M HI NAT ION A L C ON GR ES S & EXP O • M AY 6 – 8, 2019 M AY / J U N E 2 0 1 9
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T H E M A G A Z I N E F O R M A N U FAC T U R E D H O U S I N G P R O F E S S I O N A L S
Modular Infill in Urban Areas IN THIS ISSUE:
• Innovative Financing Options for Affordable Housing • Legacy Housing: From West Texas to Wall Street • Relationships Matter When Selling Pre-Owned Homes A Publication of
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Chattel Financing Programs Marketing & Sales Idea Exchange New Product Innovations Federal Advocacy Updates Fannie Mae & Freddie Mac New MH Land Home Program
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CONTENTS
™
VOLUME 2 • ISSUE 3 MAY / JUNE 2019 ON THE WEB MHInsider.com
–––––––– Publisher
Darren Krolewski darren@mhvillage.com
56
Associate Publisher
MICHIGAN SETS STANDARD FOR MODULAR INFILL IN URBAN AREAS
16
26
Harris Homes' Success in Pre-Owned Sales is Built on Relationships
Fannie Mae Exploring Innovative Financing for Affordable Housing
Mark Dollan dollan@mhvillage.com
Executive Editor
Patrick Revere patrick@mhvillage.com
Managing Editor
Matt Milkovich mattm@mhvillage.com
Contributing Editor George Allen gfa7156@aol.com
Senior Graphic Designer Merit Alcala merit@mhvillage.com
Contributors
NEWS BRIEFS 6 Industry Happenings: Updates from the World of Manufactured Housing EVENTS 12 Upcoming Industry Events FINANCING 21 Increase Occupancy and Profitability by Offering Chattel Financing
MHI 2019 CONGRESS & EXPO SPECIAL SECTION
34 Congress & Expo Features Top Speakers and Education 35 Event Schedule 36 Ensuring MH is Part of Federal Efforts to Address the Affordable Housing Shortage 38 MHI Offering Online Courses for Community Managers 40 The Big Easy Has Too Much Fun to Choose From 44 MHI CEO, President Richard “Dick” Jennison to Step Down at Year’s End BUILDER / RETAILER 47 2-10 Home Buyers Warranty Awards Home Builders 48 Legacy Housing's Kenny Shipley is all West Texas 54 Ask The Planner COMMUNITY 65 Is It Time to Sell Your Mobile Home Community? 68 The Pros and Cons and Dos and Don'ts of Filling Vacant Lots 72 From the Ground Up: Opening the First New Florida Community in 15 Years THE ALLEN LEGACY 82 History of MHI Congress & Expo Leads Back to Gub Mix
4 | MHINSIDER™ • MAY / JUNE 2019 • MHINSIDER.COM
Kevan Enger Dr. Lesli Gooch Ben Kadish Lee Krinzman Michael Power Jose Villarreal Donald Westphal
Cover Image
Image courtesy of Champion Homes
Advertising Sales
Matthew O’Brian Call (877) 406-0232 matthew@mhvillage.com
Disclaimer
Although we made every effort to ensure that the information in this issue was correct before publication, MHVillage, Inc. and the publisher do not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from negligence, accident, or any other cause. Opinions expressed are those of the author or persons quoted and not necessarily those of MHInsider or the publisher MHVillage, Inc.
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LETTER FROM THE PUBLISHER
Opportunity
A New Class of Manufactured Home Means a New Class of Opportunity By Darren Krolewski
W
hen talk of a “new class” of manufactured home began to make its way around industry circles a few years back, it was a little more than a concept: a collection of features and specifications identified through MHI-sponsored consumer research that would make potential homebuyers more likely to consider a manufactured home. The idea was to create an environment for manufactured housing to reach beyond the small, yet vitally important segment of affordable housing our industry provides for millions of Americans and offer a compelling alternative for consumers who have found themselves priced out of the middle housing market. Today, this new class of manufactured housing is becoming a reality. At this year’s main product shows in Louisville and Tunica, much of the buzz has centered around some of the first examples of this “new class” of home. Backed by the MH Advantage® program from Fannie Mae and the CHOICEHome™ program from Freddie Mac, retailers have the opportunity to offer a HUD-code home on real property that has all the characteristics of a sitebuilt home, with conventional mortgage financing and as little as 3 percent down. More than 15 manufacturers have already signed up to participate in these new programs. I don’t know about you, but that sounds like opportunity. Seizing it , however, may requ i re some out-of-the-box thinking.
The aspiring site-built homebuyer is somewhat different from the one that many of us are accustomed to attracting. For starters, they may not be setting out to buy a manufactured home. They’re looking for a home with the features and amenities they want, in an area they want to live, at a price they can afford. If that affordability comes from being built in a controlled environment, that’s great, but it may not have started out as a primary consideration. Many retailers already are very successful with this type of buyer. They know how to educate potential homebuyers on the high-quality construction and energy efficiency of a factory-built home. They take a consultative approach to selling. And they may be positioned as a builder-developer doing small subdivisions, urban infill or scattered-site development on their own or in partnership with area land owners. For retailers not accustomed to this type of buyer, it may require an evolution in the way they do business. Perhaps it is a separate brand for their retail center. Or an MH Advantage or CHOICEHome-eligible home merchandised on their retail lot, fully landscaped and decorated and with an attached garage. Maybe it’s dedicated sales personnel who have been specifically trained and educated on these new programs, or joint ventures with local developers. I suspect that not every retailer is going to be interested in this opportunity. Attracting a different market represents an investment in money, time and resources, and some may feel they are
content with the business they already have. Yet there’s a saying attributed to Albert Einstein that MHInsider contributor and industry consultant Ken Corbin frequently quotes during his presentations: “If you always do what you’ve always done, you’ll always get what you’ve always got.” I can think of no better way to characterize this opportunity. I haven’t met anyone in this industry who doesn’t want more. Whether it’s more market share, more leads or more closed transactions. This is a way to get there, even though it may take a little risk and a willingness to move out of the comfort zone. This year’s MHI Congress and Expo will host its first Retailer Roundtable on Wednesday, May 8. Among the educational content for retailers, Fannie Mae and Freddie Mac will be on hand to explain their new programs and how you can use them to grow your business. If you want to be at the forefront of an emerging retail trend in our industry, you’d do well to attend. Unless, of course, you’re happy to get what you’ve always got. MHV Darren Krolewski is co-president and chief business development officer of MHVillage, the number one website for manufactured homes, retailers and communities. Prior to joining MHVillage in 2014, Darren held senior marketing positions in the telecommunications, advertising and financial services industries — and was a partner in a marketing consulting f ir m ser ving the housing industry.
MHINSIDER.COM • MAY / JUNE 2019 • MHINSIDER™ |
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NEWS BRIEFS
Happenings
INDUSTRY
Updates from the World of Manufactured Housing…
RHP Buys 17 Communities RHP Properties, the nation's largest
Austin Community Finalized Roberts Communities , owner
privately held owner and operator of manufactured home communities, acquired 17 communities in five states, containing 3,177 sites. The communities are in Arizona, Colorado, Indiana, Pennsylvania, and Wisconsin. With the new acquisitions, RHP Properties now owns and operates 254 manufactured home communities with more than 63,659 home sites nationwide.
and operator of manufactured home communities in Arizona, Texas and Colorado, announced the final phase for The Reserve, a gated resort community in the Del Valle suburb of Austin, Texas. The Reserve offers attainable housing for the 55+ market, with 30 final homes and lots available. The anticipated lot delivery will bring homes to the market for 50 percent less than the average single-family home planned in the area, currently priced from $202,000. The community caters to 55+ adults looking to downsize, and offers a low-maintenance home while still living an independent lifestyle.
Meritus Buys Three Communities Mer it us Commu n ities a c quired three all-age manufactured housing communities in Michigan and Indiana, comprising 1,582 sites. Headquartered in Farmington Hills, Mich., Meritus Communities owns and manages a portfolio of 48 communities across six states, comprising approximately 19,500 sites.
Illinois Raises Minimum Wage Illinois Gov. J.B. Pritzker signed a bill phasing in a $15 minimum wage for his state over the next six years. The measure will increase the state’s $8.25-an-hour minimum wage to $9.25 in January 2020. The minimum wage will increase to $10 in summer 2020. In January 2021, it will rise to $11 an hour, and continue to rise a dollar a year until it hits $15 an hour in 2025, according to the Illinois Manufactured Housing Association.
Monroe & Giordano Finances Ohio Community Monroe & Giordano, a Tampa, Fla.based mortgage company, arranged a permanent loan of $2.25 million on DB Estates Manufactured Home Community in Whitehall, Ohio. The loan had an interest rate of 5.08 percent with a 10year term amortized over 30 years. The 123-unit community, built in 1962, is an all-ages community with an occupancy rate of 98 percent.
eration development in St. Louis, Mo. Net Zero purchased lots from NorthSide Regeneration to build 250 energy-efficient, single-family homes adjacent to the site of the future multi-billion-dollar National Geospatial-Intelligence Agency Western Headquarters. The display homes were expected to be completed by April. Prices will be set after completion. The homes are expected to range in size from 1,200 to more than 3,000 square feet. All the homes will have the potential to be “net zero”, which means they will produce enough renewable energy to power themselves.
Sun Sets Distribution Rate Sun Communities’ board of directors approved setting the 2019 annual distribution rate at $3 per common share, an increase of $0.16, or 5.6 percent, over the $2.84 per common share for 2018. This increase began with the first-quarter distribution paid in April 2019.
Legacy Separates Leadership Roles Legacy Housing Corp. separated
Net Zero Builds Energy-efficient Homes Net Zero broke ground on three dis-
the roles of chief executive officer and executive chairman of the board of directors. Accordingly, Curtis D. Hodgson transitioned from his role as co-chief executive officer to become Legacy’s executive chairman of the board of directors. Hodgson will remain actively involved in this role, with respect to over-
play homes for its Saint Louis Park Place community within the NorthSide Regen-
continued on page 8
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The Highest Price Paid for Your Property n Preserving the Employment of Your Staff n You’ll Work with the Principals, Ensuring a Smooth Transaction n A Confidential, No Obligation, Free Property Evaluation n No Brokers. No Commissions n A Quick and Seamless Transition n
States where RHP currently own MHCs
Joshua Mermell-Senior Vice President of Acquisitions | Cell: 248.508.7637 | Office/Direct: 248.538.3312 31200 Northwestern Hwy. Farmington Hills, MI 48334 | rhp-properties.com MHINSIDER.COM • MAY / JUNE 2019 • MHINSIDER™ |
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NEWS BRIEFS
continued from page 6
all corporate strategy and manufactured home park development and financing. Kenneth E. Shipley, previously co-chief executive officer with Hodgson, will become the sole CEO of Legacy Housing. Shipley also has been appointed by the board of directors to serve as Legacy Housing’s president. Hodgson and Shipley co-founded Legacy Housing in 2005. Read more about the company's history on page 48.
Illinois Updates MHC Utility Rules The Illinois Department of Public Health (IDPH) updated requirements for water supplies, sewage disposal, electrical systems and refuse disposal in mobile home parks and manufactured home communities. The new rules make distinctions between community and non-community water systems and public water systems; update incorporated standards and other documents; and classify violations of each requirement as Type A, B or C.
Type C violations are those that may cause serious injury or death to residents, employees or the public; IDPH may take immediate action, including closure, to abate Type C violations and will impose fines of $100 per violation per day. Type A violations carry no penalty if corrected within 10 days. Type B violations and uncorrected Type A violations carry fines of $25 per violation per day. Owners and managers of mobile home parks and manufactured home communities are affected by the new rules. The Illinois Manufactured Housing Association was involved in the development of these regulatory changes, working with IDPH to ensure they would not unduly impact its members.
APM Expands Into Texas American Pacific Mortgage (APM) expanded into Texas by opening its first Austin location, under Area Sales Manager Cody Velkovich. APM was
Aggressively Seeking Properties to Buy Manufactured Home Communities Land leased communities with 100+ sites in strong markets, nationwide Serious sellers contact:
Richard O' Brien (203) 942-2745 ext. 110 robrien@athenarealestate.com www.athenarealestate.com 8 | MHINSIDER™ • MAY / JUNE 2019 • MHINSIDER.COM
founded in 1996 and offers a wide array of mortgage products including FHA, VA and USDA home loans, as well as manufactured housing loans.
YES! Buys Midwest Communities YES! Communities acquired five manufactured home communities comprising 1,460 residential home sites in Indiana and Michigan. As a result of the acquisition, the YES! portfolio now includes 214 communities across 18 states, containing 55,829 home sites. Terms of the transaction were not disclosed.
Clayton Expands Nashville Facility Clayton Home Building Group announced a multi-phase renovation at its Clayton Nashville homebuilding facility. The first phase will focus on improvements to the breakroom, expanding from 1,500 square feet to about 3,500 square feet, with seating for 180 team members. Next phases will include updates to the training room and frame shop, with additional features like upgraded lighting, a dust mitigation system and overhead cranes. Clayton Nashville is one of multiple home building facilities Clayton Home Building Group plans to remodel or expand in 2019.
Cavco Appoints Blount to Board Cavco Industries’ board of directors appointed Susan L. Blount as an independent director. Blount, an experienced financial services executive, retired as executive vice president and general counsel of Prudential Financial in 2015, having served as general counsel since 2005. Blount's appointment filled the vacancy on Cavco's board of directors, and brought its membership to five, all of whom are independent. She will be a member of the company's Corporate Governance and Nominating Committee and the company's Compensation Committee.
NEWS BRIEFS
Tiny-home Park Approved in North Carolina A tiny-home park in Clear Creek, N.C., was approved by the county zoning board. Trail Creek RVs will consist of 14 sites for tiny homes, with seven on either side of an asphalt road ending in a cul-de-sac. There will be a common area, with a total of six septic tanks and two wells, according to local newspaper Times-News Online. The 9.25-acre lot is vacant and owned by Doug Anderson, who has owned a mobile home park in the past and plans to make improvements to the property. The zoning board added conditions to
its approval, including that any homes delivered will be delivered during daylight hours, and any pets on the property are to be leashed, according to the newspaper.
Florida Park Sold; Won’t be Redeveloped After more than 10 years on the market, Sharp’s Mobile Home Park in Eustis, Fla., was finally sold. The new owner is developer Hansel Rodriguez of Delaware-based COARE Communities. According to Daily Commercial, a local newspaper, the sale follows an uncertain year for park residents, who
faced eviction in early 2018 to make way for an upscale community. It would have meant the demolition of the community originally built in 1947, and dozens of seniors would have been evicted, many with no place to go. The project fell through because the developers could not secure funding. Rodriguez came in with plans to keep the mobile home park running, and promised to bring it up to code. He also told residents that he’d have to raise rents. Most residents signed statements agreeing in principle to the terms, according to the newspaper. continued on next page
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Fannie Mae | Freddie Mac | FHA • HUD | Market Rate and Affordable Housing | Manufactured Home Communities | Balance Sheet Bridge Financing | Student and Senior Housing | Healthcare Properties SunTrust Bank is an Equal Housing Lender. Standard credit criteria apply. SunTrust Bank, Member FDIC. ©2018 SunTrust Banks, Inc. SUNTRUST and the SunTrust logo are trademarks of SunTrust Banks, Inc. All rights reserved.
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NEWS BRIEFS continued from previous page
Dennis Adams, left, and Britt Richards, right, were inducted into the Alabama Manufactured Housing Industry Hall of Fame. Photos courtesy of the Alabama Manufactured Housing Industry Hall of Fame.
Alabama Inducts Two Into Hall of Fame Dennis Adams, president of Timberline Homes, and Britt Richards, vice president of operations and marketing for Clayton Home Building Group, were inducted into the Alabama Manufactured Housing Industr y Hall of Fame. Adams has been in the manufactured housing industry for 34 years. He opened Southern Lifestyle in 1984 and Timberline Homes in 2001. He owns and operates multiple retail centers throughout the Southeast. Richards began his career in the manufactured housing industry after graduating from the University of North Alabama. He joined Southern Energy Homes in the spring of 1988 as a sales representative. In 1995, he was elevated to sales manager, and became a general manager in 2000. Since 2010, Richards has served as an executive for the Clayton Home Building Group, first as a regional vice president and currently as vice president of operations and marketing. He oversees 10 facilities in Alabama, Texas and Tennessee.
Freddie Mac CEO to Retire; Successor Named Freddie Mac announced that Donald H. Layton will retire as its chief executive officer, and that David M. Brickman has been appointed to succeed him effective July 1, 2019. Brickman will become a member of the Freddie Mac board of directors at that time.
Obituaries Kenneth A. Monicatti , 76, died March 20, 2019. Monicatti was born Jan. 22, 1943 in Detroit, Mich. He founded the advertising agency All Seasons Communications in 1984. The Michigan Manufactured Housing Association began work ing w ith Monicatti and his organization over 30 years ago. Monicatti facilitated the Manufactured Housing public relations and advertising campaign with Ernie Harwell, famed baseball broadcaster, as the industry spokesperson. Monicatti’s career started at the family dealership, Monicatti Chrysler Plymouth. He sold boats and snowmobiles at Monicatti Boats and Motors. He is survived by his wife of 55 years, Linda (nee Kramer); children Beth (Andrew Blank) Monicatti-Blank, Jill (Michael Rowley) Monicatti-Rowley, Amy Monicatti, and the late Mary L. Monicatti; grandchildren Megan, Benjamin, Carlo, and Emilio; and siblings Gloria (the late Tom) Schettler, the late Lawrence (Kathy) Monicatti, and the late Michael (Sandra) Monicatti. Ronald Paul Kalisz of Metamora, Mich., died Feb. 13. He was 81. Kalisz was born in Melvindale, Mich., in 1937. He graduated from Dryden High School in 1955. Upon graduation, Kalisz enlisted in the U.S. Marines and served for three years. He married Diane Gibson in 1959. Kalisz owned and operated RV and mobile home supply businesses for more than 55 years. He was a partner
10 | MHINSIDER™ • MAY / JUNE 2019 • MHINSIDER.COM
at Richfield Trailer Supply in Flint, Mich. He retired in 2011. Gerald (Jerry) H. Miller of Mitchell, Neb., died Jan. 31. He was 83. Miller was born in South Dakota in 1935. In 1970, he moved to Scottsbluff, Neb., where he worked for several mobile home dealers until opening his own lot, Leisure Living Mobile Homes in Mitchell. Miller closed his sales lot in 1977, but returned to work a few months later delivering mobile homes nationwide. He pulled mobile homes until 1990, when ill health forced him to retire. Miller earned his pilot’s license and purchased an airplane that he used to fly customers to factories. Miller married Joyce D. Hengl in 1955, and they had five children. In 1972, the Millers purchased 10 acres of land on the outskirts of Mitchell. They put their new home on 5 acres, and the other 5 acres became Paradise Acres Mobile Home Park. They managed and maintained the park until August 2015, when it was sold. Bruce R. Tolchin of California died Nov. 19, 2018, after a struggle with Stage 4 cancer. Tolchin built Onyx Capital Corp., based in Los Angeles, over a 30-year span. Onyx is a commercial real estate mortgage banking firm specializing in multi-family and manufactured housing community financing. Tolchin built a management team of experienced real estate professionals who have been with Onyx for more than a decade, and this team will continue to run the business going forward.
Industry Events
Upcoming
EVENTS
National Tiny House & Simple Living Jamboree
May 7-9 • Las Vegas, Nev. Las Vegas Convention Center With an abundance of consumerfocused events in the tiny house market, the jamboree will now focus more on the business of small building and construction technology, and will now be part of the National Hardware Show.
Manufactured Housing Communities of Arizona
May 15-17 • Chandler, Ariz. Wild Horse Pass Hotel & Casino This conference showcases retailers of manufactured homes and recreational vehicles, as well as suppliers of goods, materials and other services to the industry.
MHI Summer Legislative Fly-In
June 10-11 • Washington, D.C. The Liaison An intensive two-day program that gives participants an inside look at the public policy process. Participants also visit their members of Congress to advocate for the industry.
MHFacTOURy Summit 2019
June 17-18 • Elkhart, Ind. RV/MH Hall of Fame Two days of factory tours and educational workshops. Retailers, community owner/operators and vendors from around the nation will come together to learn the latest trends in community operation, management, finance, sales and products.
Multi-State Convention
July 27-29 • Orange Beach, Ala. Perdido Beach Resort Join the Alabama, Louisiana, and Mississippi MH associations
for an exciting convention that includes networking receptions, a banquet, educational speakers, entertainment and much more.
RV/MH Hall of Fame Induction Dinner
Aug. 5 • Elkhart, Ind. Northern Indiana Event Center Ten new members will be inducted into the RV/MH Hall of Fame. The ceremony is held annually to honor the members of the hall and the work of each industry.
Rocky Mountain Home Association 2019 Annual Meeting and Conference
Aug. 21-22 • Black Hawk, Colo. Ameristar Casino & Spa Learn the latest trends and tools to apply to your business. Included will be a night of networking during the Industry Trade-Show/Exhibitor Showcase on Wednesday, Aug. 21.
Florida Manufactured Housing Association Annual Convention
Sept. 11-12 • Orlando, Fla. Rosen Plaza Hotel Florida’s largest gathering of manufactured housing professionals.
28th Annual International Networking Roundtable
Sept. 8-10 • Indianapolis, Ind. The Alexander Hotel Hosted by George Allen, this conference draws hundreds of the leading land-lease community owners and operators for a discussion on best practices and deal making. A Manufactured Housing Manager class will be held Sept. 11 at the same location.
COMMERCIAL REAL ESTATE DEBT & EQUITY | INVESTMENT SALES | LOAN SERVICING
MHI Annual Meeting
Sept. 22-24 • Savannah, Ga. The Westin Savannah Harbor Golf Resort & Spa MHI’s largest membership meeting of the year provides an opportunity to exchange information with industry friends, stay current on housing marketplace trends and attend the board, committee and division meetings. Several awards will be presented.
2019 WMA Convention & Expo
Oct. 7-10 • Reno, Nev. Grand Sierra Resort and Casino Western Manufactured Housing Communities Association’s annual event blends educational programs with entertainment and networking forums.
SECO19
Oct. 9-10 • Atlanta, Ga. Hilton Atlanta Airport The Southeast Community Owners annual symposium has turned into one of the largest gatherings of MH community owners in the nation.
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Have an event you'd like listed here?
DEBT AND EQUITY
INVESTMENT SALES
DALE STEWART
DON VEDEEN
303.225.2118
602.952.4043
BRIAN FISHER
JARED BOSCH
303.225.2120
602.952.4049
REINA ABBOUD
CHRIS MICHL
804.729.6634
602.952.4051
Call our managing editor, Matt Milkovich, at 616-214-3181, or email mattm@mhvillage.com.
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PARKS & COMMUNITIES WHOM HAVE ALL INSTALLED GAMA SONIC SOLAR LIGHTS • Genoa Way MHC - Houston, TX • Riverside Meadows MHP - Riverside, CA • Millcreek Estates MHP - New Holland, PA • Helena Mobile Park - San Diego, CA • Capitol City MHP – Denver, CO • Viking Village MHP - Alexandria, MN
• Plantation On The Lake MHP- Calimesa, CA • La Villa MHP - Las Vegas, NV • Chestnut Cove MHP - Ooltewah, TN • Western Skies MHC - Gallup, NM • Cedar Village MHP - Carrolton, GA • Legacy Communities - Harrison, OH
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FINANCING
FINANCING
FANNIE MAE Exploring
Innovative Financing for Affordable
Housing By Jose Villarreal, Fannie Mae
M
anufactured housing has helped low- and moderate-income households achieve homeownership since the 1970s, and continues to be an important affordable housing option for both owners and renters. Rent prices in manufactured housing often average half the cost of comparable apartments, making manufactured housing one of the largest sources of unsubsidized affordable housing in the country. According to the Manufactured Housing Institute, about 50,000 manufactured
housing communities (MHC) exist in the U.S., housing about 2.7 million Americans. Some of these communities have thousands of homes; others are small, where two or three homes share a parcel. Fannie Mae is committed to supporting these important communities and the industry with the help of our lender partners. In rural communities, 66 percent of renter households occupy single-family homes, 19 percent occupy apartments, and 15 percent occupy manufactured housing rentals. While many of these
manufactured housing rentals are provided by an owner on an individual plot of land, others are located in larger manufactured housing communities. Nearly 2,000 counties with rural census tracts have at least one MHC. In fact, about a quarter of all MHCs — more than 10,000 — are located in rural counties. In January 2018, Fannie Mae launched its three-year Duty to Serve (DTS) Underserved Markets Plan. Under the plan, we are developing solutions to address critical housing challenges in three markets that are underserved by continued on next page
MHINSIDER.COM • MAY / JUNE 2019 • MHINSIDER™ |
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FINANCING
continued from previous page
the housing finance system but offer significant opportunities — manufactured housing, affordable housing preservation, and rural housing. Our team is focused on innovating, testing, and learning how to best provide liquidity to the MHC market segment. Since our first pilot in 2000, our book of business has grown, totaling over $9 billion in 2017. That year, we financed over $1.8 billion in MHC business, representing 22 percent of the industry for the year. As of Q3 2018, we had already acquired $1.8 billion and were on our way to surpassing 2017 numbers. Much of our success is due to innovative products, best-in-class service, and enhanced dele-
and stability of manufactured housing across the country. Over the past few years, our team has met with industry leaders, presented at major industry conferences, and conducted extensive research to examine needs and to listen to concerns. We are looking to provide innovative solutions, including:
Non-traditional Community Ownership Resident Owned Communities (ROCs):
In a ROC, the owners of each manufactured home in the MHC form a nonprofit entity, which holds title to
Renter Households in Rural Communities 15%
66%
■ Single-Family 19%
■ Apartments ■ Manufactured Housing Rentals
gation to our lender partners through the Delegated Underwriting and Servicing (DUS) model. The DUS model offers a wide variety of financing structures for MHC owners and allows us to do more MHC business with greater certainty of execution, providing borrowers with faster decisions and quicker closings.
Doing More for MHCs Under Duty to Serve
To support our efforts, we’ve engaged broadly with the manufactured housing industry. We formed a Manufactured Housing Advisory Council to inform our work in this market. At Fannie Mae, the Multifamily MHC team is working on models to preserve the affordability
the land and manages the community. Each owner of a manufactured home is an equal shareholder or member of the ROC, and owns their own manufactured home on a site that is leased from the ROC. The ROC has control over lot rent, community repairs, and improvements — providing greater protection to the residents against arbitrary evictions than in a typical MHC. Fannie Mae has partnered with ROC USA and National Cooperative Bank (a Fannie Mae lender partner) to develop and implement a test pilot program to acquire mortgage loans secured by a ROC property, and gain more understanding of these financing structures. With the approval of our regulator, the Federal Housing Finance Agency, we plan to provide financing for
18 | MHINSIDER™ • MAY / JUNE 2019 • MHINSIDER.COM
up to five ROC-secured mortgage loans in 2019, and more in 2020.
MHCs owned by nonprofits:
We are also developing a product to increase loan acquisitions for MHCs owned by other types of nonprofit entities. In many areas of the country, manufactured housing remains the largest stock of affordable housing. Nonprofit entities purchase these communities to preserve their affordability and to provide funds to make improvements. Typically, the nonprofit entity is able to make these purchases through grants provided by city, county, and state government, combined with low-interest private loans. However, a demand exists for additional funding sources and more flexible financing terms. We are currently testing models to increase loan acquisitions in this space to help in the preservation of these properties, and plan to release a product enhancement this year.
Protections for MHC Tenants Tenant Pad Lease Protections (TPLPs):
The Federa l Housing Finance Agency (FHFA) has outlined specific protections to afford tenants of MHCs certain additional rights in areas where state law does not already provide mandatory tenant protections, and has tasked Fannie Mae with providing increased liquidity to MHCs that meets the specified minimum TPLPs. These TPLPs address renewable lease terms, rent increases, rent payments, unit sale and sublease rights, and advance notice of a planned sale or closure of the community. Our research found that no states or localities currently require all of FHFA’s proposed TPLPs. We have consulted with community owners, states, manufactured housing organizations, and lenders to understand the challenges and benefits of adoption. We have learned that requiring owners to convert all leases within a community prior to acquisition can be onerous. We have tested several models to incentivize owners who adopt the TPLPs. In early
FINANCING
2019, we will launch a product enhancement to provide a choice for owners when considering financing options. We feel these efforts demonstrate an innovative spirit and our long-standing commitment to MHC. Moreover, as we
better serve our markets. Beyond DTS, we’ll work to keep our core MHC business strong, supporting and listening to our customers and the market. We appreciate the engagement of the industry as we work together to
mission to create and preserve affordable housing for ow ners and renters throughout the country. MHV Jose Villarreal is a product development manager supporting Fannie Mae’s Multifamily Affordable Innovations team, and leads the Multifamily Manufactured Housing initiatives under the Duty to Serve rule. He is responsible for outreach, research, and development of innovative solutions to address the challenges identified in the Duty to Serve rule.
Reach Over 30,000 Manufactured Housing Professionals in Print and Online To advertise, call:
1-877-406-0232 enter the second year of our DTS plan execution, we’ll continue to learn and adjust as necessary to get it right and
realize the potential of MHC for people and communities nationwide. We stand committed and engaged in our
SPACE & ART DEADLINE FOR JULY / AUGUST ISSUE: May 24, 2019
MANUFACTURED HOUSING DIVISION Come visit us at the
2019
congress & expo!
Construction or Purchase loan options for each customer’s needs
may
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CONTACT A MANUFACTURED HOME LOAN EXPERT TODAY!
1.844.370.3323 | ManufacturedHousing@ffbf.com ffbf.com |
WE ARE YOUR TRUSTED LENDER For all your lending needs
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© 2019 First Federal Bank is a FDIC insured nationally chartered, mutual savings bank approved lender. Restrictions and other conditions may apply. Nothing herein is or should be interpreted as an obligation to lend. Loans are subject to credit and property approval. Property insurance is required, including flood and wind insurance where applicable. Trade/service marks are the property of First Federal Bank, Residential Mortgage Licensee: 408902. Residential Lending Division is located at 9700 Philips Highway, Ste 101 & 102, Jacksonville, FL 32256.
MHINSIDER.COM • MAY / JUNE 2019 • MHINSIDER™ |
19
MARKET KNOWLEDGE & EXECUTION
COLLIERS INTERNATIONAL
Manufactured
Housing Group
DISPOSITION SERVICES
VALUATION SERVICES
DEBT & EQUITY SERVICES
Manufactured home communities and RV resorts are a rapidly-evolving asset class. Colliers Manufactured Housing Group & Valuation Services team of experts bring experienced, proven institutional representation to the industry. We use market knowledge, technology, the Colliers network of 15,400 professionals in 69 countries and unparalleled execution to help you achieve your goals. MANUFACTURED HOUSING GROUP LEADER
OUR EXTENSIVE ADVISORY SERVICES INCLUDE • Capital Markets & Investment Sales • Acquisitions & Dispositions • Valuation & Advisory Services • Debt & Equity Finance • International - Canada, Europe, Australia • Distressed Assets - Bank REO & Special Servicer colliers.com/ManufacturedHousing
Michael Nissley
National Director, Manufactured Housing Group +1 561 479 1588 mike.nissley@colliers.com
VALUATION SERVICES GROUP LEADER
Bruce Nell MAI , AI-GRS, MRICS ,
Executive Managing Director, National Practices +1 614 437 4687 bruce.nell@colliers.com
FINANCING
Increase Occupancy and Profitability by Offering Chattel Financing By Ben Kadish Photo courtesy of Rickert Properties
A
s the affordable housing crisis continues to impact the housing market, the demand for affordable living options is rapidly increasing, providing new opportunities to fill this gap in the market. Manufactured housing communities (MHCs) have become a solid affordable housing option for populations being priced out of traditional affordable options. At the same time, many MHCs themselves have undergone a significant transformation over the past two decades. For both already enhanced MHCs and communities still in need of improvements, along with the demand fundamentals of today, new financing opportunities have arisen for MHC owners trying to turn a profit.
Aesthetics, Affordability Can Co-exist MHC owners have made great strides toward shifting the perception and the reality of MHC living. Many new MHCs include community-wide amenities like clubhouses, swimming pools and tennis
and basketball courts. The majority of the homes are move-in-ready, three-bedroom houses with full kitchens, baths
"By owning the homes and renting them out to residents, MHC owners can increase cash flow and enhance the communal aspects of the parks." – Ben Kadish, Maverick Commercial Mortgage
and laundry. The subdivision setup of MHCs allows for private parking, individual gardens, lawns and patios on small, easy-to-maintain lots. Affordability comes into play considering that the quality of the MHC units is equal to site-built homes, but the cost comes in at a fraction of that of site-built homes. This allows the residents to save up to hundreds of dollars per month
on their monthly rent or mortgage payments, as well as utilities, when compared with living in an apartment or site-built home.
The New Normal of MHC Mortgages Just over a decade ago, MHC residents were able to walk into any manufactured home dealership and purchase their own home to move into their community of choice. In that case, they could apply for a chattel mortgage, allowing them to pay off the home while not owning the land it sits on. These days, the path to manufactured homeownership looks a little different. Most of these dealerships closed down in the wake of the Great Recession, especially in the Midwest. And in the mobile home parks themselves, vacancies increased — resulting in foreclosures on the homes owned by residents. In these vacant properties, MHC owners have found new opportunities. continued on next page
MHINSIDER.COM • MAY / JUNE 2019 • MHINSIDER™ |
21
FINANCING continued from previous page
You Build It, We’ll Back You Up. Together, we build the confidence that sells homes.
Ron D’Ambra National Manufactured Modular Program Manager
803.917.1946 rodambra@2-10.com
One method to increase occupancy and profitability is for the MHC to own the new inventory of homes and finance them with chattel financing, or rent the homes to residents. By providing financing to residents, MHC owners can increase the occupancies at the properties and for their entire portfolio. And, when refinancing, MHC owners can receive cash-out components to use toward property improvements. By owning the homes and renting them out to residents, MHC owners can increase cash flow and enhance the communal aspects of the parks, adding further value to the community and its homes.
Theory in Action
without going through the entire refinancing of the property. The dynamics of MHC ownership are changing, and great potential exists for savvy owners who are ready to refresh tired, less desirable properties. At the same time, these owners can provide much-needed affordable options to a housing market that’s desperate for them. For MHC owners that don’t have a financial officer who understands these more complex financing options, a commercial mortgage banking firm can help prepare the park and owner. A commercial mortgage firm can visit the property to ensure that it is up to the expectations of the lender, appraiser and engineers. With full cooperation and commitment, mortgage and chattel loans can close in 45 to 75 days. MHV Ben Kadish, president and founder of Maverick Commercial Mortgage, is a mortgage banking professional with more than 37 years of experience. developed for
For example, one MHC management firm needed funds to bring in new and used mobile homes to some recently acquired properties in Missouri in 2006. To fund the acquisition of these homes to increase occupancy, the firm established a relationship with a bank to finance its chattel portfolio, and used other financing for new house acquisitions. The increase in occupancy and value Ad was originally creation allowed propertyand to be "Thethe Journal" has been resized for refinanced in 2018 with a substantial MHInsider. cash-out component. They were able to ™ set aside funds for additional site work See directory The Journal 10-25-16 and down payments for more houses, source pics etc. and the loan has an earn-outfor component in addition to being non-recourse. Reach Over 30,000 In 2019, 13 years after starting the Manufactured Housing chattel finance business, the firm refiProfessionals in Print and Online nanced 800 homes with a new chattel financing agreement for $11 million to The MHInsider™ is a trusted fund the acquisition of new homes, as resource that manufactured housing well as the consolidation and reduction professionals choose to stay abreast of interest rates for the entire portfolio. of industry developments and In our experience, these loans have get the information they need to been funded by a range of lenders, make informed decisions. including agencies, CMBS, banks and debt funds. Many of them had earn-out To advertise, call: provisions, so as the property cash flow increased over the loan term, some lenders would fund out cash equity to HURRY! DEADLINE FOR THE borrowers, allowing for liquidity events
22 | MHINSIDER™ • MAY / JUNE 2019 • MHINSIDER.COM
1-877-406-0232 JULY/AUGUST ISSUE IS MAY 24, 2019!
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FIGHTING FOR
FLEXIBLE FINANCING Our dedicated team of MHC originators and underwriters deliver superior loan terms with white glove customer service. Whether you need fixed- or floating-rate financing, Hunt’s non-recourse loan offerings from Fannie Mae, Freddie Mac, SBL, and our proprietary programs provide customized, permanent solutions to your acquisition or refinancing needs. For owners seeking transitional financing, our balance sheet bridge program enables a quick and efficient execution.
RECENT DEALS
$37M
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Boulder, CO
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Freddie Mac
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CONTACT HUNT’S MHC STRIKE FORCE: CHAD THOMAS HAGWOOD - MHC PRODUCTION HEAD | 205.902.7827 chad.hagwood@huntcompanies.com OWEN BREHENY | 212.521.6371 | owen.breheny@huntcompanies.com BRANDON PATE | 205.937.4327 | brandon.pate@huntcompanies.com JOSH MESSIER | 212.588.2102 | joshua.messier@huntcompanies.com hunt.loans/MHInsider
FANNIE MAE
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FREDDIE MAC
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Please join our celebration and honor the Class of 2019 Monday, August 5, 2019 Induction Dinner Cocktail reception, dinner, speaker, and induction ceremony at the RV/MH Hall of Fame 21565 Executive Parkway Elkhart, Indiana 5:30 pm – 6:30 pm Cocktail Reception 6:30 pm – 9:00 pm Induction Ceremony Cash Bar Only (No Credit Cards)
Class of 2019 RV Inductees
Randy Biles .
. . . . . . . . . . . . . Pikes Peak Traveland . . . Automation & Manufacturing Systems
Bruce Hopkins . Lance Wilson . Daryl Zook
. . . . . . . . . . . . . . . . . . RVIA
. . . . . . . . . . . Florida RV Trade Assoc.
. . . . . . . . . . . . . . . . . . . . . . . KZ RV
Class of 2019 MH Inductees D. Raymond Broderick. John Carey .
. . . . . . . Superior Homes
. . . Modern Home Sales & Midwest Homes
Walter Comer . . . . . . . . . . . . . . Adventure Homes LLC
Richard Ernst
. . . . . Financial Marketing Associates, Inc.
Leo Poggione . . . . . . . . . . . .
For More Information or to Make Reservations Visit: www.rvmhhalloffame.org/induction or Call 574-293-2344
MHINSIDER.COM • MAY / JUNE 2019 • MHINSIDER™ |
25
BUILDER / RETAILER
Harris Homes' Success in Pre-Owned Sales is Built on Relationships By Matt Milkovich
W
hen selling used mobile homes, maintaining good relationships with park managers is crucial. “There’s no better referral base than the park manager, who deals with every single tenant in the park,” said Cory Roberts, owner of Harris Mobile Home Sales in Tucson, Ariz. “If you can stay in their good graces, you stand a much better chance of successful sales in their parks.” Harris Mobile Home Sales, which tries to get its sales people in manufactured housing communities as often as possible, gets a large number of its referrals from park managers. “A lot of them we’ve known for many years,” Roberts said. “At the end of the day, they’re not under any obligation
to give us referrals, so the better we treat them, the more likely they are to recommend us.” Harris Mobile Home Sales concentrates on selling used mobile homes in the Tucson area, most of which already sit in community lots. The company — which currently has 10 sales agents, all independent contractors — sells about 130 homes per year, Roberts said. Roberts bought Harris Mobile Home Sales in 2007 from original owner Larry Harris. Harris, who founded the company in 1979, first hired Roberts as a salesman in 1995. Roberts, now 44, was born and raised in Tucson, and still lives there with his wife and two children. He didn’t anticipate a career in sales when he was younger, even though his father was
26 | MHINSIDER™ • MAY / JUNE 2019 • MHINSIDER.COM
an insurance salesman. He attended college for a while but left early to join the workforce. Roberts was a cook, with a second job taking care of cars in a car lot, when Harris hired him to sell manufactured homes. “I really enjoyed cooking, but the money was terrible at the time,” Roberts said. Roberts’ connection with Harris goes back a long way — he’s known him since he was 5 years old. His father and Harris were friends. Despite the long history, Harris wasn’t sure if Roberts — who lacked a background not only in sales, but manufactured housing — was right for the job, but he decided to give the younger man a chance. “The opportunity came about because we were friends,” Roberts said. “It wasn’t something I had planned on or looked
BUILDER / RETAILER
“There’s no better referral base than the park manager, who deals with every single tenant in the park,”
for. But once I started doing it, I really liked it. I didn’t make a lot of money my first year, but I knew I could.” It took Roberts awhile to find his sales style. His first trainer was an “old school” salesman from Texas — pushy and aggressive. “I had my doubts that I could ever be like that guy,” Roberts said. “It just wasn’t in me. Eventually, I realized I didn’t have to be like him. There are a lot of different ways to sell. You don’t have to be pushy. But you do have to be knowledgeable and available.” Harris himself was an easygoing guy. He wasn’t detail-oriented (his wife did the books), but he was well-liked and a good salesman, Roberts said. “He taught me the basics of taking care of your salespeople,” Roberts said.
– Cory Roberts, Harris Mobile Home Sales
“He also taught me how to recognize what customers want, to try to identify the things that are important to them.” After a few years, Roberts became Harris’ sales manager. He ran the office, assisted the other salespeople and closed all the deals. “He always told me I would either buy the business when he retired, or run it for him when he retired,” Roberts said. “It made more sense, for both of us, for me to purchase the business.” Roberts bought Harris Mobile Home Sales a dozen years ago. Harris isn’t associated with the business anymore, but Roberts still talks to him frequently.
Adapting to Change
Roberts also sells real estate. He’s been a licensed realtor with Tierra Antigua
Realty for 15 years. He earned his real estate license because some of his mobile home deals also involved land sales. He said the manufactured housing market fluctuates at a different pace than the real estate market. Sometimes they move in the same direction. Often, they move in opposite directions. Real estate was booming in the early 2000s, for example, but the mobile home market was not. Years before the Great Recession hit the real estate market, the same cycle played out in the manufactured housing sector: banks loaned money to too many buyers with bad credit, leading to a plethora of repossessions. The banks went under — and to this day, it’s difficult for buyers to get a loan on a used mobile home. They have to pay cash or arrange continued on page 30
MHINSIDER.COM • MAY / JUNE 2019 • MHINSIDER™ |
27
BUILDER / RETAILER continued from page 27
private financing, often at short terms and high interest rates, Roberts said. Business didn’t get any easier during the Great Recession. Roberts bought Harris Mobile Home Sales in 2007 — not the best year, perhaps, to buy a housing business. “For most people, that would be a model for disaster,” he said with a chuckle. But the company survived, maintaining a minimal number of clients. Its survival was aided by the growth of social media and online advertising — much cheaper ways to advertise than buying space in newspapers and the Yellow Pages, Roberts said.
The Tucson Market
Throughout all the ups and downs of the manufactured housing sector, the mainstay of Harris Mobile Home Sales has always been 55+ communities. For a long time, that market was primarily “snowbirds”, who would flock to Tucson from the Midwest or East Coast for six
months of warmer weather. That’s still a big part of the business, but rising rents are driving many buyers to seek more permanent living situations. Most buyers these days are at the end of their careers. They want to downsize. They’re done with the big house, big yard and 30-year mortgage. They want to pay $30,000 or $40,000 — typically with cash — for a nice double-wide in a 55+ community, Roberts said. Tucson’s rising lot rents are driven, at least in part, by independent owners selling their communities to large corporate entities. These out-of-state entities, unfamiliar with local market trends, are raising rents more aggressively. But rising lot rents have led to significant vacancies. The new owners are “dumping loads of money” into rehabbing park facilities and filling vacant lots with new homes, but that strategy isn’t working as well as originally hoped, Roberts said. “My direct experience with these communities is that the sales have not been
very successful, or at least not anywhere close to what the community owners projected when making the decision to buy and install new units,” he said. Harris Mobile Home Sales has a history of building relationships with park owners (as well as managers), who have used the company’s services to sell park-owned units and to find homes to fill vacant lots. But it can be difficult to build personal relationships when a park is owned by a corporation that’s based in another state. It helps when park employees are given the authority to make independent decisions, Roberts said. MHV Matt Milkovich, MHInsider’s managing editor, has an extensive journalism background. He was managing editor of two agricultural trade magazines for several years, and before that served as a reporter for local newspapers in Michigan.
Looking for a unique approach to manufactured home lending? To learn more, stop by booths 318 and 320 at the MHI Congress & Expo, or contact us at MHInfo@CreditHuman.com
Equal Housing Lender Federally Insured by NCUA NMLS# 486243
30 | MHINSIDER™ • MAY / JUNE 2019 • MHINSIDER.COM
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MHI CONGRESS & EXPO
May 6 – 8, 2019
Hyatt Regency New Orleans New Orleans, LA
Co n
gr es sA
nd
Ex
po .co m
MHI CONGRESS & EXPO
Photo courtesy of Zack Smith
2019 Congress & Expo Features Top Speakers, Education
T
he 2019 MHI Congress & Expo will be held in New Orleans at the Hyatt Regency, May 6-8. Make sure to join the Manufactured Housing Institute for the top industry event of the year. This annual event and premier trade show caters to more than 1,200 individuals in the manufactured housing industry, including home builders, retailers, community operators, lenders and suppliers. Congress & Expo offers three days of impactful education, with time to connect to some of the most successful professionals in the industry. Attendees will be able to immerse themselves in top-quality educational workshops, an expo floor with over 120 booths, networking receptions, and pre-event forums focused on existing manufactured home communities and developing with manufactured homes. The 2019 Excellence in Manufactured Housing awards will be awarded on Tuesday, May 7. Visit www.congressandexpo.com for more information and to register.
Keynote Speaker
Join Keynote Speaker Bill Rancic during the opening session on Tuesday, May 7, at 9 a.m. Rancic won the first season of NBC’s “The Apprentice”, led by now-President Donald Trump. After winning “The Apprentice”, Rancic was hired by The Trump Organization and took charge of the construction of the Trump International Hotel and Tower Chicago. Rancic continued to work for Trump and The Trump Organization for two years, in addition to building several winning businesses on his own.
Today, Rancic is a motivational speaker on the subject of entrepreneurship and business. He shares his entertaining lessons, which vary from a pancake business he started with his grandmother at age 10 to his current ventures as small-business spokesman, restaurant owner and real estate developer.
Retailer Roundtable
New for 2019, the Retailer Roundtable on Wednesday, May 8, offers participants a day of content geared specifically toward manufactured home sales centers. Topics will include: • Fannie Mae and Freddie Mac discussing their financing programs for the New Class of manufactured homes • Chattel financing options • Marketing tips • Federal advocacy issues Each topic is tailored to retailers, who serve as the face of the manufactured housing industry. We encourage retailers to join other attendees for a networking reception the evening of May 7, along with the Expo Hall and additional events the morning of May 8. S e p a r a t e r e g i s t r a t ion i s r e quired. Registration starts at $180 for M HI members and $24 0 for non-members. For questions, email registration@mfghome.org.
Developing with Manufactured Housing Seminar
This day-long seminar on Monday, May 6, is designed specifically to address the needs of builders and developers who want to utilize factory-built housing to save time, money and to provide innovative, affordable options to homebuyers. A wide spectrum of factory-built housing
34 | MHINSIDER™ • MAY / JUNE 2019 • MHINSIDER.COM
and development types will be explored. At the end of the seminar, attendees will be given the opportunity to review project plans or receive expert advice from the seminar faculty.
NCC Spring Forum
The National Communities Council Spring Forum is a day-long seminar on Monday, May 6, specifically designed around manufactured home community owners and operators. With an emphasis on providing practical solutions and take-home value, it provides informative content to address the needs of community owner/operators of all sizes. The NCC Spring Forum keynote speaker will be John McLaren, president and COO of Sun Communities. McLaren has over 24 years of experience in financial and real estate public companies. As president of Sun Communities, he has been actively involved in the management, acquisition, construction, and development of manufactured housing communities and recreational vehicle resorts, as well as home sales and leasing operations within communities and resorts.
15th Annual Golf Open
Kick-off Congress & Expo with a superior networking opportunity on Sunday, May 5, at the 15th Annual Oliver Technologies Golf Open at the South Course at Bayou Oaks. With a rich tradition of building camaraderie and contacts amid lush landscapes, this tournament also supports MHI’s political outreach on behalf of manufactured and modular housing. Join the 1:30 p.m. shotgun start/scramble format at the premier golf course
MHI CONGRESS & EXPO
2019 Congress & Expo Schedule of Events 10:30 a.m. to 11:30 a.m.
Sunday, May 5
Educational Workshops
9 a.m. to noon in New Orleans, located in historic City Park. Designed by renowned golf course architect Rees Jones, the par-72 layout accommodates players of all skill levels. Enjoy an afternoon that includes round-trip shuttle transportation from the Hyatt Regency, green and cart fees, box lunches, beverages, cash prizes, gifts, and a chance to win $10,000 in the Hole-in-One contest.
3rd Annual Clay Shoot
Maximize your networking during an exciting morning of shooting sporting clays. Join industry leaders on Sunday, May 5, from 9 a.m.-noon at the 3rd Annual Hart King/Lutz, Bobo & Telfair Clay Shoot, at the High Point Shooting Grounds in Belle Chasse. Both beginners and experienced shooters will enjoy the expansive outdoor facility while strengthening business relationships at this popular event that benefits industry advocacy. All-inclusive registration fee includes round-trip shuttle transportation from the Hyatt Regency, continental breakfast, range safety supervision, 100 clays per person, shotgun rental and ammunition.
Travel
Parking at the Hyatt. The Hyatt
Regency offers valet and self-parking options. Overnight valet parking is available for $40 per night and self-parking is available for $25 every 24 hours. The platinum parking garage is attached to the Hyatt. Airport. New Orleans is centrally accessible via the Louis Armstrong New Orleans International Airport (MSY). The Hyatt Regency is 15 miles from the airport.
11:45 a.m. to 1:15 p.m.
3rd Annual Hart King/Lutz, Bobo & Telfair Clay Shoot
Excellence in Manufactured Housing Awards Luncheon
1:30 p.m.
15th Annual Oliver Technologies Golf Open
1:15 p.m. to 6:30 p.m. Expo Hall Open
1:15 p.m. to 3:30 p.m.
Afternoon Refreshments with Exhibitors
Monday, May 6 7 a.m. to 7 p.m.
1:45 p.m. to 3 p.m.
Registration Desk Open
Educational Workshops
8 a.m. to 5 p.m.
3 p.m. to 4:15 p.m.
2019 MHI-NCC Spring Forum
Educational Workshops
8-9 a.m.
4:30 p.m. to 6:30 p.m.
NCC Forum Coffee Hour
Networking Reception in Expo Hall
9 a.m.-5 p.m.
NCC Spring Forum Sessions
Wednesday, May 8
8:30 a.m. to 5:30 p.m.
7:30 a.m. to 11 a.m.
Developing with Manufactured Housing Seminar
Registration Desk Open
8:30-9 a.m.
8 a.m. to 4:30 p.m.
9 a.m.-5:30 p.m.
8 a.m. to noon
8 a.m. to 4 p.m.
8 a.m. to 8:30 a.m.
4:30 p.m. to 5:30 p.m.
9 a.m. to 11 a.m.
5:30 p.m. to 7 p.m.
8:45 a.m. to 9:45 a.m.
Retailer Roundtable
Coffee “Meet and Greet”
Expo Hall Open
Developer Seminar Sessions
Continental Breakfast in Expo Hall
Exhibitor Move-In Newcomers Networking Reception Welcome Reception in Expo Hall
Morning Coffee in Expo Hall Educational Workshops
10 a.m. to 10:45 a.m.
Closing General Session
Tuesday, May 7
12:00 p.m.
7:30 a.m. to 6:30 p.m.
Expo Hall Closes
Registration Desk Open
8 a.m. to 11:45 a.m.
Expo Hall Hours
8 a.m. to 8:45 a.m.
Monday, May 6
Expo Hall Open
5:30 p.m. to 7 p.m.
Continental Breakfast with Exhibitors
9 a.m. to 10:15 a.m.
Tuesday, May 7
Welcome and Opening Session
10:15 a.m. to 11:30 a.m.
Morning Coffee with Exhibitors
8 a.m. to 11:45 a.m. 1:15 p.m. to 6:30 p.m.
Wednesday, May 8 8 a.m. to noon
MHINSIDER.COM • MAY / JUNE 2019 • MHINSIDER™ |
35
MHI CONGRESS & EXPO
Ensuring MH is Part of Federal Efforts to Address the Affordable Housing Shortage By Dr. Lesli Gooch
T
hroughout the 2018 election cycle, the issue of affordable housing was echoed in races across the country. The Manufactured Housing Institute (MHI), the national advocate for the manufactured housing industry, has been on Capitol Hill to meet the members of the 116th Congress and help them understand how manufactured housing can address the affordable housing challenges they heard about on the campaign trail. Through our consistent presence on Capitol Hill and cultivation of strong bipartisan relationships, we are working to ensure that manufactured housing
is part of the national dialogue about ways to address the nation’s affordable housing shortage. Manufactured homes are already helping millions of Americans who otherwise would not be able to afford a home, and there is great potential for manufactured homes to play a larger role in helping solve the shortage of affordable housing options. Through MHI’s advocacy efforts, we are ensuring policymakers embrace the quality and desirability of manufactured housing and support our industry’s growth. And we are letting them know how much people love living in today’s
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manufactured housing. MHI’s extensive independent research of manufactured housing residents in 2018 shows a high level of satisfaction regarding the decision to live in a manufactured home. Both renters and owners are happy living in manufactured homes and cite affordability as the top reason they chose manufactured housing. Two-thirds of residents are satisfied with their manufactured homes and are likely to recommend this form of housing to others. MHI has worked to ensure that the manufactured housing industry’s priorities are well-positioned in the 116th
MHI CONGRESS & EXPO
Congress, and has secured champions with your elected officials impactful, across government so that federal rules interesting and rewarding. and regulations support the industry’s To participate in our “Calls to Action”, efforts to provide quality homes at visit MHI’s advocacy page at www. affordable prices. We are working on a ManufacturedHousing.org, and click number of federal policy fronts to move on “Advocacy and Issues.” the industry forward, including working With MHI’s advocacy page, we make to improve the supply of financing contacting your U.S senators and for manufactured housing; ensuring representatives easy. It only takes a few the HUD Code is up-to-date, cost-effective and encourages innovation; advocating for manufactured housing across federal agencies; and making sure that Congress and federal officials are aware of the benefits of manufactured housing. MHI’s access to Washington policymakers is as strong as ever, and we have an excellent message that answers the – Dr. Lesli Gooch, MHI housing affordability concerns that they are hearing about. We plan simple clicks for your voice to be heard. to continue our constant and compreMHI composes the letter for you, which hensive efforts with Congress and the you can edit as needed. All you have to presidential administration on behalf do is insert your contact information of the industry. and click “Submit”. We have also found that direct enOn June 11, MHI members from across gagement from MHI members to their the nation will have the opportunity to elected representatives and federal agenvisit Capitol Hill to meet with their U.S. cies is an important part of our advocacy senators and representatives in person efforts. Members of Congress and senior to discuss the benefits of manufactured staff members rate direct outreach from Photo courtesy of Champion Homes a constituent to be extremely compelling in determining whether to take action on an issue. There is strength in numbers, and the impact that MHI’s members have by serving as an industry voice in front of their elected officials is critical. We ask that you help us continue the positive momentum for manufactured housing by continuing to participate in our “Call to Action” efforts going forward. As a constituent, your voice can help to make sure our advocacy is as effective as possible. Effective advocacy is a partnership, and MHI strives to provide you with the resources you need to feel comfortable reaching out to your elected officials. We believe you will find the experience of engaging
"There is great potential for manufactured homes to play a larger role in helping solve the shortage of affordable housing options."
housing. The power of in-person meetings with members of Congress cannot be overstated, and are an exceptionally impactful component of MHI’s comprehensive and highly successful advocacy approach. We hope that you will join us for our 2019 Legislative Fly-In. Through a consistent presence on Capitol Hill and cultivation of strong bipartisan relationships, MHI has positioned the industry to build on our previous progress and will work to ensure that manufactured housing is a key part of Congress’ work to address the nation’s affordable housing shortage. Because MHI’s approach has always been to build strong relationships across the political spectrum, and thanks to the efforts of our members, we are confident manufactured housing will remain a part of the affordable housing and housing finance discussions that are likely to come. MHV Lesli Gooch is M H I’s e xecut ive vice president and chief lobbyist.
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MHI CONGRESS & EXPO
"Community managers continue to play a critical role in the success of all manufactured home communities." – Lee Krinzman, MHI
MHI CONGRESS & EXPO
MHI Offering Online Courses for Community Managers By Lee Krinzman
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he Manufactured Housing Institute, through its educational branch, The Manufactured Housing Educational Institute, is proud to offer professional education and training programs for community managers. This accreditation is nationally known as the Accredited Community Manager (ACM®) online. In a world where almost everything can be done virtually from the comfort of your own home or office, you can now access the newly revised ACM curriculum online. As the manufactured housing industry continues to grow, so does the need to educate its workers. Community managers continue to play a critical role in the success of all manufactured home communities. The individuals who manage a manufactured home community have many duties — from collecting rents, handling the property, hiring personnel, marketing and much more. A trained and educated community manager is key to a well-run property with satisfied residents. Owners and operators of manufactured home communities — whether they are sole proprietors, limited liability corporations, partnerships, corporate entities, real estate holding companies, or Real Estate Investment Trusts — will always need capable, skilled and knowledgeable community managers to continue their success. The Accredited Community Manager program has been designed and revamped to ensure community managers are current with industry trends, understand federal laws impacting communities, deliver a profit to the owners and perform to the highest standard of the industry. The ACM training is delivered in two courses, and those who successfully complete both courses and exams will receive their ACM designation.
The first of two courses, titled “Course 1: Professional Community Management”, covers topics such as: • Overview of Property Management • Setting Community Management Policies • Market Issues, Leasing Homes/Home Sales • Resident Relations and Resident Policies • Communications • Rent Payments/Collections/Increases • Maintenance • Personnel Policies/Procedures • Federal Laws
The second course, titled “Course 2: Advanced Community Management”, covers topics such as: • Budget Process • Analyzing the Community Financially • Insurance • Taxes/Assessment • The Physical Asset • The Operations Manual During the final portion of Course 2, all students will be required to delve into their own community, addressing one of the areas discussed in training where their community could be improved. Once the area is picked, the student must then present an applicable “fix”, including potential personnel needs, cost estimates and an implementation plan. The hands-on approach allows students the ability to address change in their community. Join us online today to earn your ACM designation. Courses start at $250. For more information, visit www.manufacturedhousing. org/acm/. MHV Lee Krinzman, MPA, is MHI’s director of education.
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MHI CONGRESS & EXPO
Photo courtesy of Brand USA
Big Easy Too Much Fun
The Has to Choose From By Matt Milkovich
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he problem with New Orleans is that there’s too much to do. Too many good restaurants. Too much great music. Too many interesting activities. A smorgasbord of history and culture. But if you plan to be in New Orleans May 6-8 for the 2019 MHI Congress & Expo, you probably plan to step out of the hotel whenever you get a free moment to experience what NOLA has to offer. If that indeed is your plan, you’ll have much to choose from. Probably too much. MHInsider will attempt to help you by highlighting a handful of experiences. For a fuller picture, visit the MHI expo’s “Visiting New Orleans” page at www.congressandexpo.com/visit-new-orleans, or the city’s tourism website, www.neworleans.com. The expo’s host hotel, the Hyatt Regency New Orleans, is located in the city’s Central Business District, about a mile from the French Quarter. Here are some suggestions for food and activities within a reasonable distance of the hotel (with descriptions from www.neworleans.com).
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Photo courtesy of Zack Smith
MHI CONGRESS & EXPO
MHI expo attendees won’t want for entertainment in New Orleans. The city has virtually an unending supply of restaurants, music venues, and historical and cultural activities.
Food
Photo courtesy of Paul Broussard
Willa Jean. The modern elegance of the dining room lends charm to this haven of Southern-inspired dishes, and sets the stage for the nostalgic nature of the ever-evolving menu. 611 O'Keefe Ave., New Orleans, LA 70113 (504) 509-7334 Johnny Sanchez. A smart and authentic restaurant that embodies the warmth of traditional Mexican cooking and the hospitality that defines New Orleans. 930 Poydras St., New Orleans, LA 70112 (504) 304-6615 Reginelli’s Pizzeria. See why the locals call Reginelli’s the perfect pizza. The diverse menu includes seasonal salads, house-made focaccia sandwiches, rich pastas and more. 930 Poydras St., New Orleans, LA 70112 (504) 586-0068
Maypop Restaurant. Southeast Asian meets Southeast Louisiana cuisine. The menu changes seasonally and is paired with an equally exciting wine and cocktail list, all set in a hip metropolitan dining room. 611 O'Keefe Ave., Suite C2, New Orleans, LA 70113 (504) 518-6345 The Company Burger. The philosophy at Company Burger is basic: serve the classic American cheeseburger with homemade, fresh ingredients. This uptown eatery has become a neighborhood favorite. 4600 Freret St., New Orleans, LA 70115 (504) 267-0320
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MHI CONGRESS & EXPO
Photo courtesy of Zeman Homes
MHI CEO, President Richard “Dick” Jennison to Step Down at Year’s End By Patrick Revere
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ichard “Dick” Jennison, who has spent eight years at the helm of the Manufactured Housing Institute (MHI), will retire from his post as CEO and president at the end of 2019. “There’s a point in one’s life where you want someone to take it to the next level, and I think we have excellent people in the industry to do that,” Jennison said about his retirement plans. “This decision was my decision. I’ve worked with MHI’s executive committee on the transition, and we've put together a succession plan to help smooth that transition. “I will be 68 in July, and it’s time for me to turn over leadership to others in the organization and the industry,” he said. MHI has organized a search committee to undergo the process of finding and interviewing candidates for the organization’s leadership role. Joe Stegmayer, chairman of the board for MHI, announced the pending change during the MHI Winter Meeting in Austin. Stegmayer, too, will step down from his board leadership role at the end of the year.
Stegmayer was quick to note “the great progress MHI made” during Jennison’s tenure. Among the organizational and industry achievements since 2011, when Jennison became CEO, Stegmayer pointed to the following: • E nhanced member experience, improved event qua l it y, a nd prominent speakers such as HUD Secretary Ben Carson • Significant elevation of the industry before Congress and federal agencies, including accomplishment of numerous legislative victories and regulatory relief • Strengthened outreach across the country and improved communications with state associations and their leaders • Increased dissemination of knowledge-based materials for members to stay up-to-date and to assist them in their business • MHI’s strong financial position due to membership growth in all categories and diligent budgeting; reserves of
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nearly $4 million, assuring the longterm stability of MHI • Q u a d r u p l i n g of M H I - PAC ’s bipartisan contributions • Groundbreaking strategic research initiatives, including identifying consumer segments where growth potential exists, and driving the concept of the “new Class home” from the initial research stage to reality “I think we’ve done a great job, and none of this could have been accomplished by myself,” Jennison said. “It’s the board and the staff and the members... That’s what makes MHI a success. “They all work hand in hand,” Jennison said of his team. “From my perspective, having a part in the financial side, it was of great importance to get on more stable footing. We worked hard to grow the reserves, and that’s planning for the future. A downturn will come at some point, and being ready for that is what’s most important.” MHI asks industry professionals who would like to provide input on the
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MHI CONGRESS & EXPO
Activities
From Sea to Shining Sea: 200 Years of American Art.
Artwork spanning the first two centuries of America’s rich history, highlighting the variety and strength of American artistic achievement from the colonial era through World War I. M.S. Rau Antiques 630 Royal Street, New Orleans, LA 70130 (504) 273-7391
Let’s Roam New Orleans Ghost Tour. A tour providing access to the most historically haunted parts of the French Quarter. 514 Chartres St., New Orleans, LA 70130 (833) 202-7626
leadership search to email the committee at MHISearch@mfghome.org. Previous to his tenure with MHI, Jennison was president of the Brick Industry Association for eight years, starting in 2002. “This job is pretty demanding. We put in 10-, 12-hour days, and I can’t keep pace with the staff anymore,” Jennison said with a chuckle. “I certainly will be looking at things that interest me, but I’m not retiring to take another full-time job.” Jennison said he is pleased to have played a part in improving the regulatory environment for manufactured housing, as well as being able to exit the industry at a time when manufactured housing is viewed widely as a viable solution to the nation’s housing needs. “Manufactured housing certainly can provide solutions to housing needs that site-built homes cannot,” he said. “That has been and continues to be the goal.” MHV FOR MORE INDUSTRY NEWS, VISIT
WWW.MHINSIDER.COM
Tipitina’s. Tip's has played host to NOLA music legends since opening its doors in 1977. Dr. John, the Neville Brothers and Trombone Shorty have all graced the stage at this excellent, standing-room-only venue. 501 Napoleon Ave., New Orleans, LA 70115 (504) 895-8477 We Love You, New Orleans. Celebrate NOLA's 300th birthday with a visit to this exhibit, which features over 100 artifacts that highlight the city’s unique architecture, food and drink, music, nightlife and more. The Cabildo 701 Chartres St., Jackson Square, New Orleans, LA 70116 (800) 568-6968 Comedy Gold. This is your chance to see some hilarious comedy for free. Hosted by Leon Blanda at the House of Blues every Wednesday at 8 p.m. Doors open at 7 p.m. House of Blues 225 Decatur St., New Orleans, LA 70130 (504) 310-4999 Wednesday at the Square Concert Series. Free outdoor concerts at Lafayette Square by well-known local artists. Concerts start at 5 p.m. and last until 8 p.m. On May 8, the scheduled artist is Cyril Neville's Swampfunk with Miss Mojo. Lafayette Square Park S Maestri St., New Orleans, LA 70130 (504) 585-1500 MHINSIDER.COM • MAY / JUNE 2019 • MHINSIDER™ |
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2-10 Home Buyers Warranty Awards Home Builders By Matt Milkovich
“It’s an impeccable achievement to reach such a high level of customer satisfaction on a product that is built to certain, universal standards. To maintain that consistency and integrity across the board is exceptional.” – Ron D’Ambra, 2-10 HBW
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hree manufacturers were awarded for excellence by 2-10 Home Buyers Warranty during the Louisville Manufactured Housing Show in January. Ron D’Ambra, 2-10’s national manufactured/modular housing manager, presented Champion Home Builders and The Commodore Corp. with a Platinum Builder Award, part of his company’s 2018 Builder Achievement Awards Program. “The Platinum Builder Award recognizes accomplished builders who demonstrate leadership in new construction with innovations in design, marketing strategy and construction technology,” D’A mbra told the builders. “We recognize you as a distinguished builder in the industry and admire your skilled
From left, Chris Parker, Kaitlyn Palatucci, Rick Robinson, Wally Comer, Rich Rice, Susan Pogue, Glenn Findley, and Ron D’Ambra.
workmanship and dedication to constructing quality homes. “It’s an exceptional achievement for a manufacturer,” D’Ambra said. “It confirms they’re building a quality product.” D’Ambra gave Adventure Homes a special award for its 10-year anniversary as a builder of manufactured homes, and for being named Manufacturer of the Year for three years straight by the Manufactured Housing Institute. “These are three unique manufacturers,” he said. “It’s an impeccable achievement to reach such a high level of customer satisfaction on a product that is built to certain, universal standards. To maintain that consistency and integrity across the board is exceptional.” MHV
From left, Ron D’Ambra, Bob Bender, Don Strick, Barry Shein, Glenn Findley, and Chris Parker.
From left, Glenn Findley, Keith Anderson, Byron Stroud, Ron D’Ambra, and Chris Parker.
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BUILDER / RETAILER
Watch out
Wall Street
BUILDER / RETAILER
Legacy Housing's Kenny Shipley is all West Texas By Patrick Revere Photos courtesy of Legacy Housing
K
enny Shipley, co-founder and CEO of Legacy Housing, watched the Bedford, Texas, company he started in 2005 with Executive Chairman Curtis Hodgson go public (LEGH) in early 2019. Some might say it’s a long road from West Texas to Wall Street. They have no idea. That trip will take 24 hours
of highway driving, if it’s all about the destination. But, if you’re Kenny Shipley, it’s about the process. It’s about trust. It’s about doing the right thing, with a “burn in your belly”. And if that’s the route you take, the travel from West Texas to Wall Street takes 14 years or more. Maybe a lifetime, if you ask Kenny. continued on next page
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BUILDER / RETAILER continued from previous page
Let’s Start with the ‘World Famous Pecos Cantaloupe’
Shipley has done quite a few things in his life, including sell plenty of homes. Before there were homes to sell, there was a ripe West Texas melon travelers would take a U-turn to obtain. Shipley and his brothers, Billy and Doug, would make the three-hour ride to Pecos, Texas, for no other reason than to load up on whole, locally grown fresh cantaloupe. It’s a sensitive crop, and timing was everything, he said. “In Pecos, it’s such a dry, sandy heat, and they just grow so sweet,” Shipley explains, as if he’s tasting a cantaloupe in the very moment he’s talking about it. “They are delicious, and you can see it. They’re bright orange. “You needed to pick them at just the right time. Not too early, and you can’t keep ’em on the vine in the heat. We had it down.” The sign they rigged up on route 114 to Lubbock read “Pecos Cantaloupe. World Famous”. They’d sell them out of the back of the truck. Then, in the heat of the day or when restlessness took over, the trio and whatever friends they could recruit would take the melons
to local markets. Shipley would even take the juicy treasures door-to-door throughout his hometown of Levelland, population 8,000 at the time, 30 miles west from Lubbock. “I’d take a cut of cantaloupe door-todoor,” Shipley said. “‘Taste this, they’re world famous’. People would say, ‘Man that’s good’. We’d sell two for a dollar.
“My dad taught us how to be entrepreneurs, and we were always hustling.” – Kenny Shipley, Legacy Housing
We’d load up that truck from Pecos for six cents a pound, so we did OK.”
‘Everything We Got, We Worked For’
“My dad taught us how to be entrepreneurs, and we were always hustling,” Shipley said of he and his siblings. He said not one of them has ever filled out a W-2 in their lives. They worked for themselves,
Legacy Housing co-founders Curtis Hodgson and Kenny Shipley with former Dallas Cowboys defensive tackle Randy White, center, who was a spokesman for Legacy for several years.
they worked hard, and they made money. “We ran gasoline stations for a bit when we were right out of high school,” he said. “We’d buy used batteries for $1, and put them all on a train charger. It charges 10 batteries at a time,” he said. “We’d charge them for a couple hours and see if any of them held a charge, and spray them and clean them up to look like new. We’d sell the good ones for $19.95, and the others we’d sell for junk at $5.” They’d also buy imported wristwatches for $1.75 and sell at the gas station for $20. Like anything else, you’d keep some of the profit and put the rest back in the business. Or another business, whatever made sense. Their father was in the ca r business, so Kenny and his brothers always had a few lessons to lean on as they built their own ventures. “We didn’t have a lot, but it could have been a lot worse,” he said. The Shipleys moved to Levelland from a town that was just a little smaller. He said West Texas was a fun place to grow up, a safe place where kids could be kids.
BUILDER / RETAILER
“We had two pool halls, a roller rink, two movie theaters, a drive-up theater, two city swimming pools... You knew everyone in the area, and we always would hang out in our garage because we had a pool table,” Shipley said. “We didn’t have a door key for our house. We’d go out of town for three or four days and just leave it open. It was that kind of town.” T he y ’ d h av e fo ot b a l l g a me s with 25 people on each side. They rode bicycles everywhere. “Of course, there were no computers or video games, so if you wanted to have fun you had to go outside. And I’m grateful for that,” Shipley said.
A welder prepares the support frame and chassis for a new Legacy home. Below, Legacy Housing builds its own roof trusses at its factory in Fort Worth, Texas.
When It Comes to Housing
Shipley and his brothers had been dabbling in manufactured housing for a few years at the time they went in together and started a retail business. Bell Mobile Homes in Levelland has been operating for 38 years now. “When I got in, the industry was moving 300,000 homes, and interest rates were 23 percent,” Shipley said. “I was doing 23 percent loans through GE Credit.” But times would change, and fast, particularly in West Texas. Shipley and Hodgson crossed paths in the mid-’80s. They were both buying repossessed homes and selling them, including to other retailers.
The manufactured housing business was downtrending from the peak years of the 1970s. To further distress the Texas market, oil by the barrel was way down, to $8 per barrel in the mid-’70s. There was a massive effect on the labor market, which particularly affected housing. Banks went under in droves. Any area MH financing was in operation was east of Interstate 35.
“West Texas was cut off,” Shipley said. “There were no finance companies doing business west of I-35. “For us to survive, we would get bank financing or sell ’em for cash. I met Curt (Hodgson), and we were competing for many houses,” he said. “One day we kind of started buying and selling to each other, and we slowly started partnering up on a pile of houses.” continued on next page
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BUILDER / RETAILER continued from previous page
Hodgson was in retail and running auctions, and Shipley would enter his homes in the auction. They ran that way for two decades, working hard and making ends meet.
“We didn’t even have a contract or official partnership, not until we started Legacy,” Shipley said. “That was the first time we signed anything. We had bought a Cavalier plant. We were already buying inventory at that point. Floorplanning A Little Bit Closer inventory, that’s how we got started. to Wall Street “We had 40 guys doing business with The pair had purchased and sold us,” he added. “They had sales centers, enough homes, and built enough and they believed in us. Then we started relationships, that eventually the two building homes, too.” entrepreneurs came around to talking Initially, the pair wanted to keep the about building their own homes. homes “low end”. The idea was to keep them basic to build and simple to sell. They had one 16x60’ floor plan they “I truly believe we’ve put more built for the first 90 days. Then they added in a people in business than any16x80’ that brought them one else. We’re always going out to about six months in business. After that, to support independent dealthey started building and selling double wides. ers. Those are the guys we “We built it organically,” Shipley said. want to do business with,” “We build our own roof trusses, we laminate our – Kenny Shipley, Legacy Housing Sheetrock. We profile our trim. We’ve done a good job of taking the They had the experience, the work middlemen out of what we do. And ethic and enough capital resources to we’ve had to do that to compete with make it happen. They only needed to the big boys. We go to China to do our formalize a plan. own importing. Our product is the same
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product, because we were already buying from China, we just cut the middleman out who was taking 25-30 percent.” The pair, and their team, which now numbers more than 800 employees, built the business up well enough and continue to have strong enough confidence in their product to have started their own retail finance program. “We’re not the answer to everyone’s prayers, so there’s still that need for the other lenders, but we have our niche,” Shipley said. “We build the widest floor, the highest roof. We deliver the most bang for the buck for the consumer, kind of like that Pecos cantaloupe.”
Focus on the Best Product, and Build a Network
As much as he loves building homes, Shipley still has a soft spot for the retail end of the business: the independent retailer, the entrepreneur. “It’s a gamble every day when you wake up and have no idea where your dollar is coming from. That’s the case with our network, from Colorado to Kansas to Florida,” he said. “We love the independent guys. That’s what built America.” Shipley said he and Hodgson agree, they cannot think of any two industry professionals who have created more business through setting up independent dealers. Legacy currently operates
BUILDER / RETAILER
Legacy Housing now employs about 800 people, including the corporate team in Bedford, Texas, pictured above.
through an independent dealer network of better than 100 retailers. “I truly believe we’ve put more people in business than anyone else. We’re always going to support independent dealers. Those are the guys we want to do business with,” he said. “Anyone can have a sales center and make money. You need to have that burn in your belly. If you don’t, you probably can’t, but if you have that dream and the burn in your belly, you’re going to do it.”
Where Ya Headed?
Shipley and others at Legacy Housing are asked quite often if the manufactured housing industry can reach its peak sales volume again. More than 400,000 homes shipped in a year? That’s more than quadruple the current production, in an industry already on an assertive upward trajectory. “I don’t think so,” Shipley says, hesitantly. “Too many independents left, and not too many are getting back into it. There are no families getting in, and of course there are families aging out.” True, the housing crisis and credit crunch pushed droves of traditional retailers out of business. Which leaves factories with fewer places to send homes and buyers with less obvious places to shop. Much of the sales recovery in the industry has come through community operators that now sell homes as well.
Take note, though, Shipley still hands out his business card. “I can help” is what it says, right beside his cellphone number. In the meantime, Legacy is pleased to build its own business, and continue its own, well, legacy.
If Not by Road, Then By Air (or Heir)
Kenny Shipley’s always working. Checking on retailers. Walking the floor. Responding to sometimes 80 phone calls a day. But he still lives in Levelland, now population 13,000 or so. It’s 275 miles by air to the original factory in Fort Worth. “I’m a pilot,” Shipley states. He has been flying since the age of 17; earned his license at about 20 years old. He took a long number of years off when his children were young, but bought an airplane in the mid-’90s. He’s been flying to the plant two, three times a week ever since. “We both f ly a Meridian jet prop,” Shipley said of he and Hodgson. “His is blue, mine’s red.” They’re personal planes, Shipley’s quick to point out. The company didn’t buy them. They’ve always kept a low profile, he said, and particularly so now.
LEGACY HOUSING STATS
• Went public in February 2019 • Has three manufacturing facilities, including its original in Fort Worth • Is the fourth largest builder of manufactured homes in the U.S. • Offers customers 70 floor plans, including tiny homes • Delivers to 14 states from the Southwest to Southeast
“We’re working with shareholder money now, and we consider our shareholders as partners,” he said. “We’re going to treat their money like it’s our money. We’re not going to be frivolous.” Kenny’s son, Ken, followed him into the family business. Ken started at age 16 in the setup department. A decade later he leads sales. “He’s a better salesman than I was,” Shipley admitted. “He’s a natural.” Now that’s a legacy. MHV
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BUILDER / RETAILER
By Donald Westphal
Question : Is it time for a
community makeover?
O
ne of the most difficult issues facing the manufactured housing industry today is the presence of many older, unattractive land-lease communities on the nation's landscape. Upgrading and improving these communities is important for several reasons. From an industry perspective, the negative impact that these communities have on efforts to rezone land for future projects is legendary. The "trailer park" image of some of these older communities is often the biggest argument against proposed modern community developments. From an investor perspective, many of these older developments are losing value because of their inability to accommodate newer, larger homes and the negative image created by the aging asset. So, how do we go about making a change for the better in these older communities? The first (Level 1) step in the process is deciding the extent of the makeover. The activity could be as simple as a cosmetic enhancement of the existing facility or as complex as a complete retrofit — requiring the removal of the existing homes and a planned redo
of the community and infrastructure to accommodate newer, larger homes. This initial decision will determine the course of the actions to follow. For decades, our firm has prepared upgrade documents for many projects, large and small, across the country. All of the projects have begun with a thorough assessment of the community. The first step in the process is the accumulation of the most complete maps and information on the community possible. In many cases, this involves digging deep into office closets, calls to the design engineer or planner or trips to the municipal or state agency to acquire archived copies of the approved construction plans. Conversations with managers and maintenance personnel further complete the base plans. Often, when drawings aren't available, enlarged aerial photographs acquired from government sources are utilized to create base maps. Thorough site inspection and verification completes the process.
grown to accept, and can save additional trips to the site to refresh our memory of forgotten details. Maps, pictures and notes not only provide a valuable resource in times of community crisis and a foundation for the work to follow, they also become a base against which to measure our future progress. It is unlikely that the community image would decline through time without the images of the homes and home-sites declining. It is helpful, therefore, to consider the need for community renewal on two levels: items of owner/ management responsibility and items of resident responsibility. With this in mind, create an upgrade plan with an emphasis on short-term goals to produce immediate visual results and long-term goals to achieve the desired end result. In this way, management’s example of immediate visual improvement can be used as justification for required resident home and site improvements. You must lead by example if you are to be successful in this effort.
A Picture is Worth a Thousand Words
Level II Renewals
Walk the site with camera and notepad in hand. Pictures have a way of focusing our vision on negative images we have
Now that we’ve discussed Level I renewals, let’s move into something a little more involved: Level II renewals.
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BUILDER / RETAILER
Level II candidates are older communities than most Level I renewals, and, as a result, have a higher percentage of older homes. Many have serious age-related difficulties with the homes and homesite improvements. Some of the older homes have been acquired by the community owner and are rented. Many Level II communities have vacant sites to lease. As a result, a Level I renewal is a required first step in the upgrade process. Since upgrading of the housing stock and homesites is so important to the process, resident cooperation and acceptance of the program is essential. Just as research was important to the upgrade process for the community-owned items, it is also important to do proper research to upgrade the home stock and homesites. The first step in the process is to inventory the homesites and determine, in accordance with local and state regulations, the maximum-size homes that can be accommodated on the existing home sites. In making that determination, information regarding regulations for separation and lot coverage is important. Many states allow older communities to apply the requirements that were in force when the community was first constructed to be applied, rather than current requirements. This can make a big difference in the size of home that can be placed on a given lot and the amount
of change that might be necessitated if the current standards were to apply. The next step in the research process is to inventory the age, size, and condition of each home in the community; which homes are renter occupied, if any, and which homesites are vacant. This information can be placed on a spreadsheet and color-coded on a plan. Unlike the Level I upgrade, which can take place in a relatively short time, upgrading the home stock most often takes longer. Planning for the home stock upgrade takes considerable effort and creativity. One method of accomplishing this task is to review the research information in order to determine which homes can remain in the community in their present location, which homes might be acceptable if moved to a new location, which homes should be removed from the community, and which homesites are vacant. The goal of this process is to begin, one section of the community at a time, to improve the home stock. The first section to be upgraded should be the most visible location, as a way to produce an early improvement and stimulate interest in the process. For example, it might be determined that an area near the entrance has several vacant sites, some newer homes that would remain, and two or three homes that should be removed
from the community or relocated to a less visible location. First, arrangements would be made to assist the residents in the least desirable homes to either relocate their homes or move up to a newer home. At the same time, new or acceptable replacement homes would be placed on vacant sites in the area and offered for sale. Special incentives can be offered to encourage existing residents to "move up" and to entice new residents to move into the community. A marketing effort keying in on the Level I portion of the community renewal program and the home sale incentives could be initiated. This process, over time, would result in the phased upgrade of the whole community home stock. Such efforts could be part of a much-publicized, total-community "Grand Reopening"; or part of a quiet, metered effort over time. Level II renewals, properly executed, improve the asset class of the community, reduce vacancies, and improve resident relations and profitability. MHV Donald Westphal, RLA, ASLA, is principal at Donald C. Westphal Associates LLC , a landscape architecture and site planning company.
PROPERTY MANAGEMENT.
IT’S SIMPLE, WE MANAGE YOUR COMMUNITY LIKE WE WOULD OUR OWN, FOCUSING ON CREATING VALUE. With over 35 years’ experience and as one of the largest private owner-operators of communities in the country today, M. Shapiro Real Estate Group is a proven leader in the manufactured housing industry. Let us show you how we can create value for your community. We currently manage over 10,000 mobile home pads via third party management. • Customized accounting packages. • Hundreds of homes sold in 2018 generating over 6mm in sales revenue.
• Licensed to do business in 26 states. • We manage communities as small as 30 pads and as large as 1,100 pads. • Multi-State MH Association Member. • Winner of the Clayton Homes Platinum Builder Award with Home Sales over $4,400,000 in 2018. Contact us today to learn more.
Call Kim Scott - Director (MH Operations and Sales) at 248-865-0066 | www.mshapirorealestate.com MHINSIDER.COM • MAY / JUNE 2019 • MHINSIDER™ |
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MICHIGAN Sets Standard for Modular Infill in Urban Areas 56 | MHINSIDER™ • MAY / JUNE 2019 • MHINSIDER.COM
BUILDER / RETAILER
Vacated City Parcels Get New Life, Potential Homebuyers Get Affordable Options By Patrick Revere and Matt Milkovich Photos courtesy of Champion Homes
A
Michigan company that began as a pilot project with modular housing under the auspices of a county land bank contract is shaping up to be a national model for city infill and affordable housing for some of the country’s most difficult and expensive places to buy a home. “One of the largest housing challenges facing the United States is the lack of inventory,” said Todd Van Eck, a partner with David Allen in the newly incorporated business, called InnovaLab. “The lack of inventory in the urban setting has caused pricing to inflate at a rate that makes owning a home a real problem.” The lack of inventory in urban communities and service-based communities has been stated as being a crisis, Van Eck said. Families, in particular, cannot find affordable housing in the areas where jobs are most available.
“While the term ‘crisis’ is used to describe the housing inventory, the reality is that it negatively affects the very fiber of a community and the economy,” Van Eck said. “Quality housing, at an affordable price, is a must for every community.”
From County Pilot to Broad Incorporated Effort
MHInsider has followed the efforts of Kent County Land Bank — located in Grand Rapids, Mich., the county seat — and the rebranded InnovaLab entity in its efforts to provide a potential pilot program for an infill housing solution. Since that time, Allen and his team have begun to phase out of their county contract work and evolve InnovaLab as a company working to change the way housing is provided, using off-site modular construction as one of its tools.
True to the root of its name — innovation — InnovaLab uses tools available to federal, state and local governments to generate affordable housing. It joins alternative methods of construction and efficient methods of operation to facilitate affordable housing at all income levels. “InnovaLab is breaking through traditional methods of development to provide high-quality housing at an affordable price in communities throughout the country,” Allen said. One of InnovaLab’s most important traits, as a company, is its ability to bring innovation to the development process by using tools available through various participants in order to get housing built. Thinking beyond traditional residential development methods to work with government, the nonprofit sector and private organizations has resulted continued on page 59
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YOUR COMMUNITY - Rent: $443/month - Occupancy: 95%
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COMPETITOR #1 - Rent: $455/month - Occupancy: 91%
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COMPETITOR #2 - Rent: $516/month - Occupancy: 94%
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COMPETITOR #3 - Rent: $426/month - Occupancy: 84%
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in viable housing for infill. Among its most important relationships in the new development process is InnovaLab’s relationship with Champion Home Builders, which makes a variety of factory built housing, including off-site modular construction. InnovaLab cites numerous reasons why Champion Homes has been such a great partner. But, the predominant characteristic of Champion Homes is its team of people and processes, Van Eck said. “Champion Homes has been outstanding in facilitating the design work of InnovaLab, providing its design expertise, putting those designs into modularized engineering,” he said. “Champion has been providing consistent high quality, and its ability to maintain a process that is simple and effective. Working with Champion Homes has allowed InnovaLab to provide an innovative cost-efficient mechanism that gets quality housing on infill properties.”
What Can Be Done with Off-Site Built?
The reality of off-site construction is that most housing can be built using off-site methods. Off-site methods are regularly used to construct single-family homes, multi-unit housing, apartment housing and hotels. For InnovaLab, off-site modular construction is a key component of housing inventory, currently and in the future. Steve Payne is director of business development for U.S. operations with Champion Home Builders. “There are some limitations with modular construction, but in many cases modular systems can work. We use the same materials, meet the same building codes, look the same and have many of the same amenities of traditional sitebuilt construction,” Payne said. “Also, we are capable of meeting the neighborhood architectural characteristics in most infill settings.” For InnovaLab, Champion Homes was selected as its provider of housing
because of its ability to consistently maintain InnovaLab’s core requirements. Those core requirements included a defined process in design and construction, consistent quality, promotion of efficiencies, clear communication and the maintenance of budgets and schedules, Van Eck said. “The experience of actually going through the Champion Homes processes has exceeded expectations,” Allen said.
Why does InnovaLab see OffSite Modular Homes as a Key?
There are a number of reasons why off-site modular is used by InnovaLab. The off-site modular construction process provides efficiency, consistent quality, defined timelines and defined budgets. The Champion Homes process has permitted InnovaLab to generate designs that can be used on in-fill properties with great quality, desired layouts and beautiful, modern interior design. The Champion Homes process has also provided InnovaLab with a clear pricing structure to permit an
BUILDER / RETAILER
increase in amenities or a decrease in amenities with secure delivered pricing. It permits planning, budgeting and execution of housing construction at a level that could not be matched by InnovaLab when using on-site traditional construction methods. In July 2018, InnovaLab had an entr y-level modular home and a more high-end modular put on the city’s southeast side, as well as a midpriced home on the northeast side of Grand Rapids. All three homes came from Champion’s plant in Strattanville, Pa., and all arrived ready to set on their foundations within four weeks. Each home came in at about 70 percent the cost of what its site-built counterpart would be, at about $105 per square foot. The median price per square foot in the U.S. is $148, and in Grand Rapids it’s about $129 — $142 per square foot in the metro area. Eric DeLong, Grand Rapids’ interim city manager at the time, said he had some understanding of modular houscontinued on next page
BUILDER / RETAILER
continued from previous page
ing through his brother’s professional experience, and said he was impressed with how the product had taken great strides in quality, design and aesthetics. “I felt that modular was a viable solution to the affordable housing problem here, and I’m pleased to see this pilot program going so well,” DeLong said. “InnovaLab has launched a pilot with a lot of promise.”
More Modular Homes to Follow
Since the original three homes were installed last summer, the program has continued its trajectory. Another 10 modular residences have been insta l led, w ith more orders being taken. During a recent installation on the southeast side of the city, an agent for the home listings as well as nearby residents and business employees watched a crane lower pieces of two modular homes as work crews fixed them into place.
Tanya Powell-May is CEO of Legacy Housing GR, a Keller Williams agency. “My team and I will list these three properties in a couple of months,” Powell-May said. “These are our first modular homes. We sold over 77 homes last year, but none were modular. “I look at how quickly that home went up… that’s amazing,” she said. “We have a crisis here in terms of affordable housing. If we can get quality housing for people who need homes at this price point, that’s great. All over the nation there’s a shortage in inventory, especially at this price point.” Bobbie Locke, who works at a consulting agency across the street from the new homes, said it was “incredibly exciting” to see the new homes installed so efficiently. “What a beautiful thing for the neighborhood,” she said. “The architecture is a perfect fit. Though the neighborhood is mature and established, they’ll fit right in. It’s a wonderful opportunity.
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“It doesn’t just mean good housing, it means fast housing,” Locke said. “The fact they can do it so quickly means people who are waiting are going to get into homes faster.”
How Modular Homes Are Sold
Potential buyers can also treat these new modular homes as they would any other home for sale. When completed and priced, the homes are listed on the metro multiple listing service and will be open for offers. Allen said if developers — whether in the for-profit or nonprofit sector — can make the math work for the land, the only obstacle is people’s general perception of off-site built homes. Typically, that perception is changed with a walk-through of a modular home. “The stigma associated with off-site modular homes is not well placed,” Van Eck said, noting how auto manufacturing has thrived with continued improved processes. “Like automobiles, it is time for housing to modernize its processes to focus on efficiency as well as quality.” MHV Matt Milkovich, MHInsider’s managing editor, has an extensive background in jour nalism . He was managing editor of two agricultural trade magazines for several years, and was a reporter for local newspapers before that. Patrick Revere is executive editor for the MHInsider magazine, as well as the MHInsider blog and MHVillager, a lifestyle and resources blog for homeowners and residents. He is an award-winning journalist and writer who has written extensively about manufacturing, real estate, management, technology, the building trades and the labor markets. FOR THE LATEST INDUSTRY NEWS VISIT
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COMMUNITY
Is It Time to Sell Your Mobile Home Community? By Kevan Enger Photo courtesy of Sun Communities
T
here’s a lot of talk going on right now about cycles, the economy, interest rates, and the dreaded but inevitable slowdown. With all the noise, it can often be confusing to sort through what’s hype, hyperbole, or genuinely hot. Like all other investors and business owners, there comes a time when you begin to wonder if you should be taking some kind of action, such as selling, or should you just wait and hold? Mobile home park owners are in a historically unique position, and the question on whether to act or not has never been more consequential. Here’s how to know whether now is the right time to sell.
Business, Personal, or Both
Business owners sell for one of three reasons: business, personal, or both. For the purposes of this article we’ll set the
"Mobile home park owners are in a historically unique position, and the question on whether to act or not has never been more consequential."
— Kevan Enger, Capstone MH
personal aside, which leaves us with the business reasons for considering
whether it is time to sell or hold. While there are many topline factors involved, the decision typically comes down to the bottom line: Will you make money by selling now? For most of you, the answer to that question will be an easy “yes”. You bought a while ago, have held your park for some time, and prices have dramatically increased over the last few years. So the question becomes: Will you make more if you sell now or do you hold to see if you can gain more by waiting? The answer to that is always in the market, and the market is telling us several things. continued on next page
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COMMUNITY continued from previous page
According to the National Low Income Housing Coalition, the U.S. has a shortage of more than 7.2 million rental homes that are available to extremely low-income renter households. Only 35 affordable and available rental homes exist for every 100 extremely low-income renter households. In addition, as Baby Boomers are retiring in record numbers, home prices have hit historic highs, and fewer affordable housing units are being supplied to the market. The need for affordable housing has hit an all-time high. While the demand for manufactured home properties as investments has boomed, the supply has not. The inventory of available manufactured home parks has remained low because the barriers to entry are high and the path to approval and profitability for new developments can be long and costly. This gap between the supply and demand of mobile home communities has driven park prices higher than ever.
Shiny Object
The increase in demand and price has attracted the attention of investors. Mobile home parks have become the shiny objects of the commercial real estate investment set. As a result, individual, corporate, and institutional investors have moved in. According to a recent article in Thomson Reuters Foundation News, Dave Anderson, executive director of the National Manufactured Home Owners Association, noted that there was a “‘huge jump’ of about 26 percent in the number of sites now controlled by the 50 largest operators in the three years to 2018.” Where there is demand, however, new supply will be created. This means, for example, that while just one mobile home community was built in Florida in the past 15 years, new communities will begin popping up because the large corporations can afford to pay what were, for family operators, prohibitive entry costs. More supply will drive park
prices down, and the shiny object will begin to lose its sparkle. The market is being sifted by corporate and institutional investors, and the mobile home sector, in my opinion, is primed for disruption. The question is how long do we have left in this cycle before a) there is a slowdown, b) the inevitable disruption occurs, and/or c) prices stop rising?
Buy Low and Sell High
With that being said, all investors know that one of the golden rules of investing is to buy low and sell high. With parks across the country selling at record prices, the market is telling us that now is a good time to sell. Today’s prices offer an excellent opportunity to sell high and cash out. So, how do you know if the price is high enough? Ask a qualified and licensed broker for a “Broker Opinion of Value”. Make sure the broker: • Specializes in the mobile home sector
• Focuses on representing sellers, not buyers • Has a proven track record of success • Has a solid reputation in the market • Advises, versus sells, you The Broker Opinion of Value, often referred to as a BOV, will provide market data, sales comparables, and other information to provide a data-backed and substantiated opinion of the potential price your property could sell for. Once you have that number in hand, you’ll know if it’s the right time to take action and sell. MHV Kevan Enger is a partner and manufactured housing director for Capstone MH. He specializes in helping mobile and manufactured home park property owners position, market and sell their properties to maximize returns. Call him at 407-494-8541 to discuss current listings or to determine if now is the time to sell.
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COMMUNITY
The Pros and Cons and Dos and Don’ts of Filling Vacant Lots By Michael Power
I
t’s the community owners’ lament: In filling vacant lots, do I rent, lease-option or sell with outside financing my community-owned homes? Author’s note: Swim in safe harbors! My 30 years of experience in being the operating partner in 25 MH Communities, buying, selling, renting, or leasing over 2,000 mobile homes and speaking to national and regional meetings of community owners over the past 10 years, positions me as uniquely qualified to have pointed opinions on the content I am sharing with you in this article. But my opinions and comments highlighted
here are for informational purposes only, and here is why. When dealing with contractual agreements of any kind, it is recommended that you seek out the advice of good legal counsel before implementing any new concepts or processes. In other words: “Forewarned is forearmed.” These are the points I will cover: 1. Requiring outside chattel financing and only “selling” homes in my community. 2. Renting homes fast-tracks a community fill-up. 3. Taking the angst out of the lease and an option to buy. continued on next page
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COMMUNITY continued from previous page
Outside Chattel Financing
In a perfect world for community owners, chattel financing would still be prevalent … but it is not. Limiting yourself to outside financing or cash sales slows the sales faucet down to a trickle. This option is best used when a community owner (CO) has a higher-quality community and limited number of vacancies at any given time — two to four homes. If so, upgrade your community, bring in quality homes and cherry-pick your buyers.
The Renting of Homes
This is the best option when you have substantial vacancies because of the ability to quickly fill vacant homes with qualified residents. At my 300-site community in metropolitan Atlanta, we own 200-plus homes and rent an average of eight to 12 every month. We offer each prospect, in writing, three options to get into a home. Purchase with outside financing at a discounted rental rate;
lease and an option with a $2,000 option fee; or just rent. In four years of ownership: Zero financed sales, three lease and an option, and 200 homes rented. In the mid-2000s, I was involved with 22 communities. We owned 1,500 homes, and virtually everyone we drew in by marketing preferred to rent. Caveat: These were all mid-size family parks in the Carolinas, so those with 55+ communities or communities in upstate New York, Oregon, Washington state and the like — where single-family rents are through the roof and there is minimal housing availability — likely would have a different experience. If you have a community with 15-plus vacancies, then the fastest fill-up will be the true rental model.
The Lease AND an Option to Purchase
My view on the LO (lease/option to purchase) is that this model should not
70 | MHINSIDER™ • MAY / JUNE 2019 • MHINSIDER.COM
be used to dump an older home on someone just so you can avoid the expense and time of repairs. The opportunity should be used to stabilize your tenant base by slowing resident turnover in your community. A $2,000 or $3,000 option fee can help restrain the occupant from impulsively “jumping ship.” My recommendations: Do a quality remodeling job to attract a more desirable, more stable tenant. Accept that the majority of your tenants will be living week to week and with limited disposable income to pay for emergency repairs. I have seen the need to replace a hot water tank result in a move-out when they can find a $99 move-in special somewhere. So, offer the lease-and-an-option tenant the ability to have the community repair more expensive items during the term and add that cost to the end of the lease. Require them to complete small repairs (less than $200) themselves, but
if needed, the CO will do it and add the cost to their next month’s rent. Caveats: Don’t offer to “sell” a home using an LO or rentto-home program. If it walks like a duck and quacks like a duck, it will be viewed as a duck (sales contract), and you may be in trouble. Don’t offer a contract where a percentage of monthly payment is credited to reduce the principal balance of the home. That is “amortization” or, in other words, a “loan.” Quack, quack. Optioning real estate or other things such as businesses or homes has been a viable legal transaction technique in the United States for years. It works best like this: Determine the monthly payment you need, the term you want and determine the reasonable residual cash value of the home at the end of the lease term. It cannot be zero, or that is amortization! Quack, quack. There are two contracts, not one. An option contract, which is an agreement to sell the home at a predetermined price and at a predetermined time in the future for a one-time fee (i.e. $3,000); along with the agreement that the optionee will lease the home and follow through on the payment and upkeep terms through the end of the lease period. The optionor agrees to deliver the title unencumbered, if the lease optionee elects to exercise the option at that time and meets all the terms of the lease. The lease of the home itself is a separate document. Recommendation: You are selling an option, not selling the home. If you agonize over the legality of the “lease and an option,” then don’t do it. Just rent the home. Michael Power is president of MHCInvestor.com and has been active in the manufactured housing industry for 30 years. During that time he has managed a syndication firm specializing in mobile home parks and apartments. He has consulted with sellers and buyers in transactions across the United States and mentored community owners on operations. Email him at MichaelPower@mhcinvestor.com.
6825 W. 1200 N. Nappanee, IN 46550
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COMMUNITY
NEW MANUFACTURED HOME COMMUNITY
PLANTATION OAKS OPENS
COMMUNITY
From the Ground Up: Opening the First New Florida Community in 15 Years By Patrick Revere Photos courtesy of Plantation Oaks of Ormond Beach
P
lantation Oaks of Ormond Beach, the first manufactured home community built from the ground up in Florida during the past 15 years, has held a grand opening and is taking its first wave of residents. “We got our certificate of occupancy, opened the clubhouse and closed our first two home purchases all on the same day in mid-January,” said Doug Kamm, sales director for Plantation Oaks of Ormond Beach. “We have three homes occupied now. “There are 23 homes on site in different stages of readiness. We have nine move-in ready homes, eight floor plans on display and several more floor plans coming in very soon.”
Where is Plantation Oaks of Ormond Beach?
The new manufactured home community is located at 2380 Chretien Drive on the north end of Ormond Beach, which is near the Atlantic Coast about 12 miles north of Daytona Beach. Plantation Oaks sits near the intersection of I-95 and U.S. 1. The community connects to municipal water and sewer. It also is in the final stages of annexation to Ormond Beach. Plantation Oaks of Ormond Beach is a 10-minute drive to the water, at both Ormond Beach and Flagler Beach. “The location is amazing,” Kamm said. “We abut a 12,000-acre nature preserve, which is what separates us from the Atlantic Ocean. All of that is right at the residents’ back door here. continued on page 75
Communities are our business. Capital One® Commercial Banking is proud to sponsor the 2019 MHI National Congress & Expo and to be in a business that’s invested in affordable, well-built communities. Be sure to stop by to see us at booth 200. capital.one/cre
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NO PURCHASE NECESSARY. Void where prohibited. See booth for official rules. Offered by Capital One, N.A., Member FDIC. The third parties listed are not affiliated with Capital One and are solely responsible for their product and services. All trademarks are the property of their respective owners. © 2019 Capital One.
continued from page 73
And, everyone is assured that area will remain undeveloped.”
Who Is Moving to Plantation Oaks?
Plantation Oaks of Ormond Beach is a 55+ community, with an emphasis on ease of living and lifestyle amenities. It meets a middle market demand, often with homebuyers downsizing from site-built homes. The homes are placed for curb appeal most often associated with design-savvy, site-built residential neighborhoods. Everyone who buys a home has a long driveway with room for three to six cars. So, there’s no need for street parking even when the homeowner has several visitors.
Meet the Swarts from Ipswich, Mass.
Sandra and Gerben Swart moved from Ipswich, Mass., to Ormond Beach to be in a warmer climate and near friends. Gerben had been a construction superintendent for 30 years. “We were over there when it was mostly dirt and they were building the clubhouse, and we saw the vision of what Plantation Oaks could be,” Sandra Swart said. “My husband and I were able to go to the factory, and walked through
the house before it was complete. We made some changes at that time. I never imagined living in a manufactured home, but my husband has studied everything they’re doing from the windows to the way it’s anchored. We just love the place.” The Swarts purchased the LaBelle V, a new home from Palm Harbor.
“The location is amazing. We abut a 12,000-acre nature preserve, which is what separates us from the Atlantic Ocean. All of that is right at the residents’ back door here. And, everyone is assured that area will remain undeveloped.”
–D oug Kamm, Plantation Oaks of Ormond Beach “It’s a three bedroom-, two-bath open concept home. We wanted to get something with room for our family to come down and visit us,” Sandra Swart said. “We’re going to have a lovely fireplace, two living rooms and a dining room. “There is a lot of space around you and every house has a front and back
All homes at Plantation Oaks of Ormond Beach come from Palm Harbor or Homes of Merit. Each is a multi-section home with front and rear porches, a garage and sidewalks.
COMMUNITY
porch, with a big beautiful garage. And we took an option for a bigger garage because my husband wants to have a wood shop,” she said. “The kitchen is amazing. We moved the island for added space and upgraded the appliances. And it has a phenomenal laundry room, which I’m so excited about after having to go down into an old basement my entire life.”
How Are Homes Situated at Plantation Oaks?
“These are very large homes sites,” Kamm said. “They’re 65 feet in width or larger and 110 feet in depth or deeper, which is a significant increase from most manufactured home communities. Every home has a front porch and front entry, which makes for a very nice uniform look from the street. “The garage must sit back at least 10 feet from the home,” Kamm added. “And the lots do not back up to other sites. They back up to the woods or a water view.” Residents own the home and pay a $500-$700 monthly lease payment for the homesite, dependent on where and how the home is situated in the community. continued on page 77
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COMMUNITY
Plantation Oaks is a 55+ community in a natural setting with a wide array of amenities.
New Manufactured Homes from Palm Harbor and Homes of Merit
“Our homes range from 1,200 square feet to nearly 2,500 square feet,” Kamm said. “One unique thing is that all the homes have an attached two-car garage, with a two-step entry from the garage to the home." Each new manufactured home available for purchase within Plantation Oaks comes from either Palm Harbor or Homes of Merit. All homes in the community are multi-section homes. For instance, The Riviera, from Palm Harbor, is more than 1,700 square feet. It has three bedrooms, two baths, a large kitchen, interior sliding barn doors and a walk-in closet in the master bedroom.
What Amenities Does Plantation Oaks Have?
When Plantation Oaks is fully occupied it will have 427 homes across 233 acres, which is less than half the density of a great number of manufactured home communities. The homes are affordable in comparison with current market standards. The developers for Plantation Oaks of Ormond Beach are Parker Mynchenberg and Ronnie Bledsoe. Mynchenberg is a civil engineer, landscape architect and pool designer.
Bledsoe has significant experience as an tionally, it will provide tennis and pickle underground utilities contractor. The ball courts, shuffleboard, walking and two have teamed in development efforts bike trails, boat and RV storage, nearby several times, including on Plantation shopping and entertainment. MHV Oaks of Flagler Beach between 1998 and 2004. They sold that community and purchased the Ormond Beach property, wa ited out t he recession and in 2012 worked on re-zoning for manufactured housing. WRITTEN “ We ’v e c o m INSURED pleted a 10,0 0 0 square-foot clubhouse with café and large kitchen, as well as commu• 10 Year New Home Warranties nity rooms to play • 10 Year Structural Warranty c a rd s , e xerci se • FHA, VA & USDA Approved and meet friends,” • Exclusive Incentive Program Mynchenberg • Builder/Dealer and said. “Out back Manufacturer Programs are covered and • Modular Programs Available screened porches that overlook an Olympic size zero entry pool. It’s ADA accessible, and very NEW HOME WARRANTIES good for seniors.” Tifanee McCall A lso, the new 800.247.1812 ext. 2132 community w ill sales@mhwconline.com boast dog runs and www.mhwconline.com/MHInsider dog parks. Addi-
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THE ALLEN LEGACY
™
Classified Marketplace
Welcome our new Marketplace section of the magazine. Whether you’re advertising employment opportunities, communities for sale, services, or recently financed deals, The MHInsider™ Marketplace puts your classified ad in the premier news source for industry professionals. To place your ad, call Matthew O’Brian at (877) 406-0232. FOR SALE 1998 Toter C7500 Only 117,000 Miles, 6 way hitch, dealer truck. Runs great, clean, good tires. CAT 3126 10 Speed 275 HP $30,000 Call Sid at 319-931-1822
ACM, met informally to exchange information, share contacts, and engage in interpersonal networking. And there’ve been experiences around which legends were born. Who can forget when MHI’s newly hired top executive arrived at her first industry event, the MHCongress luncheon, wearing a backpack? Or when tenant activists briefly interrupted a luncheon event a decade later? A personal memory, dating back to 1989, found Carolyn and me arriving at the host casino near Lake Tahoe, late at night, to find our room reservation had been given to someone else. So, staff put us up in the gambler’s suite high atop the hotel, complete with circular bed and mirrored ceiling! Another time, preparing to meet with the original property managers of a new ROC (resident-owned community) conversion firm, I arrived attired in a suit and tie, only to find everyone else in very casual wear, sitting and lounging on the floor throughout the suite.
Yes, the Manufactured Housing Congress has a long history of bringing all sectors of the industry and realty asset class together for education, networking, and camaraderie. This year’s venue in New Orleans is the first location change in more than two decades. Will be interesting to see and hear what adventures play out this time around in “Nawlins”. Who’s for some jambalaya, red beans and rice, chargrilled oysters, beignets, muffulettas, or boiled Cajun-spiced mudbugs with new potatoes and corn on the cob? MHV George Allen, administrator of COBA7, has owned and fee-managed land-lease communities since 1978. He’s been named MHI’s Industry Person of the Year and also is a member of the RV/MH Hall of Fame. He also has been designated a Certified Property Manager-Emeritus and a Manufactured Housing Manager-Master. He can be reached by phone at (317) 346-7156, or by email at g fa7156@aol.com. For more information visit educatemhc.com.
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THE ALLEN LEGACY
History of MHI Congress & Expo Leads Back to Gub Mix By George Allen, CPM Emeritus, MHM-Master
W
here were you in 1991, when Gub Mix launched the first Manufactured Housing Congress? Who’s Gub Mix? Well, visit www. rvmhhalloffame.org, click on Hall of Fame, and then search for the Class of 2018 to find his biographical sketch. There, two things stand out. First, as executive director, he simultaneously led four state manufactured housing associations in Idaho, Utah, Nevada and Arizona! And in 1991, he planned and hosted the first Manufactured Housing Congress. Gub, now retired, was a tireless and fearless promoter, as well as defender, of HUD-Code manufactured housing, often confronting critics, even calling industry leaders to task, when he felt they’d gone awry. There is some interesting history leading up to the year 1991. In 1986 and 1987, Gub hosted meetings for
Idaho, Nevada and Utah, collectively, in Reno, Nev. Between 1988 and 1990, he invited Washington state, Oregon, Alaska, and Hawaii to participate.
Gub, now retired, was a tireless and fearless promoter, as well as defender, of HUD-Code manufactured housing. The first Manufactured Housing Congress, with new homes on display, was held during 1991 at Cashman Field in Las Vegas. It was open to the public, and hosted by the Desert Inn. Soon thereafter, MHI expressed interest in supporting this now-national trade event, and from 1998 through 2003 it assisted Gub with meeting planning, gradually taking ownership of the congress.
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There are many interesting asides where the Manufactured Housing Congress is concerned. For instance, few know the International Networking Roundtable (for manufactured home communit y ow ners/operators) also launched during 1991 – but in Clearwater, Fla. And just about every MHCongress has played a role in the development of various programs and organizations. For example, early organization meetings, between 1993 and 1996, of what became MHI’s National Communities Council, occurred under the leadership of Chairman Jeff Wick. And for several years, a group of Manufactured Housing Executive Women (MHEW), including Susan McCarty of EducateMHC, Carolyn Allen of GFA Management Inc., Dee Pizer, MHM, of Zeman MHC, Christine Lindsey, MHM, and Chrissy Jackson, continued on page 81
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