.

The reality is, if you don’t understand the key metrics for your business, and know them well, you can’t possibly make good business decisions.

This is especially true of marketing, where an endless array of advertising and promotional choices vie for our limited marketing dollars.

For the purposes of this article, we’ll focus not on how to analyze campaign performance but on what happens after an advertising campaign generates a lead. That’s where the serious numbers begin.

As the final months of the year traditionally herald the beginning of a new budgeting cycle for most marketers in our industry, there’s no better time to brush up on some essential metrics and focus on the most important marketing channels in the year ahead.

Cost Per Lead (CPL) Quite simply, Cost Per Lead, or CPL, is the cost of generating a prospect.

To calculate your CPL, divide your marketing spend by the number of leads acquired during the same period. You can calculate CPL at the campaign level, which is valuable for benchmarking campaign performance, or across all of your marketing channels as an overall benchmark. Of the two, analyzing CPL at the campaign level makes the most sense as it enables comparisons between marketing campaigns or channels. This enables you to identify the most cost-effective campaigns and make more effective budgeting decisions. »

MHINSIDER.COM | 45

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MARKETING

Lead Conversion Rate (LCR)

given point of time, such as over

is a component of calculating the

Your Lead Conversion Rate, or

the course of a year or the term

lifetime value of each customer,

LCR, measures how successful you

of a lease. If you’re a retailer, you

either individually or in aggregate

are in turning a prospect into a

typically have a large, one-time

among all customers. Second, it

customer, whatever a customer

sale to a customer, so you need

provides important insights into

represents to your particular part

to calculate your average home

customer turnover, or churn,

of the industry. In the case of a

selling price. If you’re a supplier,

which is the portion of customers

retailer, it would be a sold home.

you would calculate your average

that cease to be customers over

For a community, it would be a

customer value by adding up the

a specific time period. To deter-

new resident. It is calculated by

average value of each transaction,

mine your ACL, first calculate

dividing the total number of con-

multiplied by the frequency of

the number of days between

version activities divided by the

orders over that time interval. For

the first activity that created a

total number of leads, multiplied

a community, you would calculate

customer and the last activity of

by 100. At the individual campaign

the value of the monthly lease

that customer to determine an

level, it allows you to determine

multiplied by the lease term.

individual customer lifespan for

the ultimate effectiveness of specific ad campaigns or channels. At the organizational level, it reflects the effectiveness of your entire customer acquisition process.

each customer. Then total all the

Average Customer Lifespan (ACL) Average Customer Lifespan

customer lifespans and divide by your total number of customers to arrive at the ACL. »

measures how long a customer stays a customer. This metric is

Customer Acquisition Cost (CAC) Customer Acquisition Cost, or CAC, measures all the expenses associated with bringing in a customer. This includes everything from advertising media costs, to labor, production, sales commissions, and overhead. It is important to understand CAC to enable you to focus on the methods of customer acquisition that are most cost effective. Using this approach, it might make sense to pay a higher cost per lead from one lead source if the total acquisition cost is lower, compared to a lower

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Average Customer Value (ACV) This is an easy one. It’s how much a customer spends on average per transaction during a

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MARKETING

Lifetime Value (LTV)

get the most accurate number

MHVillage, the number one website

Not to be confused with Cus-

however, you will also want to

for manufactured homes, retailers

tomer Lifetime Value (CLV), which

multiply the final number by your

and communities. Prior to joining

measures the lifetime value of an

gross margin. To illustrate, if you

MHVillage in 2014, Darren held

individual customer, Lifetime Val-

determine that the lifetime value

senior marketing positions in the

ue, or LTV, measures the average

of a customer is $15,000 with a 30

telecommunications, advertising,

lifetime value of all customers

percent gross margin, then your

and financial services industries —

in aggregate. Arguably, it is the

LTV is $5,000.

and was a partner in a marketing

most critical metric of all because

There are many enviable goals

it shows how much you can afford

in marketing, visibility and aware-

to spend on customer acquisition

ness among them. In the end it

and retention. LTV helps you

comes down to one thing: what

make informed decisions about

makes the cash register ring. By

marketing initiatives as well as

understanding these key metrics,

evaluate investments that improve

you too can make better market-

customer value. That said, there

ing decisions to make that register

are several ways to calculate LTV.

ring louder and more often. Oh,

In its most straightforward form,

sweet music. MHV

the calculation is to take your

Darren Krolewski

Average Customer Value (ACV)

is co-president and

and multiply it by your Average

chief business de-

Customer Lifespan (ACL). To

velopment officer of

consulting firm serving the housing industry.

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Visit www.ManufacturedHousing.org/Education for more information 48 | NOVEMBER / DECEMBER 2023 EDITION

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BROKERAGE

Northeast Year in Review and 2024 Outlook

by Anthony Pino

The national manufactured housing sector has been on an upswing for the past several years, and properties in the Northeast

Elevated Occupancy Levels Highlight Strength of Demand, Stability of Operations

second quarter at 94.3 percent, and the rate has held steady between 94 percent and 95 percent for the past five years.

have posted similarly strong

The first measurement of

Top states for occupancy in

performance. While the bulk of

property performance that most

the Northeast region include

the supply growth for the industry

operators and investors look at is

Maryland and Virginia, where

occurs in rapidly growing popula-

the occupancy rate, and current

occupancy levels are 98.7 percent

tion centers in the South and the

totals showcase a very strong

and 97.7 percent, respectively.

Southwest, the sector continues

market. The national occupancy

Pennsylvania has the largest

to expand in the Northeast, and

rate ended the first half of 2023

inventory of units in the North-

the region is posting healthy

at 94.4 percent, ten basis points

east, and the current occupancy

operations performance.

higher than one year earlier. The

rate in the state is 93.7 percent.

There are some signs of slowing

rate has been trending higher

Our team worked on the sale of

at the national level that emerged

for the past several years, first

three communities in Pennsyl-

during the first half of this year,

breaking through the 90 percent

vania during 2023 that were all

which should set the stage for

threshold in 2017. Occupancy at

95 percent occupied or higher.

relative outperformance in the

the national level has increased in

These communities ranged in size

Northeast region, which has been

ten of the past eleven years, rising

from 75-202 pads and were owned

less reliant on rapid growth than

from about 85 percent from 2010-

by long term operators. During

in other parts of the country.

2012 to nearly 95 percent today.

the tenure of their ownership

In the Northeast region, long-

occupancy did not dip below 90

term occupancy trends have been

percent, and always had a wait list

far more stable. The rate ended the

of prospective tenants. In all three

50 | NOVEMBER / DECEMBER 2023 EDITION

cases the buyers were looking to

housing units were shipped within

There are many different fac-

expand and add additional density

the United States, up more than 80

tors to consider when looking to

to the communities as the afford-

percent from one decade earlier.

invest in a manufactured housing

able housing need in Pennsylvania

To this point in 2023, shipment

community. There are great

is dire. This trend is set to continue

volumes have come down from

opportunities across the Untied

as occupancy in Pennsylvania has

their cyclical peak. During the

States that will appeal to investors

increased by 30 basis points in

first half of this year, 44,000

for different reasons. The Mid-At-

the past 12 months, setting the

manufactured housing units were

lantic through the Northeast

stage for additional increases in

shipped, 29 percent lower than

remains an excellent opportunity

the year to come.

the total during the same period

to explore investments in the man-

in the previous year.

ufactured housing space. MHV

Shipments of New Units Down, Following Rapid Increases In Recent Years

The Northeast region typically

Anthony Pino is

accounts for some of the lowest

a m a n u fa c t u re d

inventory growth in the country.

housing specialist

The cost of all forms of housing

During the first half, shipments

for Northmarq. He

has pushed higher over the past

to the Northeast region reached

covers the Midwest

several years, increasing demand

approximately 4,000 units, down

and eastern states,

for less costly alternatives, in-

from 4,900 units one year earli-

with a predominant focus on the

cluding manufactured housing

er. Pennsylvania and New York

mid-Atlantic region. Pino has forged

communities. One result of

combined to total more than 1,700

strong, long-term relationships with

these trends has been a surge in

units, followed by Virginia (525

investors and partners across these

the shipment volume of manu-

units), West Virginia and Maine

areas and has worked with private

factured housing units. In 2022,

(375 units each).

client groups, equity partners,

more than 112,000 manufactured

institutional owners, and REITs. MHINSIDER.COM | 51

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Place a hold? Change an address?

Use the subscriber number on your mailing label to manage your subscription or create your online account.

Go to http://subscriber.mhinsider.com on your computer, tablet or phone.

Thank You for Reading! park owners have a powerful opportunity ff

Leave a lasting legacy of community investment by selling to your residents.

We can help. www.rocusa.org • 603.513.2791 52 | NOVEMBER / DECEMBER 2023 EDITION

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SERVICE / SUPPLIER

MANUFACTURING A BETTER COMMUNITY; Sustainable Utilities Managed

by Rachael Reid

Every community has its charm — the one thing that sets it apart from the rest.

The manufactured housing

to make better decisions for your

consumers – and that Gen Z’ers

industry plays the vital role of

communities. Conservice has

(people born after 1997) are the

providing attainable housing

been doing just that for over 20

generation that places the highest

options to thousands of people

years and has learned a thing or

value on sustainability. As more

across the United States. With

two about building better com-

of these younger people enter

economical pressures at an all

munities as a result.

the real estate and rental market,

time high, the need for growth

Making a sustainable communi-

sustainable features and ameni-

and evolution in sustainable busi-

ty is good for everyone. But in case

ties are becoming vital selling

ness practices becomes even more

you need another reason, we’re

points. But it’s not just younger

essential amongst those providing

giving you 5 ESG considerations

potential residents; the data indi-

and needing attainable housing.

that significantly impact the man-

cates that 61 percent of all renters

By design, communities must

ufactured housing industry in

are willing to pay a premium

be built with key considerations

building stronger, more resilient

for sustainability.

taken into account. And any good

futures for your communities.

community’s success hinges on two major environmental, social,

Manufactured housing companies that prioritize environmental

1. Energy Efficiencies

sustainability also reduce oper-

and governance (ESG) factors: risk

Lower Costs and Risks

ational risks by lowering energy

mitigation and resilience.

Manu factu red homes are

costs and ensuring compliance

Conservice — a utilities man-

inherently more sustainable

with increasingly stringent envi-

agement firm that supports the

due to carefully engineered

ronmental regulations.

manufactured housing indus-

designs with less waste in mind.

We call that a win-win.

try — has built a community of

We know that by adopting ener-

Thanks to emerging ENERGY

owners and operators (as well as

gy-efficient building practices and

STAR Benchmarking, Building

their residents/tenants) along with

materials, our homes can reduce

Performance Standards, and

partnerships with local utility

energy consumption, lower over-

other local/state regulations,

providers and government entities

all utility costs, and minimize c

monitoring and tracking those

to manage utilities for their prop-

arbon footprints.

requirements for all of your

erties. From Bill-to-Boardroom™,

Research also shows that

properties is slowly becoming a

it’s important to use the utility

environmental responsibility

requirement, so we handle all of

data you already track each month

is important to 81 percent of

that on behalf of our customers. » MHINSIDER.COM | 55

SERVICE / SUPPLIER

2. I nvesting in People

4. C ommunity Planning and

correct payment for utilities is

and Community

Disaster Preparedness

sent to local utility providers.

Increases Resiliency

IS Resiliency Planning

That data then carries through

Building a community is no

Better communities care about

seamlessly to all of our other ser-

small task. Building a better

the sustainability and longevity of

vice offerings, including feeding

community involves people.

their investments. Companies that

into our ESG platform for clients

Better communities ensure well

wish to build better communities

to monitor their ESG goals and

maintained and safe communi-

prioritize resilient community

make better decisions on behalf

ties, fair and transparent pricing,

planning and disaster prepared-

of those communities.

and consistent opportunities for

ness by designing communities

We partner with local util-

residents to participate in making

that are less vulnerable to natural

ity providers, regulators, and

the community a better place.

disasters, such as hurricanes or

communities to best serve local

By investing in the people of

flooding, and implementing emer-

needs. We even partner with

a community with amenities

gency response plans to protect

our competitors! Integrating

such as playgrounds, green

residents in times of crisis.

with other software platforms

spaces, community gardens, and

Investing in resilient infrastruc-

community centers, a shared

ture, such as elevated foundations,

sense of belonging is created

stormwater management systems,

The strategic move for man-

that improves the overall qual-

and backup power sources can

ufactured housing is also the

ity of life for a stronger, more

help manufactured home commu-

move that just makes sense for

resilient resident base.

nities withstand adverse events

long-term success. By focusing

and ensure the safety and well-be-

on energy efficiency; investing in

3. Governance and

helps make the communities we support better places.

ing of residents. Proactive disaster

amenities; enhancing governance

financial Reporting

preparedness not only mitigates

and financial reporting transpar-

Drive Transparency and

risks but also demonstrates a

ency; building up resilience; and

Risk Management

commitment to the welfare

building partnerships in unlikely

Managing governance practices,

of the community.

places, companies in manufac-

including relationships in what may seem like unlikely places,

tured housing can truly build 5. Find Partners in Seemingly Unlikely Places

drives transparency and risk mit-

resilient, prosperous, and better communities for the future. MHV

igation. Regulatory requirements

Better communities are built

Rachael Reid is

and ethical sourcing of materials

by involving everyone. It’s been

the senior marketing

better positions the manufac-

said that when you take care of

manager leading

tured housing market to address

your people, they take care of

the ESG P roduct

disruptions in supply chains

your investment. What better

Marketing team at

and helps communities adapt

way to take care of your com-

Conservice. Her pas-

to changing markets.

munities than by connecting

sion lies in storytelling, and she uses

With the right governance

them? By building a bridge

her platform to craft compelling

structures in place, companies

between your communities and

narratives for owners and operators

are better prepared for, well,

different perspectives, enhanced

in the real estate industry. Reid’s

any crises that comes their way.

relationships with regulators,

knack for weaving impactful tales

Whether economical or natural,

and diversity in staffing you get

makes her a driving force in pro-

companies can weather the storm

innovation and adaptability.

moting good utility management

by sharing their goals and involv-

For decades, Conservice has

ing their communities in the goal

partnered with their customers

of making and keeping processes.

to receive, audit, and ensure that

56 | NOVEMBER / DECEMBER 2023 EDITION

and risk reduction for a more sustainable future.

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MHINSIDER.COM | 57

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58 | NOVEMBER / DECEMBER 2023 EDITION

THE TIME IS

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ALLEN LEGACY

MANUFACTURED HOUSING CONSULTANTS PAST AND PRESENT

Independent, freelance management consultants come and go. Consulting is often one’s next, albeit brief, career stop after losing a management or executive job, before finding a new one. But consulting can also be something one prepares for by dint of specialized education, on-the-job experience, having a willingness to take financial risk, along with the ability and wherewithal to create helpful and billable proprietary material.

There have been many independent, freelance management consultants throughout the manufactured

by George Allen,

housing industry (e.g., manufacturing, marketing, sales,

CPM Emeritus, MHM-Master

and service) and among land-lease communities (manufactured home communities, “mobile home parks”) during the past 75 years. The following paragraphs profile nearly two dozen individuals who have been active during the 1980s and some through present day.

But first; what does it take to be a successful — in terms of income and reputation — independent freelance consultant? While that is certainly a matter of opinion, there are some in-common principles. First, don’t leave a job to become a consultant without having work lined-up ahead of time, and or have identified an underserved niche, usually via personal relationships. Have the ability to fill that tangible need. Second, risk-taking is a given, as is the need to “hustle” at all times until supported by established clients. And, never forget… consultants are rarely really or fully appreciated, especially in their home locale, until after they fail, retire, or die, whichever comes first!

60 | NOVEMBER / DECEMBER 2023 EDITION

Adams, Joe (N.C.) — Headquartered in Asheville, he launched The Housing Marketplace, to assist

improving curb appeal and maximizing occupancy.

Also recently featured in MHInsider magazine.

HUD-Code housing manufacturers and land lease

Carr, Bill (Iowa) and his late wife Judy, along

community portfolio folk with his proprietary

with son Chad, — Via Judy Carr & Associates, ad-

Net Referral Score survey program, relative to

vised RV and manufactured housing retail sales

consumer response to product and service. This

enterprises how to maximize operating income

has been a mainstay tool among several of the

and control expenses. Their proprietary services,

largest property portfolio firms.

in recent years, went by the new name Rainmaker

Allen, George CPM® — A professional property

Software. And Bill is credited with creating the

management consultant for 40 years. Used his experi-

apropos industry trade term ‘independent (street)

ence as a community owner to unite peers to launch

MHRetailer’, replacing ‘dealer’.

MHI’s National Communities Council, authored 20

Corbin, Ken (Ga.) — Well known and respected

texts (e.g. Community Management in the Manufac-

as a manufactured housing training specialist. His

tured Housing Industry), and published the ALLEN

consulting adage? ‘Sell more homes, Fill more rental

REPORT for 30 years. Texts are available for purchase

homesites, and Generate more revenue!’ Today, a fre-

from www.educatemhc.com.

quent presenter at state and national manufactured

Alley, David (Fla.) — Now deceased, for decades

housing trade gatherings - like the popular SECO

David well-served the site planning and engineering

Conference. Ken is also a frequent contributor to

needs of land lease community developers through-

various trade publications.

out the U.S. In 1994 he co-authored the J. Wiley &

Ernst, Richard “Dick”, (Texas) of FinmarkUSA, is

Sons published, now classic text, Development,

a chattel capital (‘home only’) and real estate mort-

Marketing & Operation of Manufactured Home Com-

gage financing expert relative to state and national

munities. This was the first book published on this

trade associations, as well as consultant of choice

critical topic in two decades.

for government-sponsored enterprises (‘GSE’). Also

Blank, Steven & David, (Mich.) of Blank Family Communities — In recent years, this team moved

contributing author to the Manufactured Housing $ Primer, published in 2010.

from multi-community ownership to fee manage-

Fannon, Brian, CPM® (Mich.) — Longtime pro-

ment and consulting, as specialists in rent collection,

fessional property management specialist and; of late, developer and community infill consultant at » MHINSIDER.COM | 61

ALLEN LEGACY

the Oaks of Rockford in MI.

Hicks, Edward (Fla.) — Land

Standard Operating Procedures

A l s o fo r m e r p r e s i d e nt o f

lease community feasibility study

(‘SOP’) for land lease communities.

SUN Communities.

specialist, loan originator, and real

Nicely, Chris (Texas) — President

Felb er, Su z a n ne ( Tex a s)

estate broker. Also Co-author of

of ManufacturedHomes.com,

— Lifestylist consultant to HUD-

Development, Marketing & Op-

applying his senior leadership

Code housing manufacturers,

eration of Manufactured Home

experiences as former VP of

independent (street) MHRetailers,

Communities. Semi-retired.

marketing for Clayton Homes,

‘company stores’, and many land

Penned the ‘Ask Eddie’ column

and CEO of Next Step Network, is

lease community owners/opera-

in the Journal, and created the

a featured speaker on economic

tors. Co-founder and host, with the

unique Interlok Homes design

trends, marketplace changes, and

late Bruce Savage, of the website:

for factory-built housing. Heads

strategic planning. Also assists

American Housing Advocates, a

Consultants Resource Group.

municipalities in discovering how

Jackson, Chrissy, ACM (Fla.)

factory-built housing can be an

— Former on-site and regional

affordable housing solution in urban environments.

virtual advocacy group promoting factory-built housing.

Gilchrist, Martin (Pa.) — Land

property manager of land lease

lease community design engineer

communities. Best known for

Knoll, Roderick (Colo.) — Due

since 1962. Now semi-retired.

teaching Accredited Community

diligence specialist and property

Founded Urban Research & De-

Manager (‘ACM’) classes for the

acquisition consultant. Succeeded

velopment to prepare master plan

Manufactured Housing Institute

Craig White, ACM, as head of

and zoning ordinances for towns,

(‘MHI’), FMHA and other state

Manufactured Housing Resources

land lease communities and other

trade associations. Also co-au-

Group. And with Don Westphal,

property types.

thor of the first comprehensive

taught many land development seminars for MHI. Lavin, Marty, esquire (Vt.)

SpecialINSURANCE PROGRAMS with Industry Leading Value

— Chattel capital (‘home only’)

Manufactured Home Retailers & Community Owners

legal advisor. Also wrote critically,

financing consultant, as well as in manufactured housing trade publications, about manufactured housing’s recurring lending blunders. Accepting plaintiff Expert Witness assignments involving land lease communities.

Porter, George (Del.) — Near legendary land lease community installation visionary, consultant and author. Advisor to HUD and

MOBILE INSURANCE 800-458-4320 Call or email today for a free consultation 62 | NOVEMBER / DECEMBER 2023 EDITION

Kurt Kelley President

numerous companies and state

Protect your Investments

larized the Frost Free Foundation

• Retailers • Communities • Developers • Transporters • Installers

800-458-4320 ser vice@mobileagency.com

associations nationwide. Popu(‘FFF’) system. Now semi-retired.

Roane, Spencer (Ga.) — While first and foremost a land lease community portfolio owner/ operator, Spencer researched, implemented, and widely shared

his firm’s concept of lease option-

menting automated marketing

tired, Don continues to serve the

ing new HUD-Code manufactured

and sales processes designed to

consulting needs of various firms

housing being sited on rental

deliver elevated customer expe-

and state MH associations. MHV

homesites within communities.

rience and more sales in the land

George Allen is a nonfiction au-

Also the co-creator, with David

lease community environment.

thor, internet blogger, and magazine

Roden, of the popular annual

Underwood, John Ace (U.K.)

columnist with expertise in man-

SECO Conference in Atlanta, GA.

— The executive director of

ufactured housing and land-lease

Robinson, Rick, esquire. (Ky.)

LearnMH, Underwood applies his

communities. He also is a retired

— Former general counsel/senior

successful 35-year career in man-

lieutenant colonel of U.S. Marines,

VP of state & local affairs at MHI.

ufactured and modular housing.

with a combat tour in the Republic

Today, Rick is the executive VP

Works primarily as a sales develop-

of Vietnam and service during Des-

of industry relations for Manu-

ment consultant for independent

ert Storm. Read his autobiography,

facturedHomes.com. Here he

(street) MHRetailers, land lease

“FromSmittyAlpha6 to MHMaven”

uses contemporary technology

communities, and HUD-Code

available via www.educatemhc.

to elevate industry brands via

housing manufacturers through-

com, and also his “Chapbook of

state association websites. As an

out the U.S. and Canada.

Prayer” and “Chapbook of Business

aside, Rick is the author of several

Westphal, Donald (Mich.) — The

Management & Wisdom” as well as

popular novels, e.g. Opposition

guru of land lease community

other interesting titles. Allen can be

Research. (amazon.com)

landscape design and consulting!

reached at gfa7156@aol.com, (317)

Stroud, Scott (Ky.) — As direc-

Also taught many of MHI’s land

881-3815 & GFA c/o Box # 47024,

tor of development for MhCRM,

development seminars during the

Indianapolis, IN. 46247.

Stroud uses his passion for imple-

mid to late 1990s.While semi-re-

MHINSIDER.COM | 63

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