MHInsider™ September/October 2019 - SECO Conference Edition

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2019 SE C O C ON F E RENC E • O C TO BER 9 – 1 0, 20 1 9 SEPTEMBER/OCTOBER 2019



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Memphis Blues Earns Praise for All-Rental Concept IN THIS ISSUE: • Advice for New Community Owners • Skyline Champion Opens Louisiana Plant • Fannie Mae Incentive Programs A Publication of

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–––––––– Publisher

Darren Krolewski

Associate Publisher Mark Dollan

Executive Editor

Patrick Revere

Advice for New Community Owners

Skyline Champion Opens Louisiana Plant

NEWS BRIEFS 6 Industry Happenings: Updates from the World of Manufactured Housing EVENTS 10 Upcoming Industry Events 12 28th Networking Roundtable 15 2019 NCC Fall Leadership Forum COMMUNITY 21 New Communities Slow to Rise on Manufactured Housing Landscape 26 Manufactured Home Community Best Practices 31 When the Community Comes with ‘Notes’ 35 Nonprofit MHCs 40 Succession

44 2019 SECO CONFERENCE GUIDE BUILDER / RETAILER 48 Sailing the Ship in All Weather for Kentucky Dream Homes FINANCING 54 Fannie Mae Program Incentivizes Tenant Protections 56 Joint Venture Financing For Retailers and Community Owners ADVOCACY 61 Don’t Just Study the Zoning Code, Study the Zoning Commission 62 Manufactured Housing Communities: The Homeownership Choice of Millions of Americans SALES 68 ‘Mastermind’ Groups Will Make You a Better Business Person 72 How to Create Trust and Build Community Awareness

Contributing Editor George Allen

Senior Graphic Designer Merit Alcala


Jeff Barringer Thomas Casparian Ken Corbin Dr. Lesli Gooch Marc Lifset Matt Milkovich Michael Power Ken Rishel Rick Robinson John Ace Underwood Jose Villarreal Josh Weston

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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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Copyright ©2019 MHVillage, Inc. All rights reserved. Reproduction of MHInsider content, MHI or other contributor content, in part or in whole, is prohibited without written authorization from MHVillage, Inc.

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LEGAL 77 Rent Control for Manufactured Housing Communities - CPI Systems THE ALLEN LEGACY 82 A Confluence of Community Owners 4 | MHINSIDER™ • SEPTEMBER / OCTOBER 2019 • MHINSIDER.COM

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

Value of Learning


‘When You Stop Learning, You Stop Growing’ By Darren Krolewski


enneth Blanchard, the famous leadership consultant and author of “The One Minute Manager”, coined the phrase, “When you stop learning, you stop growing”. As an engaged group of seasoned community owners, as well as newcomers to the business, converge in Atlanta for the Southeast Community Owners symposium (SECO), I’m reminded about the tremendous value of learning in our industry. Since its inception just a few short years ago, SECO has grown to become one of the southeast’s preeminent conferences focused on owning and operating manufactured home communities. It’s an event where independent community owners come together to exchange ideas with their peers and learn how to tackle some of the unique challenges of our business. If you’re new to the business of owning a community or are simply looking to bounce some ideas off like-minded peers, you’ll be hard-pressed to find a more genuine and welcoming group of owners committed to helping other operators become more successful. While there are those who lament the inconvenience of travel, the expense of attending industry events, or the opportunity cost of being out of the office, I’ve always found educational conferences like SECO and the Networking Roundtable to be some of the most valuable ways to gain knowledge and insight about our business. When I joined the manufactured housing industry back in the 1990s, there wasn’t much in the way of training for me as a newcomer. I was told I’d have an office, business cards, computer equipment and a long list of important projects to work on. In reality, I was directed to a conference room, given back issues of industry trade magazines, and told I’d have to figure out what to do next right after I ordered my computer equipment. That was it. I don’t think I ever got those business cards, either. Nonetheless, I slowly figured out the business. I started by talking to my colleagues, then our customers and peers. I shopped around to see what our competitors inside and outside the industry were doing. And I sought out opportunities to attend events like The Louisville Show, Congress and Expo and our state association meetings. I learned about the business from other members of the industry. In the process, I picked up a lot of ideas that I put to use for growth in our company. Thankfully, newcomers and veterans alike now have many more opportunities to stay engaged with the industry and grow their knowledge, from the traditional meetings and conferences to LinkedIn groups and podcasts. Take advantage of these resources and other valuable informational and networking opportunities.

Get involved with your state association and our national trade organization, the Manufactured Housing Institute (MHI). Our state and national association executives are on the front lines of the prominent issues facing our industry. Working with them will make you more informed, and your support and involvement will help make our entire industry stronger. Be sure to subscribe to the industry’s news and information resources such as the excellent newsletters and education resources penned by George Allen, and of course, our own MHInsider magazine and professional blog. When you aspire to become a student of your business, class is always in session. Continue growing your knowledge and watch your business prosper. MHV Darren Krolewski is co-president and chief business development officer of MHVillage, the number one website for manufactured homes, retailers and communities.






Updates from the World of Manufactured Housing…

UMH Acquires Ohio Community UMH Properties acquired a community in Ohio for $19.4 million. The community, Friendly Village, contains 824 developed homesites — of which about 46% are occupied — on approximately 101 acres. Friendly Village is the third community acquired from a four-community portfolio. UMH expects to close on the fourth community in the third quarter. The company has two additional communities under contract that should close in the third quarter as well. U M H P rop er t ie s i s a publ ic equ it y R EIT that ow ns and operates 119 manufactured home communities with approximately 22,300 developed homesites.

Roberts Offering NXT Homes Roberts Communities, owner and

nities in Arizona, Texas, and Colorado, is offering a luxury NXT Homes line. Designed with style, innovation and the customer experience in mind, the new line will bring nearly 200 off-site built homes to Roberts Communities in central Texas, with a starting price of $91,995 without land.

Tri-State serves the hearth, heating and gas products industries, as well as the manufactured housing and residential HVAC industries. Primary product lines include gas grills, fireplace logs and heating products, along with HVAC equipment and manufactured housing accessories.

Blevins Acquires Tri-State Distributors Blevins Inc. , a Nashville, Tenn.-

PEP Appoints New CEO Performance Equity Partners (PEP), a finance company based in

based supplier of housing products, has acquired Tri-State Distributors and its nine branch locations. Tri-State will now be a division of Blevins and will continue operating as Tri-State Distributors. Tri-State will continue to operate its corporate office in Royston, Ga., and all of its nine locations across Georgia, Florida, South Carolina, Alabama, and Mississippi.

Tinley Park, Ill., appointed R. Scott MacNeil as its CEO. MacNeil, an attorney and Certified Public Accountant, will manage PEP’s day-to-day operations, as well as its future business development and growth. He was most recently senior vice president and senior loan officer at First Secure Bank. Richard Voboril,

operator of manufactured home commu-

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Photo courtesy of UMH Properties

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PEP’s general manager for the past 12 years, will now advise the company on a part-time basis. PEP provides individual consumer financing for the purchase and refinance of manufactured homes in 14 states. PEP also purchases existing loan portfolios from manufactured home community investors.

VBC will Open New Facility VBC Manufacturing , a producer of pre-fabricated building components for the construction industry, will open a manufacturing facility in Hamlet, N.C. The project is expected to create 130 jobs. The company, a division of Volumetric Building Companies, will invest more than $12 million in Richmond County, N.C., within the next three years. VBC manufactures pre-fabricated components that are used in the multi-family residential, student housing, and hospitality construction markets.

in sales tax revenue for Casper should the residents be counted in the 2020 Census. The next step in the annexation process will be to notify property owners. The council would then pass another resolution to move forward with the annexation, allowing time for people to review the proposal.

Six Rock Acquires NC Community Six Rock Properties acquired Oak Grove Park, a 107-site property in Dallas, N.C. This is the company's first acquisition in Gaston County, N.C., and ninth overall acquisition of manufactured housing communities. Founded in 2014 and headquartered in Charlotte, N.C., Six Rock Properties is a family-owned company that acquires, owns, and operates manufactured home communities.

Grandbridge Facilitates Refinance Grandbridge Real Estate Capital

manufactured home communities in Riviera Beach, Fla. Tampa-based Bedrock bought a total of 303 mobile home sites at 3030 Broadway Boulevard and 3051 Broadway Boulevard, for $26,402 per home site. A company tied to Kansas City-based Mission Peak Capital sold the properties. Bedrock secured an $8.8 million loan from RCC Real Estate to acquire the properties.

facilitated a cash-out refinance for a 292site manufactured home community in Sonoma, Calif. Newport Beach, Calif.-based vice presidents Hunter Curtis and Taylor Curtis originated the transaction for a first-time client. The nonrecourse financing was structured with a fully amortizing term and funded through one of Grandbridge’s insu rance company correspondents. The loan was secured by an undisclosed, age-restricted manufactured housing community in Sonoma County.

City to Annex MH Community The city of Casper, Wyo., plans to

LCI Italy Acquires Lavet LCI Industries, which supplies high-

annex a nearby manufactured housing community called Green Valley Mobile Home Park. The City Council passed a resolution on June 18 allowing the process to start. One of the reasons the annexation initially was recommended was to boost Casper’s population ahead of the 2020 U.S. Census. The city estimates the property has a population of 260 people, which could generate $147,160

ly engineered components for original equipment manufacturers of leisure vehicles and mobile transportation, announced that its subsidiary, LCI Italy, has acquired Lavet, a manufacturer of window blind systems in Siena, Italy. The acquisition of Lavet will allow LCI to expand its product portfolio in key, in-demand categories for LCI’s customers. LCI and Lavet have worked closely with one another for years to service

Bedrock Buys Florida Communities Bedrock Communities bought two


manufacturers of European leisure vehicles, which has helped LCI gain valuable insight into Lavet’s management team and product offerings.

KMHI Names Community of the Year Riverbend Pointe, a Flagship community in Owensboro, Ky., was named 2019 Community of the Year by the Kentucky Manufactured Housing Institute (KMHI). Kurt Keeney, CEO of Flagship Communities (formerly SSK Communities), purchased Riverbend Pointe in 2015 in a state of disrepair. Older, abandoned homes were removed and replaced with new homes. Riverbend Pointe was selected for the award based on the owners’ exceptional dedication and determination in regard to the manufactured housing industry, according to KMHI.

Alabama Park Purchased A Boca Raton-based real estate group paid $825,000 for Happy Acres Mobile Home Park in Elberta, Ala., according to Alla Nikitina of Hosteeva Realty, who represented the buyer. Renea Beasley of Sperry CGA, The Andrews Group, worked for the seller.

Owner Sells Park to Residents ROC USA Network worked with Dale Strom, a second-generation owner, to sell Riverbend Mobile Home Park in Clatskanie, Ore. Strom owned and operated Riverbend for 12 years. His father owned and operated his own park years earlier. Strom realized his family’s legacy could be helping to secure the futures of long-time customers by selling them the neighborhood. He received fair-market value, $1.7 million, for the park, and now those customers have a safe, affordable place to live for decades to come, according to ROC USA.

J. Cary Monroe Retires J. Cary Monroe retired as head of the firm of Monroe & Giordano on May 31.


Monroe entered the finance field in 1974 after graduating from the University of Georgia with a degree in real estate. In 1991, Monroe was the head of Southeast lending for a California bank when he noticed mortgage banking groups shunning manufactured home community loans. He moved from Atlanta to Tampa to take advantage of this niche. He added Mike Giordano and Matt Gentile to the team. Monroe & Giordano has closed over $3 billion in transactions.

Obituaries James “Jimmy” Russell Kinser Jr., 66, of Duffield, Va., died June 28 after an apparent heart attack. Kinser was born and raised in Norton, Va. He worked in the manufactured home industry for over 40 years. Kinser began in the delivery and set up of homes, then worked in the service department, eventually becoming a salesman, and was promoted to general manager at Glenn’s Finer Homes. He worked for other manufactured home lots as a manager and owner in southwest Virginia and northeast Tennessee, but later returned

to Glenn’s Finer Homes in Norton as vice president and general manager. Kinser earned several awards and achievements over the years. Antonino “Tony” Ruggirello, died July 2 at the age of 84. The founder of AJR Development and a friend to the Michigan Manufactured Housing Association, Ruggirello was born in Detroit and lived in southeast Michigan. Ruggirello was the father of Tony (Rose) and Jerry (Sania), and grandfather of Nino (Lauren), Tony, Maria, Gina, Juliana, Joe, and Ava. He was the brother of Antonio A. “Toto” and the late Joseph and Louis.


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Industry Events



28th Annual Networking Roundtable

Sept. 8-10 - Indianapolis, Ind. The Alexander Hotel Hosted by EducateMHC and industry veteran George Allen, this conference draws hundreds of the leading land-lease community owners and operators for a discussion on best practices and deal-making. An MHM class will be held on Sept. 11 (separate registration required).

Florida Manufactured Housing Association Annual Convention

Sept. 11-12 - Orlando, Fla. Rosen Plaza Hotel Florida’s largest gathering of manufactured housing professionals. Since 1947, FMHA has been one of the most influential voices in the MH industry.

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.



Oct. 9-10 - Atlanta, Ga. Hilton Atlanta Airport The South East Community Owners annual symposium has turned into one of the largest small- to mid-sized manufactured home community meetings in the nation. Pre-SECO workshops are scheduled for Oct. 8.

MMHA 78th Annual Conference

Oct. 10 - Novi, Mich. Suburban Collection Showplace The Michigan Manufactured Housing Association will be providing it’s members with a unique combination of education, legislative, legal and networking opportunities. The event will take place in conjunction with the MMHA Home Showcase where manufactured homes will be on display within the Novi Home Show.

NCC Fall Leadership Forum 2019

Nov. 13-15 - Chicago, Ill. The Westin Michigan Avenue Chicago Join MHI at the only strategic executive-level event of the year for those involved with manufactured home communities as an owner/ manager, manufacturer, service provider, broker, lender, or consultant.

Have an event you'd like listed here? Call our Executive Editor, Patrick Revere, at (616) 888-6994, or email

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28th Networking Roundtable T

he 28th Annual Networking Roundtable for manufactured housing professionals will take place at The Alexander in Indianapolis, Ind., Sept. 8-10. The Networking Roundtable allows industry professionals to receive hands-on, timely education on every aspect of operating or property management of a manufactured housing land-lease community. Programming for the annual gathering includes presentations, panels and discussions with some of the leading professionals in the business. A keynote address from U.S. Sen. Todd Young of Indiana will get business underway the opening morning of the Roundtable. “Senator Young being in Indianapolis to speak to our industry is yet another clear sign of the elevation of manufactured housing in D.C. as a solution toward solving the affordable housing crisis in our country,” event organizer Erin Smith said. “We appreciate

Good Service, Good Prices, It’s the American Way!

the senator’s willingness to appear at the 28th Networking Roundtable, as well as his continued support for our industry and the Indiana workforce that is so vital to what we do.”

Preliminary Schedule

Educational and professional networking topics include community management, finance, sales, technology, community acquisition and much more. Speakers include Dave Reynolds of Impact MHC, Michael Callaghan of Four Leaf Properties, Paul Bradley of ROC USA and event founder George Allen of EducateMHC. In addition to the two days of official programming, Allen will greet early arrivers for an open conversation and networking reception on Sunday, Sept. 8. EducateMHC also will host a Manufactured Housing Manager certification class on Sept. 11. Registration for the MHM class is separate from event registration.

Venue and Accommodations

For the third consecutive year, the Networking Roundtable will be held at The Alexander in downtown Indianapolis. The Alexander offers premium conference and meeting space, as well as ideal accommodations for manufactured housing professionals traveling to the event.

About the Networking Roundtable

The Networking Roundtable was founded in Clearwater, Fla., in 1991, with more than 100 manufactured housing professionals in attendance. Each year the event has grown in size and stature. More than 250 industry professionals now attend the annual event, which draws from a national audience and all corners of the manufactured housing industry. MHV

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2019 NCC Fall Leadership Forum N

ow in its seventh consecutive year, MHI’s National Communities Council (NCC) Fall Leadership Forum — the annual networking event for community executives — has continued to gain momentum. The 2019 event once again will be held in Chicago, Nov. 13-15 at The Westin Michigan Avenue Chicago. The event attracts more than 400 manufactured housing community executives and professionals. Those involved with manufactured home communities as owner/operators, managers, manufacturers, service providers, brokers, lenders or consultants should mark their calendars and attend. The NCC Fall Leadership Forum provides strategic-level networking, topnotch education and low out-of-office time. It’s centrally located in Chicago, with education and networking packed into a day and a half. This event allows participants to minimize their time away from the office while maximizing their investment within the industry.

The event allows ample time to mingle with attendees from across the country and to make plenty of new business contacts. You’re guaranteed to walk away with new individual or company contacts for future business. Kicking off the event is the Welcome Networking Reception Wednesday, Nov. 13, at the Westin. Participants also will be able to explore unprecedented cityscape views of Chicago during the Thursday, Nov. 14, reception at the 360 Chicago Observation Deck.

Top-notch Education

Leading industry experts will expound on challenges facing the business of manufactured housing communities. Presentations will offer strategic content to explore new ideas, examine trends and give a unique perspective not found elsewhere in the industry. Topics will be filled with information on managing residents, with trends for manufactured home communities, with the state of the market, and much more. For more in for mation a nd to register, visit w w w.Manufactured Housing/2019NCCFLF. MHV


During the forum, participants can connect with manufactured housing executives and professionals within the community space through a variety of receptions, meals and breaks. MHINSIDER.COM • SEPTEMBER / OCTOBER 2019 • MHINSIDER™ |


COMMUNITY Photo Courtesy of UMH Properties



UMH Properties has landed on what it believes is the best value in the housing market for renters. 16 | MHINSIDER™ • SEPTEMBER / OCTOBER 2019 • MHINSIDER.COM


Memphis Blues Breaks the Mold Among Manufactured Home Communities UMH Properties’ All-Rental Model Earns Praise of the Industry, Residents By Patrick Revere


emphis Blues is the first and only all-rental manufactured home community in the United States. And the community with a view of the Memphis skyline is drawing rave reviews from its residents, as well as the praise of the industry. The community won the award for the nation’s best from the Manufactured Housing Institute at the annual Congress & Expo this year. Memphis Blues resident Alexa Lopez, her fiance Edgar, and their two daughters had just come from Texas for work when his job moved. The family stayed in a hotel for two months while looking for an apartment to rent. “When I saw this online, I was shocked,” Alexa said of the community. “This house, at this cost, with your own parking space and patio and yard. The whole community is beautiful. My girls love the playground and the basketball court.”

Though Memphis Blues presents itself as new, it’s actually a re-built community, brought back to life after closing in the wake of near record-setting high water levels on the Mississippi River in 2011. It was a flood that closed many parts of the city. The Garza-Lopez family is the first to live in the new 3-bedroom, 2-bath home. “I thought it was a fake ad,” Alexa confessed. “I called Melissa in the middle of the night and told her I was very interested and she called me back first thing in the morning. It was just too good to believe. You get way more here than you can find anywhere else. A security guard? Friendly neighbors. It’s so nice. And we have a lot of little community events and we can meet the other neighbors. “Honestly, this is way more than what I was expecting,” Alexa said. “It’s very updated and beautiful. We have laminate hardwood flooring and a vintage-modern

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COMMUNITY continued from previous page

backsplash, dark wood cabinets, a giant master bedroom, and I love that I have my own little laundry room.” Alexa said when she found Memphis Blues it became clear that it was what she wanted, and what her family needed. Just the prospect of going for groceries, she said, and returning to a third-floor walk-up apartment with two kids was enough to sell her on the value of having the accessible, independent space their manufactured home provides.

Why UMH Properties Opted for an All-Rental Community

UMH Properties operates nearly 7,000 rental homes mixed throughout its more than 100 manufactured home communities in eight states. The company’s experience is that the 16-foot by 70-foot manufactured home with three bedrooms and two baths sitting on a 50-foot by 100-foot lot in a community with ample amenities is the best rental housing value in America.

“UMH has always asked why a community owner cannot get the same financing on our homes used as rental units that any apartment developer obtains,” UMH President Sam Landy said. Currently, that financing for apartment units is 4%. UMH asked Fannie Mae and Freddie Mac to create a program giving rental manufactured homes the same rates as apartments. “They came back to us and said the prototype should be an all-rental community. We were just starting construction of Memphis Blues,” Landy said. “A fter careful analysis, we decided to make Memphis Blues an all-rental community.” On 150 lots at $60,000 per house, the owner would pay about 7%, or $4,200 in interest per house. At 4%, the owner pays about $2,400. That’s over $300,000 a year in savings for the whole community. UMH Vice President and regional manager for Tennessee Gina Beasley

said UMH chose manufacturers Clayton Savannah and Fleetwood Homes Lafayette for many reasons, including potentia l upg rades such as tile showers, large laundry rooms, energy-efficient double-pane windows, and steel back doors. “After making the decisions on the manufacturers, our focus went toward the high-end appearance, state of the art amenities, and first-class experience. From the beautiful office and landscaping, to the black wrought-iron gated entrance and custom mural, painted by a local artist, no detail was missed,” Beasley said. “Memphis Blues truly is unique and stands out when it comes to what manufactured housing offers.”

How All-Rental Works for the Residents

“Our experience with renters in our homes has been fantastic,” Memphis Blues Manager Melissa Garrett said. “We completely rebuilt the community, we put


2019 NCC Fall Leadership Forum The Annual Networking Event for Community Executives

November 13 - 15

The Westin Michigan Avenue Chicago, IL Questions? 18 | MHINSIDER™ • SEPTEMBER / OCTOBER 2019 • MHINSIDER.COM


Alexa Lopez and her daughters, Sofia, 2, and Camila, 4, on the porch of their new home at Memphis Blues, a Tennessee all-rental community from UMH Properties. Photo courtesy of the Garza-Lopez family.

in new streets, utilities, perimeter security fences, management office, and amenities. “Our homes are energy efficient and come with a full kitchen appliance package, washer and dryer hookups, central heating and air, your own personal yard space, covered deck, two-car driveway, a landscaped yard, and storage shed,” Garrett said. The new, reimagined Memphis Blues had a June 2017 ribbon-cutting. Today, the community is at 100% occupancy and in the fall will open the expanded section of the community, which will provide 50 more new manufactured homes for rent. Memphis Blues also boasts a business center, basketball court, dog park, a playground for kids and a huge, relaxing patio with an outdoor fireplace lounge. Garrett and her staff organize events, including holiday gatherings such as Halloween trick-or-treat, a Christmas party, the annual Easter egg hunt and multiple summer barbecues. “The residents love getting together with their neighbors. I think it makes everyone feel very comfortable,” Garrett said. More than 30 prospective renters wait on a list to get in the community. Garrett and her staff work with interested home shoppers. She said they encourage prospects who intend to stay three years or less to rent a home. Those interested in a longer-term arrangement are referred to nearby communities where homes are sold. Garrett said Alexa Lopez’s reaction to the online listing for rental homes in Memphis Blues is common.

“I post photos and get calls from people asking to see the real photos, the photos of the actual home. I had to tell people that photo is the actual home. I’d say ‘I walked right in there myself and took that photo.’ And most of the time people would say, ‘Alright, I have to come look for myself’. “People coming here are really amazed how nice the community is and how beautiful the homes are. If you were to walk into this house… for $799 per month? You can’t find this anywhere else,” she said. MHV 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.



January 15-17, 2020 • Kentucky Exposition Center

Gov. Bevin Visits the Kentucky Expo Center for Record-Setting Louisville Show


Join New and Existing Customers at the Midwest’s Premier Event for Manufactured Housing Professionals The Louisville Show has been the sought-after indoor manufactured housing event for over 50 years. By coming to Louisville you connect with people, products, and resources that work together to create opportunities and build your future success in the industry! Believe us when we say it’s important to sign up now because space will be at a premium within a very short time. Our professional marketing campaign begins months ahead of the show. We use all of the tactics at our disposal and the Midwest state associations also will assist in promoting The Louisville Show to its state membership.

Register Online:

Photo Courtesy of Resort at Canopy Oaks


The Precious Few Production of manufactured homes will be able to rise well beyond that 100,000 unit benchmark again only when the development of manufactured home communities rebounds

New Communities Slow to Rise on Manufactured Housing Landscape By Patrick Revere


omewhere very near 315 new manufactured home communities have been constructed in the U.S. since 2002. There were more than 2,600 such communities built during the previous 15 years, including 395 in 1986-87 alone. The current trend, considering 2005-2014 alone, makes sense given the conditions. We all remember the dramatic job losses, the housing collapse, and the ensuing credit crisis. There was a massive backlog of undervalued, vacant homes on the market, especially in locales like Florida, Arizona, and Michigan. Those three hard-hit states are among some of the largest manufactured home markets in the country. But when we consider the years prior to and following that loathsome time, what should we make of a mere 60 new communities built nationally during those seven years?

Will New Communities Become a Trend? Is There Land? Are Planners Ready?

If the manufactured housing industry is able to support less than 2,000 new home sites per year for new communities, the U.S. housing market will continue to strain to keep up with rising demand. Manufactured home production went from better than 146,000 per year in 2005 to less than 50,000 in 2009. Those were hard years, but the economy is back and new homes are needed.

Amid the Housing Affordability Crisis, New MH Communities Are in Demand

Production of manufactured homes will be able to rise well beyond that 100,000 unit benchmark again only when the development of manufactured home communities rebounds. And for

that to happen, the industry needs some favorable de-regulation, local planning officials and inspectors who will view factory-built dwellings as the only real answer to the affordability crisis, and the re-emergence of chattel lending that provides a loan on a home without land. In the meantime, a few owners and operators have found attractive land and financing, and are making a go at some beautiful, new manufactured home communities. From Florida to Michigan and Texas to Montana, here are five prime examples of the latest among the much needed new manufactured home communities coming to the market. Mark Calabria, director of the Federal Housing Finance Agency, touched on the availability of housing during a talk continued on next page



COMMUNITY continued from previous page

at the Innovative Housing Showcase in Washington, D.C. this summer. “The average age of a house today is 35 years, which is the highest it’s been in over a century,” Calabria said. “We have single-family starts at about 15% less than they used to be. And so the bottom line is housing supply is not keeping up with demand in this country.”

New Communities in Development

The Resort at Canopy Oaks in Polk County, Fla. In Lake Wales, Fla., prospective residents at Resort at Canopy Oaks can buy a home for less than $100,000. “It’s going to be about a 1,000-site community with a mix of RV and manufactured housing,” Resort at Canopy Oaks President Tristan Farrell said. “Our first phase is going to be a 10,000 square-foot clubhouse, eight pickleball courts, and we’re going to have 200 acres that we’re not going to develop. It’s going to be pristine, Florida land that’s open for our visitors and residents.” Canopy Oaks is a former event space, having hosted music festivals and motorsports events. The property, at 16950 County Road 630, is near the golf links

at Indian Lake Estates. Canopy Oaks residents will have the option for special pricing at Indian Lakes, as well as access to golf carts and use of a cart path that leads from the property to the course. The new community also will have a fitness center, activities such as clay shooting and pottery, outdoor areas for fishing, bocce, shuffleboard, a dog park, as well as an outdoor tiki bar and a general store. “Our general store will be on the property near the clubhouse,” Farrell said. “We will have rentals for golf carts and kayaks, and the store will also carry everyday essentials.”

Homes at Resort at Canopy Oaks Canopy Oaks has been working closely with Champion for multi-section manufactured homes. Farrell said he calls the homes he’s been working on bringing in “snuggle wides”. “They’re short double-wide homes, about 50 to 60 feet long,” Farrell said. “We’re going to put porches on them and have parking in front of the home.” Resort at Canopy Oaks is set up to be a 55+ retirement community. New homes will be on-site and open for tours by the fall of 2021. Farrell said he and his

Resort at Canopy Oaks this summer welcomed potential home buyers and RV customers for a sneak peek of the property. Photo courtesy of Resort at Canopy Oaks.


team opted to open in spring of 2020 with recreational vehicle slips as a way to get customers on the property and considering a new manufactured home. “We’ll do that manufactured housing part in segments of about 100 homes,” Farrell said. “It will take three to five years to sell out 350 sites. But once we start, it won’t stop. Demand is such that we don’t really worry about how many we can sell. It’s really more about how many can get from the plant.” In addition to working with Champion, Resort at Canopy Oaks also is looking at homes from Palm Harbor and will consider other builders as the development grows.

Alta Vista is a New Community in Traverse City, Mich. A new manufactured home community, Alta Vista, has broken ground in Traverse City, Mich. The community is located just east of the intersection of a pair of heavily-trafficked arteries, Hammond and 3 Mile Road. A shopping plaza, pharmacy, daycare center, ice hockey arena and an elementary school, two middle schools and one pre K-12 school are all within a 5-minute walk of the community. The 80-acre site is mostly meadows surrounded by a thick, heavily wooded band of hardwood trees laced with wetlands. The site elevation is high, giving some Alta Vista residents a seasonal view of East Grand Traverse Bay. The developer, R.C. Hermann, acquired the site from an estate in 2018. Site plan approvals and zoning were approved in the spring for a three-phase community with a total of 165 homesites. Hermann developed another manufactured home community, Woodcreek, just one mile from Alta Vista with 224 homesites, which are 100% leased. Woodcreek received an award from MHI for the “Best New Community in the United States 1999” when the first phase was completed. Both Woodcreek and Alta Vista were designed by industry veteran Donald C.

Westphal, of Westphal and Associates, from Rochester Hills, Mich. Zoning, siteplan approval, and engineering services are being provided by Mansfield Land Use Consultants of Traverse City. Hermann claims he just got lucky in discovering the site. The property is ringed by dense woods and from the highway, and you don’t know what lies beyond the wooded areas. “I’ve driven past that frontage hu nd r e d s of t i me s w it hout a second thought…,” Hermann said, “Until my engineering firm brought it to my attention.” Hermann plans to pattern Alta Vista after his Woodcreek development and sell all multi-section homes with attached garages, under-ground sprinklers on fully landscaped lots. The homes will sell in the $125,000 to $195,000 range, including attached garages and other options. To sell the homes, Hermann has his own licensed in-community retail operation, Better Living Homes of Traverse City. Homes are being manufactured by Commodore Homes and the Schult line of homes by Clayton Middlebury, both located in northern Indiana. “We also have excellent relationships with local lenders so competitively priced 15-year loans are readily available,” Hermann said. “Local lenders have had a sterling experience with our Woodcreek homeowners, so they are not at all shy about providing financing to our Resort at Canopy Oaks homeowners.”

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What Can Be Found at Alta Vista? Traverse City is a high cost, upscale resort area in Northwest Michigan. Affordable housing is scarce to the point where it has contributed to an acute labor shortage. “A $150,000 manufactured home at Alta Vista would cost $300,000 and up if it’s stick built,” Alta Vista General Manager Mary Carboneau said. “This cost advantage is the perfect solution for the demographic we are marketing continued on page 25 MHINSIDER.COM • SEPTEMBER / OCTOBER 2019 • MHINSIDER™ |



continued from page 23

to: the service sector worker, empty nester and retiree. “We also want to make Alta Vista living as carefree as possible, so we offer a complete menu of maintenance services to our residents,” she said. “We can even winterize our residents’ home when they leave in the fall and reopen it, reconnect all utilities and air it out just before they return.” Alta Vista residents will have the use of a 5,200 square-foot clubhouse, fitness center, woodshop, outdoor pool, deck and fire pit, basketball, pickleball and tennis court, community garden, dog park and hiking trails. Hermann is a 30-year veteran of the development industry. “I’ve endured some brutal economic swings over the years, but I’ve survived by always being in the top 5% of the market in terms of location, quality of construction, value and affordability,” he said. “When times get tough it’s a lot easier to lure tenants from competitive properties and keep your property full. Alta Vista definitely meets that criteria.”

West Evergreen Estates in Kalispell, Mont. Brothers Mike and Garry Seaman are developing a 122-lot manufactured home community on 33 acres adjacent to a local public school in Kalispell, Mont.

It’s the first such proposed community in years, and gained approval in the spring. Mike Seaman is the owner of Patty Seaman Homes in Kalispell, and Garry Seaman is an area attorney. The property, at 74 West Evergreen Drive, is used for agricultural purposes but has been redesignated for two-family residential zoning. Early plans for the community include lot widths of 50 feet or better and lots at 5,000 square feet or wider for a single-section home, and 6,000 square feet or more for a multi-section home. West Evergreen Estates is breaking ground and will be developed in two phases with about nine acres of land left open for common recreational space.

Stonegate Manufactured Housing Community Chase Gardaphe owns and operates Stonegate Manufactured Housing Community in Midland, Texas. The 171-home community has served Midland well, which prompted the developer to put in plans for a new, larger community to be developed across the street. The new all-ages community is planned for 50 acres near Fairgrounds Road, which gained approval in July. Stonegate will include amenities such as:


• Beautiful downtown views • In-ground swimming pool • Community basketball court • Community mailboxes • Paved parking • School bus stop • EZ Rider stop • City water and sewer • Landscaped entrance • Convenient trash drop-off • On-site maintenance • On-site manager • Dog-friendly (most breeds) Gardaphe said the new development will be larger than its predecessor, with as many as 600 new home sites. Single-section manufactured homes, multi-section manufactured homes and potentially some tiny homes will be used to fill the community.

Vista Lago Estates Another new community, this one in Texas’ Guadalupe County, will provide the area with 700 new manufactured homes in a community setting. Vista Lago sits at Farm-to-Market Road 725, and includes 145 acres for development. MHV


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Call Mark Kassab at 248-865-0066 | MHINSIDER.COM • SEPTEMBER / OCTOBER 2019 • MHINSIDER™ |



Manufactured Home Community Best Practices An Operations Q&A with Industry Veterans

Ernest Schroer, a past president

Brad Shechtman is a principal at

of Western Manufactured Housing Communities Association, owns three mobile home parks — two in California and one in Arizona — with about 600 spaces between them.

American Mobile Home Communities, an owner and operator of manufactured home communities in Illinois, Wisconsin, Indiana, and Kentucky.

Eric Flood is a third-generation

Ken Fister is owner and general

community owner who operates 2,065 lots in Wisconsin.

manager of Suburban Mobile Home Park, a family owned community in Kentucky with 546 lots.



‘Management can be visible by being physically present in an on-site office, by frequently walking and driving around the property and by talking face-to-face with the residents.’ –Brad Shechtman, American Mobile Home Communities

What are the best ways to maintain positive relations with residents?

Start by treating every resident with respect, and expect the same in return. If a resident comes to you with a question or a concern, always give them your full attention and then always follow through on what you have promised to do. Communicate with your residents — through email or a newsletter, for example — and that will help generate positive relationships.

-Ken Fister

Value. Our main goal is to provide services that translate into added value for our residents. We know that if we can provide that value, the residents will know how much we genuinely care about their level of satisfaction with their community or home.

-Eric Flood

Our philosophy is to treat our tenants like customers.

We believe that a well-maintained community creates pride of ownership and inspires our tenants to maintain their home sites. Communication is a necessity to preventing misunderstandings.

-Ernest Schroer

Be visible and listen. When owners and managers are visible and present in the community, it conveys to the residents that management has the interests and well-being of the homeowners in mind. Management can be visible by being physically present in an on-site office, by frequently walking and driving around the property and by talking face-to-face with the residents. A sense of security and satisfaction is created by knowing that someone cares about resident concerns and wants to uphold property values. By being at the property, positive relations will result by simply listening to your residents’ concerns and complaints. Immediate resolutions are not necessary for every resident

complaint, but always empathize and offer a solution or explanation, if possible. For example, a resident may complain about an overgrown tree that poses no direct harm to anyone. Management can respond so that the tree can be placed on a list for possible future tree trimming. The resident in this instance will attain satisfaction by knowing that their complaint has been heard by management and that the problem can be addressed in the near future. Communicate. Residents need to be periodically reminded about the rules and policies pertaining to living in a manufactured home community. There are a variety of ways to disseminate the information such as periodic mailings, automated calls, postings in common areas and newsletters. Residents appreciate living in a community with rules because it helps to maintain property values. They also like it when management addresses instances of rule violations because there is an expectation that the rules are to be continued on next page



COMMUNITY continued from previous page

abided by all residents. Communication of the policies and rules of the community reinforces this expectation. Be prompt with property maintenance. Good relations will result when community maintenance problems are handled quickly. Tree trimming, pothole repair, community lawn mowing, sign replacement and weed spraying must be handled in a timely manner. These maintenance issues are very noticeable to the residents and their guests, especially as they drive in and out of the property. Compliment your residents. Residents like to receive compliments, and it costs nothing to give one. If an owner or manager happens to observe a well-maintained home or lot, the resident should be commended about how great it looks and that it is appreciated. The entire community will benefit when homes and lots are kept up, so it should be pointed out by management as often as possible to encourage this action.

-Brad Shechtman

How do you engage with municipal governments?

When I engage with our local government, I have found it is easier to comply with their requests than to fight city hall. For example, if the county clerk asks for documents that are not required by law, I provide them anyway.

-Ken Fister

We promote local government events and outreach programs. We pay attention to local government issues that may have a positive or negative impact on our residents and advocate when necessary. We pay special attention to any proposed fees, charges, assessments or taxes. This goes back to maintaining positive relationships with residents. This is an excellent opportunity to provide value to your residents!

-Eric Flood

I try to meet the local politicians in my area before there are issues. When a situation arises, they already know me and


are more likely to listen to my opinion. Mobile home owners’ associations are the best resource for being introduced to community leaders.

-Ernest Schroer

Meet your local officials. Local governments should be a supporter of the community. Hopefully, local officials understand the important role that affordable housing plays in their area. Owners should try to spend some time meeting with local inspectors or other officials if they happen to be at the property. It’s best to be courteous and professional with local officials to develop a good rapport. They will be more willing to provide leeway and flexibility on matters that come before them if a good relationship exists. Understand that they are not there to just regulate the business but truly want to make the town they work for a better place to live.

-Brad Shechtman


What advice would you give to new community owners?

their seminars. Use their forms in your community. Make changes slowly.

The best advice I can give new community owners is what worked for me. Get involved with your state manufactured housing association. The office and its members are a great source of information on our industry!

-Ernest Schroer

Reasonable rent increases. Owning a community is a business with continually increasing expenditures for maintenance and capital improvements. Rental income therefore must increase annually to cover these increasing costs. Most residents accept that rents will increase, so long as maintenance is kept up and improvements are made in the community. If an annual rent increase is larger than normal due to a large capital expenditure, make sure the reason is communicated to the residents. Unfortunately, new investment groups in the industry sometimes raise rents too excessively upon taking over ownership of a property, which results in angering the residents. There have been instances of $100-per-month rent increases in some communities upon a new owner

-Ken Fister

Give people the benefit of the doubt. Most of the time, people just need patience and kindness and the chance to operate within the boundaries your company has set. Employ people who share that philosophy.

-Eric Flood

Communicate with your tenants — always. Misunderstandings may lead to bigger problems. Join your state mobile home park association. Attend their educational seminars; send your on-site managers to

taking over. This action will draw the attention of state legislators due to the numerous complaints generated from the residents, and it can ultimately lead to the introduction and passage of rent control laws at the state level. The majority of residents in communities have an annual income below $40,000, so there is a limit as to what they can afford each month. With income inequality on the rise, there will continue to be a strong push for rent control legislation in a number of states. Recently, New York strengthened its rent control law. Owners need to be reasonable with rent increases and initiate them over time.

-Brad Shechtman

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When the Community Comes with ‘Notes’ By Jeff Barringer & Marc Lifset


hen a community or portfolio of communities is being acquired, it is common for the purchase to include notes, installment sales contracts or leases with option to purchase on the manufactured homes. It is important for the purchaser to be proactive in evaluating the paper to determine its quality and the potential regulatory risks associated with the acquisition. We generally recommend that issues related to the portfolio be addressed in the purchase and sale agreement and that regulatory due diligence on the portfolio is performed. When it comes to the purchase and sale agreement, a contingency clause to the effect that the sale is contingent on the purchaser’s satisfactory review

of the seller’s chattel paper, site leases and home leases should be included In addition, we recommend building in additional protection in the form of sellers’ representations and warranties regarding compliance with applicable law, enforceability and lien perfection, ensuring a properly noted lien that will take priority over other claims. Finally, we recommend including an indemnity provision that survives the closing. Next, we recommend a review of the underlying paper. The first step is to review each transaction and identify whether it is a retail installment sales contract, promissory note and security agreement, or lease with option to purchase. It is important to undertake

this review as soon as possible. Notably, the purchaser may need to be licensed to take assignment of the transactions, with the licensing type determined by the type of paper involved, the state or states involved, who the original creditor was, who the seller of the paper is, the interest rate or finance charge, and whether the purchaser will take assignment of the servicing rights. Potential licensing types include sales finance company licenses, consumer loan licenses, residential mortgage lender or mortgage banker licenses, and/or mortgage servicer licenses. Undertaking a licensing analysis early may allow for changes to the structure continued on next page



COMMUNITY continued from previous page

of the transaction to be negotiated. For promissory notes or leases with option each transaction are appropriate, that all example, if a license is required to hold to purchase on different forms, sample required state and federal disclosures are servicing rights, but not the underlying transactions on each form should be being given and that appropriate federal note, then arrangements disclosure — Truth In Lending could be made with a duly Act Disclosure or Consumer When it comes to the purchase and sale licensed servicer to take Leasing Act — were given in assignment of the servicing connection with the transacagreement, a contingency clause to the rights. In addition, if licenses tion. The underlying terms of effect that the sale is contingent on the are required, it is important to the transaction should also begin the application process be reviewed for compliance purchaser’s satisfactory review of the early and address licensing-rewith applicable law. Finally, lated issues in the agreement the servicing file should also seller’s chattel paper, site leases and with the seller. Notably, the be reviewed to assure that home leases should be included. licensing process can be transactions are being sertime-consuming, can take viced according to their terms several months and may require that reviewed. As part of this review, the and in accordance with applicable law. sensitive information about key indipurchaser should review the origination Often, compliance violations may carry viduals associated with the purchaser file to confirm that it contains all of the assignee/holder liability. In addition, be submitted to state regulators. appropriate documents, including the if an assignee services transactions After licensing issues are evaluated, we original note, installment sales contract, according to their terms and, thereby, generally recommend that due diligence or lease with option to purchase agreeexercises remedies or assesses fees that be performed on the underlying paper. ment, as well as the original certificate of are not permitted by applicable law, the This review should include a sampling title or lien certificate and proof of hazassignee may have legal or regulatory of each type of transaction involved. If ard insurance. The samples should then exposure in the form of UDAAP, UDAP, there are installment sales contracts, be reviewed to assure that the terms of or other claims. When forms are populated by hand, it is prudent to review each file for scriveners’ errors or blanks that materially alter the intended terms of the transaction. For example, we have seen the default interest rate field in a portfolio of promissory notes erroneously left blank and, as a result, contractually providing a 0% interest rate in the event the borrower defaults. In addition, with respect to notes and installment sales contracts, due diligence should include confirmation that the underlying agreements create a security interest in the home being financed, as well as confirmation that the security interest is properly perfected. With respect to lease transactions, it is common to see transactions styled or papered as leases with option to purchase that would likely be re-characterized as credit sales under state and federal law. As part of any review, it is important to review those transactions closely. Notably, if a transaction is re-characterized, the wrong federal disclosures would have been given, the terms will not comply 32 | MHINSIDER™ • SEPTEMBER / OCTOBER 2019 • MHINSIDER.COM


with the applicable retail installment sales act, and additional licensing may be needed. Finally, a purchaser’s duties do not stop at the time of closing. The purchaser will need to assure that it has the capacity, ability, and technology to service the acquired portfolio in a compliant manner or that an appropriate vendor/ servicer is engaged. The purchaser will also have post-closing disclosure obligations, including the requirement to provide privacy notices and a mortgage transfer notice. The failure to comply with these disclosure obligations could expose the purchaser to liability.

These steps are prudent, if not imperative, as they will allow the purchaser to understand the legal and regulatory risks associated with the acquisition and to make an informed decision regarding whether to proceed with the purchase and for what price, particularly if the due diligence identifies systemic issues in the portfolio. While due diligence will take time and have an expense on the front end, the time and expense of an appropriately tailored due diligence should be far less than the expense associated with a regulatory/attorney general investigation or legitimate actions, counterclaims, or defenses in consumer litigation. MHV

Jeff Barringer and Marc Lifset, members of McGlinchey Stafford, practice law in the area of consumer financial services and regularly assist mortgage lenders, manufactured housing lenders , community owners and operators , and other industry p a r t i c i p a nt s on issues related to manufactured housing finance.


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Nonprofit MHCs Innovative Solutions to Support Non-Traditional Ownership of MHCs By Jose Villarreal


nder the Duty to Serve initiative, Fannie Mae has an important role in developing solutions to address several critical housing challenges for underserved communities, including manufactured housing, affordable housing preservation, and rural housing. The Duty to Serve initiative has provided an opportunity to develop innovative products and ideas. Manufactured Housing Communities (MHCs) are a reliable source of affordable housing for homeowners and renters in suburban and rural locations across the country, and Fannie Mae is working to think differently about how MHCs are viewed and financed. Manufactured housing is an important source of workforce housing. As part of our Duty to Serve plan, we have developed new strategies to support non-traditional owners of MHCs. Fannie Mae conducted extensive outreach and research to identify opportunities to serve nonprofit entities that own — or are planning to own — MHCs. In addition to identifying several opportunities for nonprofit-owned MHCs, our research concluded that to

acquire and preserve MHCs, nonprofit entities rely on a patchwork of capital resources ranging from private loans to tax-exempt bonds. The process to get such funds is highly competitive, timeconsuming, and costly. MHC residents largely make 80% of area median income or less. In many suburban areas, land value has risen, creating an attractive selling option for MHC owners. Once sold, new development tends to be commercial or traditional apartment dwellings, which reduces access to affordable options for many residents. The problem worsens in rural areas where MHCs are older and in need of upgrades — reinvestment in properties that owners are often reluctant to finance. Non-traditional and nonprofit ownership structures are a useful option that allows nonprofits to purchase and preserve MHCs with a stronger incentive to complete necessary repairs in rural communities. In 2019, Fannie Mae began testing a product enhancement specifically for resident-owned communities, as well as a new product enhancement that lowers financing costs and provides third-party

report reimbursement for nonprofit MHCs. This product provides nonprofit owners with a guaranty fee discount of 7.5 basis points and a servicing fee discount of 7.5 basis points, as well as up to $10,000 in reimbursement for third-party reports such as appraisals and environmental assessments. Fannie Mae has been a leading source of liquidity for manufactured housing transactions since 2000. As part of our Duty to Serve plan, we are continuing to develop new strategies to support manufactured housing communities and the people who live there. 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.






Advice for New Community Owners Do These Five Things Immediately After Purchasing A Community By Michael Power


o you want to get a f lying start after you purchase and close on you r nex t ma nu fact u red home community? I will share with you the first things I do when I take over a community. But let me begin by invoking a pearl of wisdom that I came across in the New York Times years ago. Well-known humorist Sam Levenson was being interviewed and made this statement:

“You must learn from the mistakes of others. You can’t possibly live long enough to make them all yourself.” I have been the operating partner in 25 communities for 30 years. I have learned from my mistakes, and I have sought out knowledge from other like-minded and successful operators. I have become an expert at taking over and doing quick startups. continued on next page

‘The goal is to create a list of any and all improvements, neglected maintenance and the like that, as the owner, it falls on you to address.’ –Michael Power,



COMMUNITY continued from previous page

The following are the first five things I do when I take over a community.

1. Create a list of ALL improvements needed. 2. Invest the first 30 days completing as many visible tasks as your budget allows. 3. Choose, with your new manager, the five most cluttered resident lots in the park. 4. Implement a plan to create 100% resident compliance for “curb appeal” within 30 days. 5. Adopt a zero-tolerance policy on collecting resident rent. With that, let’s continue in more detail.

Create a list of all improvements.

This is a two-person task, so set up a morning time when you are fresh and meet up with your new manager or partner, key employee or, if you are a small or beginning operator, your spouse. The goal is to create a list of any and all improvements, neglected

maintenance and the like that, as the owner, falls on you to address. Forget your start-up budget for this step and create a template of all projects that you can choose from, as time permits. Items such as signage, landscaping, vacant home and lot issues, fencing, roads. Everything! The first 30 days. From your master list of projects, choose the ones that will give the most visible impact to your residents, and keep within your start-up budget. Show your residents that change is coming, and you are willing to make the first good-faith efforts. Again, the key is to start with visible items such as entrance signage, landscaping, and clean-up of common areas, vacant lots and around any vacant homes. They won’t care unless you show them that you care! The five most cluttered lots. With your new manager, choose the five worst looking resident-occupied lots. Look for things such as junk, clutter, bikes and


toys laying around, undrivable cars and the like. Now, here is the special trick when choosing. First, choose the three most unsightly lots that are closest to the entrance or are in some other highly visible location. Second, let your manager in on your intent to soon require that each and every resident clean up their lot. Ask your manager to name the two residents who are most likely to cause them or a neighbor to say, “You will never get John or Bill and Mary to clean up.” Add those lots two with the top three unsightly locations and you’ll have a great strategy for getting the community in order. 100% resident compliance. First, create a one-page flyer on your community policies. Go with your manager, stand across the street and take pictures of the front and sides of each of the five homes. Print the pictures and circle the violations. Then, with your manager and maintenance person, make a personal visit to the five worst junk and clutter


offenders in the community. Give them the pictures and ask them outside so you can show them directly. Inform each of them that a community-wide clean up is coming the following week. Explain that if they agree, you will provide helpers, at no cost to them, to clean up, haul off, cut, trim or do whatever is needed to get their lot in compliance with community rules. If not, they will have to do it on their own the following week. If they fail to comply at all, they will be required to vacate the community and live elsewhere. Be firm, but friendly. Give them 24 hours to agree, and then recruit enough helpers to get the five lots in compliance within a week or two. Second, drive through the park and take a picture of each home that has a compliance issue. Create a “be a good neighbor” letter, explaining the community-wide cleanup requirement. Give out the pictures and letter to each resident on a Wednesday, and explain that they need to complete changes by Sunday night for a manager’s inspection on Monday. Keep in mind that by this time they will have seen that the five worst offenders have cleaned up. The

impression in their mind is that if you will get those people to clean up, you will ensure that they do the same. Don’t worry about people asking you to help them. Most will not be aware that you provided help to the five worst offenders. Inspect on Monday. If not done, give a 48-hour notice and re-inspect on Thursday. If the resident still has not complied, give a notice of non-renewal of their lease. Ask the manager to tell those who have not complied to get it done by that weekend. Expect 90% compliance!

Zero tolerance collection policy.

You have now changed the appearance of the community in a positive way. It has become a more desirable place to live. Don’t listen to any more sob stories. If people need extra time to pay, they have it while they wait for the non-payment eviction court process. Tell the residents to treat it as a payday loan. For the court cost, they get an extra 10 days to pay. On the sixth day of each month, deliver your state’s statutory three-, six- or 10-day notice to pay. Note: Do not accept any partial payments. Put that in your community policies, and return any partial payments with a copy of their bill.

Four days later, give out a 48-hour reminder to pay before court filing. Wait an extra day, and then file in court for each person who has not paid in full. Create a friendly letter to attach to each notice. “We know people can have hard times and get behind. We are not angry but instead want you to catch up and pay before the court date.” These five steps will help you provide a better place for people who need or want affordable housing, as well as create a profitable investment! MHV Michael Power is president of 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 i n t ra n s a c t i o n s across the United States and mentored community owners on operations.​​ Email him at MichaelPower



COMMUNITY Photo courtesy of Equity Lifestyle Properties


Selling a manufactured home community to family can get complicated By Matt Milkovich


rett Danko has been advising small-business owners for a long time, long enough to know that when it comes to succession — helping them decide who will take over the family business — he has to be more of a “financial psychologist” than a financial planner. Danko is a certified financial planner and managing member of Main Street Financial Solutions. He also partners with GENCapital, an Atlanta-based wealth management firm. He discussed business succession during last October’s Southeast Community Owners Symposium in Atlanta. MHInsider followed up with Danko afterward to learn more about the financial and emotional obstacles that can impede a successful business succession plan — and to learn about some of the obstacles that might be unique to selling a manufactured home community. “A lot of people think, ‘someone will just buy my business,’ but these things

take a long time,” Danko said. “I’m shocked at how many people don’t have all their ducks in a row before they even start the process.” He said there are many ways to transfer a business besides simply selling it. Options include a family partnership, S corporation, self-cancelling installment note or charitable remainder trust. “If you sit down with a good adviser, they can talk to you about these things,” Danko said. “Yes, it’s boring. Yes, your eyes will glaze over. But it’s important to explore these options.”

The Tough Questions

The “financial psychologist” part starts at the beginning. As an adviser, he has to figure out what the owners want. But all too often, the owners don’t know what they want. They haven’t asked themselves the tough questions. First and foremost: What will happen to the family business if I die, or become disabled, or start to slip mentally?


Brett Danko, Main Street Financial Solutions

“When (the owner is) not there, the whole family can crumble,” Danko said. “I’ve seen it over and over again. Cousins aren’t talking anymore because the matriarch and patriarch didn’t handle it properly. Because it’s hard to talk about this stuff.”

Contingency Plan

To prepare for the unexpected, the first thing you need as an owner is a contingency plan. As part of that plan: • M ake sure you have access to capital — cash reserves, a loan, or something similar. • D esignate someone trustworthy to take over management, at least temporarily. • Proper estate documents are a must. • G ra nt power of at tor ney to someone you trust. • You also need a good lawyer, certified public accountant and financial adviser. “Good ones will save you a ton of money,” Danko said.


Family Matters

There are other questions owners should consider before they hold the all-important family meeting: If I’m thinking about selling, what do I want to do afterward? Where do I want to live? What will be the source of my income? And if they’re contemplating transferring the business to a child or a sibling: Do I want them to take over the business? Do they want to take over the business? If I gave them the choice between cashing out or taking over, which would they prefer? And if there’s more than one child, how can I split things fairly? Sometimes, grown children join the family business because they’re newly divorced, or broke, or down and out for some other reason. They’re not there because it’s their passion. And if they don’t know what they’re doing, or don’t care, it could cause friction with other employees. “You know in your heart of hearts whether your children or siblings would

be good at running things,” Danko said. “You want them to want to be there.” If you don’t think your children want to take over your business, one option is to sell it and invest in something they are passionate about, he said. But if they do want to take over the business, Danko had this advice: • Make clear how involved you expect to be after the sale. Will you stay away, or can they expect you at work every day? • Set them up in a good cash position. The more they have to spend buying your business, the longer it will take them to get ahead. • Whatever arrangement you make, account for estate taxes.

Raising Rents?

If you end up selling your manufactured housing community to an outside company, Danko said to be wary of this potential pitfall: The new owner could

start raising rents higher, and faster, than you might like. In most other industries, if a new owner raises prices, customers can always choose to switch to a competitor. But if residents of a manufactured home community can’t afford the new rent, their housing alternatives might be limited. “People who own their own businesses might work with a customer who’s in trouble. I’m not saying larger corporations won’t do that, but they’ll do it less,” Danko said. “They’re here to make money.” One way to avoid that problem is to make an agreement wherein the buyer can only raise the rent by a certain amount for a certain period of time. Including an agreement like that in the sale of your community might lower the price you get for it, but it could buy you peace of mind, Danko said. MHV








FOCUSED ON SMALL COMMUNITY OWNERS For More Information About the Symposium, Visit SECO19 will be held Oct. 9-10 at the Hilton Atlanta Airport and pre-SECO workshops are scheduled for Oct. 8. Attendees of the symposium will learn from industry experts and find new products and services to increase their efficiencies and bottom lines. They also will network with hundreds of community owners and managers from throughout the country.

SECO (South East Community Owners) started out as a small group of community owners, mainly from the Atlanta area, who would meet for a few hours to discuss problems and issues they all shared. From those beginnings, the group’s annual symposium has turned into one of the largest manufactured home community meetings in the nation. These days, SECO retains the same focus — helping community owners be the best they can be; as well as improving the industry through better management. “I bought my first park six months before the SECO event,” said Justin Morales, an acquisitions manager for Precision Capital. “The information and the contacts I made at the 2018 SECO event were priceless. I am certain that attending SECO has saved me tens of thousands of dollars in mistakes I would have made.”

The Conference For Community Owners, By Community Owners 44 | MHINSIDER™ • SEPTEMBER / OCTOBER 2019 • MHINSIDER.COM

The goal of SECO’s 2019 conference is to help community owners stay on top of the latest industry innovations and best practices. The 2019 event will cover a wide range of topics, including passive investing, liability, RV parks, succession planning, lessons learned, financing, new technology, maximizing social media, and rent vs. selling. The roundtable discussions will return, along with the popular "1 Minute Money Makers" and “Lessons Learned by Newbies”. “The first time I went to SECO, I was blown away at how welcoming and friendly the people were, not to mention the value in the content,” said Brian McDonald of CCIM Crestone Capital Partners. “The networking has been phenomenal — in fact, I ended up joining a team of people I met there! Good things happen at SECO!”

SECO, a 501(c)(3) nonprofit organization, supports U.S. veterans living in its communities through its Veterans Assistance Program. From the profits of its 2018 symposium, SECO gave $3,000 to an exMarine living in a community in Wildwood, Fla.


SECO19 Agenda Information SECO organizers have been programming the annual gathering for about a decade now, and in that time have landed on a formula that works for owners of small to midsize communities, but also for other manufactured housing professionals who seek guidance. The educational format at SECO falls into four categories: Pre-SECO workshops, solo presentations, panel discussions, and roundtable discussions. “Workshops are ‘roll up your sleeves and get into the details’ presentations on specialized topics,” event cofounder Spencer Roane said. “At SECO19, one of Atlanta’s premier regional accounting firms will have someone out to talk about keeping the money you make – topics like changes in the tax laws, accelerated write-offs, succession, and opportunity zones. Another session will discuss legal entities for mobile home parks and MH sales operations – LLCs, trusts, and master leases. The greatest take-away from SECO may be the ability to meet other community owners who are doing, or have done, what you want to do, and to learn from their experiences, failures, and successes,” Roane said.

Solo Presentation and Roundtable Discussions at SECO “Solo presentations during our two full days of meetings will be on such universal topics as internet marketing, industry updates, and ideas on bringing new life to older communities,” Roane said. “Lenders who finance mobile home parks and lenders who finance chattel will talk about their programs, priorities, and differences. Brokers familiar with the sales of mobile home parks will share their thoughts on value, cap rates, and buyer/seller priorities.” Roundtable discussions will be guided by experienced community owners who are ready, willing and able to answer questions about RV parks, self-storage, property valuations, renting versus selling homes, offering new versus used homes, creative chattel financing alternatives and some industry history. A key ingredient in the mix at SECO is the engaged participation of exhibitors and vendors that provide every form of industry product and service that may be useful to community owners. Plenty of time is allotted at SECO for attendees to visit and talk with vendors.

Roane said he and other organizers would like to have even the most seasoned manufactured housing professional go away with a list of ideas that generate revenue, cut costs, increase sales, and operate more efficiently.

Other topics on the SECO19 workshop agenda include: • A workshop on making the most of your photo and video images

• Filing vacant sites and upgrading communities with new or used homes

• Virtual staging of homes

• Conversation on conventional & lease-option financing

• Suggestions for the most effective use of online marketing • Operation of in-community chattel financing

• What to expect for default rates • Manufactured home lot prep and setup




Lunch Seating

GRAND SALON A-H Pre-SECO Workshop & General Session











105 106



99 107 108









12 11



Display Tables/ Breaks, Lunch, Reception





20 19



21 22



28 27



29 30



36 35



37 38





13 14












Buffet Tables



SECO19 EXHIBITOR LIST at time of publication

Company Name

Booth/Table #

Company Name

Booth/Table #

American Commerce Bank.................................1

Marcus & Millichap.............................................27


Tie Down.............................................................28

Credit Human........................................................4

Mobile Home Depot..........................................29


Tax Refund Services (Tax Max)....................... 30

Champion .............................................................6

Shaw Industries..................................................31

Affinity Solutions..................................................7

Refuse Specialists...............................................32

Rent Manager........................................................8

Tri-State Distributing.........................................33

Mobile Insurance..................................................9

Oliver Technologies............................................36

Home Care Plus..................................................10

Community Technology Services....................37

Water Systems...................................................11

Clayton Rockwell............................................... 40

Underground Infrastructure Solutions............12

VMF Homes........................................................ 99

N Tech Industries................................................13

The MHP Broker...............................................103

J & T Environmental Services...........................14

Cavco Industries/Fleetwood Homes............ 104

Tru Pulse USA......................................................15

Legacy Housing Corporation......................... 105

Affordable Home Services, Inc.........................16

Yale Advisors.................................................... 106

MHP Secure.........................................................17

Phillips Investment Properties.......................107

Heritage Distributing.........................................18

Vanderbilt Mortgage & Finance Inc.............. 108

Triad Financial Services.....................................19

Hazard Call........................................................ 109

Blevins, Inc. .........................................................20

Sunstone Real Estate Advisors.......................110

Park Lane Finance Solutions.............................21

Capstone Manufactured Housing.................. 111

ABT Water Management..................................22

Newport Pacific.................................................112


Colliers International........................................113

Rustique Enterprises, Inc...................................24


Clayton Savannah...............................................25


Purchasing Platform...........................................26

Clayton Homes..................................... Ogeechee




Sailing the Ship in All Weather for Kentucky Dream Homes By Josh Weston Photos Courtesy of Bozz’s Excavating

Brandon Boswell of Bozz's Excavation clears and levels a site and then pours a foundation for the arrival and placement of a new manufactured home.


randon Boswell recently made headlines in Owensboro, Ky., for his work ethic, entrepreneurship, and youth. At just 24 years old, Boswell has secured the concrete and foundation work for Kentucky Dream Homes, the largest manufactured housing dealer in central Kentucky. How does someone who studied welding in high school, and then worked as a boilermaker, come to run a successful excavation business in the manufactured housing industry?

Bos wel l ’s f i rst respon se w a s C.J. Troutman. He is the owner of Troutman’s Mobile Home Transport and Sales of Utica, Kentucky. He also got his start in the manufactured housing industry early, the second day after his high school graduation back in 1998. There are other similarities — and some differences — between Boswell’s and Troutman’s stories.


Origin Story Déjà Vu

“I’ve known Brandon since he was in diapers,” Troutman said of the owner of Bozz’s Excavating. “We were next-door neighbors. He’d come over and help at 13, 14 years old and work with me moving homes. Later on, when he came to me, I felt like I could bring a guy on. I opened the window and he climbed through.” Like Boswell, Troutman also got into the manufactured housing industry by first learning from an elder, in his case his grandfather, helping him transport mobile homes as a teenager before de-


ciding to make it his business as a young adult. Jake Troutman, whom Troutman calls Granddad, worked with his former protégé full-time, post-retirement, for 18 years. Troutman’s first mobile home delivery back in 1998 went smoothly, but on his second delivery, he knocked over seven mailboxes. “Granddad looked at me and said, ‘Son, you’re gonna have to do a little better,’” Troutman said.

C.J. Troutman. Troutman’s circle, 21 years in the making, is understandably bigger. He credits his grandma and granddad, who at nearly 90 years old

A Man, a Stuck Truck, and a Wheelbarrow

When asked about his most difficult job site, Boswell talks about the time six months into his work excavating and pouring foundations for Kentucky Dream Homes when the cement truck buried itself. “We had to move seven yards of concrete — that’s four thousand pounds — by hand,” Boswell said. How far? “I don’t know,” Boswell said. “But it was up a hill.” MHV Josh Weston is a Michigan-based writer with a background in construction and the trades. He covers the housing market, real estate, management, and finance for MHInsider.

Both Boswell and Troutman describe the

other as hard-working and smart, the sort of all-around competent person you can

trust to get the job done, and done well.

On-The-Job (SelfInitiated, SelfDirected) Training

Boswell, on the other hand, took more time to learn on his own. “I think my biggest challenge was going into my first day and not knowing a thing,” Boswell said. Boswell had never dug and poured a foundation before his first job for Kentucky Dream Homes. He learned what he could from YouTube and then figured it out in the field as he went, renting the equipment he needed from Troutman until he could afford his own. Today, Boswell can dig and pour a foundation in a day. But that first day, it took him and his brother 17 hours just to dig for the foundation. “Every time I drive past it, I look at it,” Boswell said.

Business as the Product of, not the Impetus for, Strong Support Network

Both Boswell and Troutman describe the other as hard-working and smart, the sort of all-around competent person you can trust to get the job done, and done well. But neither is quick to take credit for their accomplishments, each attributing their individual success to the team of people around them, their networks of personal and professional connections. For Boswell, only two years in, that network remains relatively small: his girlfriend, one full-time employee, and

still help run the rental side of Troutman Mobile Home Transport and Sales; his foreman, Les; his assistant, Baily; Mason Quick of Kentucky Dream Homes; and former Kentucky Dream Homes manager Joe Marchberry, who once told him, “Son, if you’re going to be in this business, you learn to sail ship in all weather conditions.”

Aggressively Seeking Properties to Buy Manufactured Home Communities Land leased communities with 100+ sites in strong markets, nationwide Serious sellers contact:

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Skyline Champion Has High Hopes for its New Louisiana Facility By Matt Milkovich

Photos Courtesy of Skyline Champion Corporation


kyline Champion’s new production facility in Leesville, La., started production on its first house on June 3. Still in the process of earning HUD certification, the plant had pulled one house off the line by July 12, and was expecting to start producing one house a day by the following week. If everything goes according to plan, the plant would be HUD-certified by August, according to Wade Lyall, vice president of Skyline Champion’s southern region. In the meantime, inspectors were walking the line every day, studying the production process, scrutinizing all documentation, making sure everything met HUD’s expectations before the plant earned its certification. “Ramp-up of a plant is very intense,” Lyall said. “It’s like that for every new start-up. We’re training people as we go.” When certified and at full capacity, the Leesville plant should be able to produce eight houses a day, he said. The Leesville plant is about 120,000 square feet in size. There’s a second production facility down the road that’s about 100,000 square feet. That plant isn’t operating today, but it could be used in the future, Lyall said.

continued on next page



The Leesville facility is the sixth production line added by Skyline Champion within the last three years and supports its focus of growing capacity in markets with high demand for quality attainable housing. MHINSIDER.COM • SEPTEMBER / OCTOBER 2019 • MHINSIDER™ |



continued from previous page

Bringing On Leesville

The match between the city of Leesville and Skyline Champion was ideal. Leesville was the home of two idle production facilities, which had produced manufactured homes until the early 2000s. The city was looking for a company to take over the plants and hire local workers, Lyall said. Skyline Champion had to spend a few million dollars to retool the plants, Lyall said, but that was much cheaper than building new facilities from scratch. “It was an easy start-up from that perspective,” he said. “Not many markets have an existing plant that’s big enough. This fell in our lap.” Lyall said the Leesville government has been “phenomenal”. Mayor Rick Allen wanted Skyline Champion there from day one and knew the city and its surroundings could supply the workforce the company needs. The state government was helpful, too, providing support and training via Louisiana Economic Development. The new facility will build both Skyline and Champion brand, single- and double-section homes. At the time Leesville approached Skyline Champion about occupying its idle plants the manufacturer was grappling with a “robust backlog” of orders. Hurricanes and flooding had hit Texas and other parts of the South and Southwest, and there

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was a heavy demand for temporary emergency housing. In the short term, the manufacturer wanted to deal with that backlog. In the long term, it wanted to supply a state, and a region, that buys a lot of manufactured homes but has had to bring in many of them from other parts of the country. A plant in Louisiana will cut down on those shipping costs, Lyall said. “I think that market will stay strong,” he said.

Skyline Champion Finds the Needed Labor

And Leesville’s labor market was as responsive as the mayor predicted. Skyline Champion held a job fair before it acquired the production facility, and learned pretty quickly that the region would be able to supply its labor needs, Lyall said. “There was clearly a strong workforce with construction experience, that was not scared of manual labor,” he said. Once Skyline Champion acquired the facility and started hiring personnel, it held a second job fair. More than 300 people showed up. The plant currently employs about 100 people. As it ramps up production over the next year or two, it could end up employing more than 200, he said.

Experienced Leadership and New Technology

The new plant also has experienced leadership. General Manager Tom Stoneburner has been in the industry for more than 30 years and has managed several plant startups. “He knows what it takes to get off the ground,” Lyall said. Other supervisors also have industry experience. That’s fortunate because the rest of the team is “fairly green” when it comes to manufactured housing. The workers may have a lot of construction experience, but their experience with the HUD Code and assembly lines is limited, Lyall said. “We have to train them every day,” Lyall said. “It’s going well, but it doesn’t come without challenges.” The new plant is working with new technology, as well. Skyline Champion purchased a machine, unique to the Leesville plant, that builds both sidewalls and floors. Typically, manufacturers build their sidewalls and floors on separate tables in different parts of the plant, but the new machine allows for building walls and floors in sequence. Partially automated, the machine will reduce the need for labor, reduce man-made mistakes, save material usage and improve the quality of construction, he said. “There’s a tremendous benefit to the new machine,” Lyall said. “We hope to pass the savings on to the end consumer.” The company also purchased an automated panel saw for the Leesville plant, allowing it to precut floor decking and sidewall panels to feed the new machine. The new saw also will save on labor and material costs, Lyall said. MHV Matt Milkovich has an extensive journalism background. He was managing editor of MHInsider, two agricultural trade magazines for several years, and before that served as a reporter for local newspapers in Michigan.


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Fannie Mae Program Incentivizes Tenant Protections By Matt Milkovich


nder the Duty to Serve initiative, Fannie Mae has been researching ways to aid residents of manufactured homes. One way is to provide incentives for borrowers (community owners) that encourage them to create protections for the residents of their communities who own their home but rent the land it sits on. Bob Simpson is Fannie Mae’s vice president of affordable and green financing. “Manufactured housing, the largest source of unsubsidized housing, is one of the best opportunities for folks to own a home, and start a family,” Simpson said. In the course of its research, Fannie Mae found there were few state or local laws to protect residents of manufactured housing communities.

To help fill that void, Fannie started working with borrowers, lenders, and tenants’ rights activists to figure out what protections to include in its loan incentive packages for the secondary market, Simpson said.

Mae found there were few state or

with a pricing incentive,” Simpson said. “Implementing these protections is a good thing. This has not happened in the market before. “By having these protections in place, you’re providing more stability for the folks who lease pads,” he said. “We hope over time this leads to a more stable community — people who live there longer. That’s the basis of the idea.”

local laws to protect residents of

Required Protections

In the course of its research, Fannie

manufactured housing communities Tenant Site Lease Protections Pricing Incentive

The new program is called the Tenant Site Lease Protections Pricing Incentive. “If you voluntarily agree to do this in your community, we provide you


Fannie Mae provides a pricing incentive for borrowers who implement all of the following MHC protections for tenant site leases: • One-year renewable term for the site lease • 3 0-day w ritten notice of rent increases • F ive-day grace period for late rent payments


• R ights of the tenant of a site lease to: sell the manufactured home without having to move it out of the MHC; sublease the manufactured home or assign the site lease to a buyer, provided the buyer meets the minimum MHC rules and regulations and credit quality for financing; post “for sale” signs on the manufactured home, provided the signage complies with the MHC rules and regulations; sell the manufactured home in place within 45 days after eviction; and receive at least 60 days’ notice of any planned sale or closure of the MHC


Benefits of the incentive program differ with the percentage of Tenant Site Lease Protections (TSLPs) implemented by the borrower. Borrowers who implement TSLPs on at least 25% of their site leases will receive: • A g uaranty fee discount of 5 basis points

• A ser v icing fee discount of 5 basis points Borrowers who implement TSLPs on at least 50% of their site leases will receive: • A guaranty fee discount of 7.5 basis points • A servicing fee discount of 7.5 basis points • Up to $10,000 in reimbursement for third-party reports

Where the Programs Begins

So far, one community in Ohio has obtained a loan using Fannie’s incentive package. Simpson defined success for the initiative as “achieving broader market acceptance of enhanced site lease protections” for people living in manufactured housing communities. If thousands of borrowers were to start approaching Fannie Mae seeking incentivized loans, that “would be a great problem to have,” he said. “Maybe what we’re doing can set a standard that the rest of the industry

can follow,” Simpson said. “We would like to do as much business as we can incorporating tenant pad lease protections in manufactured housing communities.” Fa n n ie pa r t ners w it h a network of lenders that under w rite manufactured housing loans. This initiative is available to all lenders in that network, he said. “ Th is is cent ra l to ou r m is sion — looking for ways to make financing available to borrowers,” Simpson said. MHV

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‘For the larger operator with considerable resources and the potential for a high volume of loans, it makes sense to consider setting up a related or captive finance company.’ –Ken Rishel, Rishel Consulting

Joint Venture Financing for Retailers and Community Owners By Ken Rishel


Photo courtesy of UMH Properties


rior to the late 1990s, retailers and community owners had many options for their customers to finance the purchase of manufactured homes. At one time, there were 18 national lenders and over 30 regional lenders providing financing to prospective owners of new and pre-owned manufactured homes. By 2001, there were only three national lenders and a smattering of regional lenders still actively seeking new loans. As a result, sales plummeted and retailers and community owners began seeking alternative methods of getting their customers financed. Many methods emerged — some legal, some not, some existing in an undefined gray area. Most were disastrous for both the provider and the borrower. With the


passage of the SAFE Act (2006) by the states at the demand of the federal government, almost all of the methods of finance became instantly illegal. There are legal alternatives, however... some very complex and some easier to implement. Which alternative to pursue depends on the abilities and resources of the retailer or community owner. For the larger operator with considerable resources and the potential for a high volume of loans, it makes sense to consider setting up a related or captive finance company to make loans to the customers of the selling organization. This only works for organizations that already have capital sufficient to make the loans, or capable of accessing capital at rates and terms continued on next page




continued from previous page

that will make lending to customers workable and profitable. For many who have done so, the profits from lending have exceeded the profits of the original operation. For others, however, it was problematic, because they lacked the ability to effectively manage a lending operation. That accounted for a dozen or so large organizations abandoning this type of effort, despite the huge profits.

offer solutions that work — if the loan volume is sufficient to interest these organizations. At this time, however, stand-alone retailers are excluded from these programs. Park Lane and Triad also offer programs that utilize their capital, as does the CASH program offered by 21st Mortgage.

Know What You’re Getting Into

Joint Ventures

For a retailer or community owner to make the right choices, it is important to understand the risks and rewards of the methods they are evaluating. It also is important to understand what they can and cannot bring to the table to make a solution work. The most important consideration is the risk the method presents when a loan or loans go bad. Many years ago, it was common for lenders to make very risky loans to buyers because the retailer or community owner had signed a recourse agreement that fully indemnified the

For others, there are joint ventures that vary in methods of operation, mostly based on the selling entity’s access to capital. This type of operation usually consists of a selling organization working with an existing lending operation to make loans to their customers, either using the seller’s capital or the lender’s capital. For those sellers with capital to fund loans that also operate land-lease communities, companies like Park Lane Financial and Triad Financial Services




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lender against any losses from a non-performing loan. Typically, the guarantor had little real underwriting knowledge on who did or did not get a loan, and even less on how the loans were serviced. While that was good for the lender most of the time, it could be disastrous for the seller who guaranteed the loans. The simple truth is when loans go bad, the person or entity guaranteeing the loan loses money. The trick is to make enough performing loans, at a high enough interest rate, to cover the non-performing loans and still make a profit. Both retailers and community owners make money selling homes, and community owners also make money by filling pads and collecting lot payments. But, as soon as either involves themselves in financing, they should understand which loans should be made and which loans should not. This is difficult — the need to sell homes and fill communities is pressing — but it is vital to continued success. To accomplish this successfully, the retailer and/or community owner must gain the knowledge necessary to understand how to make prudent lending decisions. They must also have the power and authority to use that knowledge to approve or veto prospective borrower loan requests. They also need knowledge and understanding of how to properly service loans to avoid unnecessary repossessions. Just because a lender makes manufactured home loans doesn’t necessarily mean they fully understand what they are doing. Past debacles involving a number of lenders clearly make that point. Those lenders were supposed to be experts on manufactured housing lending, but they were not, as their spectacular meltdowns proved. For lenders working with sellers (and the sellers being ultimately responsible for assuming any losses), the lender often is disincentivized to some extent to even care about a loan portfolio’s performance. Again, the guarantor,


Photo courtesy of UMH Properties

normally the retailer/community owner, needs to be knowledgeable and have enough authority to assure proper underwriting and service to avoid excessive non-performance. Done correctly, this does not mean dealing only with A credit buyers; with proper understanding and structuring, it allows for making successful loans to subprime borrowers, too. There have been, and continue to be, performing loan portfolios rife with sub-600 FICO scores.

A Successful Method

One of the most successful methods for retailers and community owners who lack the funds to make their own loans to customers is to enter into a joint venture relationship with a depository institution. This method allows the depository to provide the capital for lending, and to assume regulatory responsibility, as well as providing the entity to make and service the loans. The retailer and/or community owner obviously provides the prospective borrower, but also much more. Depository institutions have a horrible track record at manufactured housing lending. Many have lost so much money making these loans that their regulators actively discourage them. That creates the opportunity for a retailer/community

owner to propose and engage in a joint venture relationship that is profitable to both and provides a robust system of financing the homes sold by the retailers and community groups. For this method to work, the retailer and/or community owner must have considerable input and control into what loans get made, how the loan offerings are structured, and how the service aspects of collection and repossession operate. This creates the backbone of the joint venture agreement and, when properly done, assures success for both parties. To make this viable, the retailer and/or community operator must be knowledgeable about the peculiarities of manufactured home loan underwriting and the structuring of any resultant loan offers to borrowers. The y a l so mu st be knowledgeable about the differences in servicing, col lecting , and collateral recovery in manufactured home lending. The retailer/community operator also must be able to effectively commu-

nicate and train depository personnel in these differences. If properly presented to a depository needing to get capital on the street, the depository is often an eager participant, as these types of loans have a higher return than other types of loans the depository normally makes. The key to success is that the retailer/community operator must be able to bring specialized industry knowledge to the joint venture, which can assure success for both parties. MHV Ken Ri shel i s an industry veteran and the managing partner of Rishel Consulting Group, a nationally recognized consultancy in the manufactured housing industry.




Don’t Just Study the Zoning Code, Study the Zoning Commission By Rick Robinson


rior to becoming general counsel for MHI, I spent 30 years in the private practice of law. During that time, I represented many clients pitching a project to the local planning and zoning commission. I also represented several cities. People coming before the city on zoning issues were always well prepared about the particulars of their project. However, they did not spend enough time sizing up the people they were addressing. Whether it’s a planning commission, zoning committee or council — make sure to know your audience.

Personality Types

In my three decades of work in local real estate and municipal law, I found public officials can be divided into the following general categories. Everyone fits at least one of the personalities, and there may be multiples of one personality on any given panel. Knowing the personality types of the voting members will help you address particular concerns raised during a public hearing. The Code Geek. This is the toughest of all personalities, because this person knows the code better than the city’s lawyer. Whether it’s true or not, don’t tell them otherwise. Arguing with them about a provision of the code will get you nowhere. The Populist. This person is the number counter. They will vote with whoever has the most voters in the room (or whoever yelled at him the loudest at church). If you want their vote, make sure you have people there ready to stand up and support the project.

The One Issue Activist. Passion for a singular zoning issue drives them. Generally, it’s something like trees, greenspace, or historic preservation. Addressing their issue is the best way to get them on board. If they like trees and greenspace, make sure to highlight trees and greenspace. The Property Rights Activist.

Believing government has no business telling you what to do with your land, this person is on your side already. Follow the Leader. There is one person who always follows the advice of someone: mayor, city manager, city lawyer. You can pick this person out when they say, “Well, that’s what we pay the lawyer for.” The Businessperson. This person runs a store on main street and thinks in terms of revenue and downtown renovation. To them, point out the revenue your project will generate and the overall positive impact on the local economy. The Coalition Builder. No matter the issue, this person believes there is some way to work a compromise. If they start to get traction with others, be ready to bend a bit. The Zoning Czar. For whatever reason, this person believes the city passed a zoning code and there should be no changes – period. You will not get a vote in favor of any variances from them.

How to Win

Before going into a zoning hearing, make sure you’re prepared. Over the years, I noticed that the people who got what they wanted were the people who had their presentations together.

Here a re a few qu ick tips on how to win. • K now the code. At least, know the sections of the code impacting your request. •K now the backup provisions: HUD Code, IRC, local codes. • Be precise. The council will not define the request for you. • H ave a concise and orderly presentation. I particularly liked a tabbed notebook. • Be ready for questions. Prepare an FAQ and study up. •B e ready for opposition. When there is opposition, keep calm and watch what is happening with the voting members. Sometimes the best response is silence. • Don’t threaten. They know you have the right to appeal or sue. You don’t have to remind them. •B uild the record on appeal. Make your argument in terms of what it takes to win an appeal. For instance, if the appellate standard is “fits the nature of the zone,” use those terms in your documents and arguments. • Mark your calendar. Know the schedule for an appeal of an adverse decision. They are etched in stone. Miss it by a day and you lose. MHV Rick Robinson is the General Counsel and Senior Vice President for State and Local Affairs with the Manufact ured Housing Institute.




Manufactured Housing Communities: The Homeownership Choice for Millions of Americans By Dr. Lesli Gooch


iven the financial and lifestyle benefits of owning a manufactured home versus the limitations that come with renting an apartment or buying a condominium or other site-built home, millions of individuals and families have chosen to live in land-lease manufactured housing communities. Land-lease manufactured home communities provide an effective way for residents to become homeowners without the substantial barrier to entry posed by the down payment necessary for the purchase of land and the typical costly site improvements. Land-lease communities offer much more than affordable housing. Communities offer a sense of neighborhood and often feature a range of amenities such as swimming pools, clubhouses, and playgrounds. Many 55+ active senior lifestyle communities provide resort-style amenities and an array of planned events and activities. All-age communities offer neighborhood settings with playgrounds, sports courts and clubhouses; they can even offer services like after-school programs. The vast majority of investor-owned, land-lease communities in the United States are professionally managed, well-run and well-maintained by responsible owners. These owners and managers are vested in the manufactured housing business and seek property management training and certifications like becoming an Accredited Community Manager through MHEI. Most importantly, the residents who live in these communities are highly satisfied with their housing choice. The Manufactured Housing Institute (MHI) is working to ensure that the media, policymakers, and homebuyers understand the positive aspects of living in land-lease communities, including the high satisfaction rates of residents. Investors and managers are responsible for infrastructure and capital improvement issues, and are committed to providing residents reliable, high-quality, and professional services, which are an integral component of residents’ quality of life and lifestyle.

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According to a recent consumer industry and manufactured housing survey by MHI, 95% of residents in 55+ community lifestyle communities and 87% of residents in all• Supporting MHI in efforts to advance age communities report satisfaction with the interests of the manufactured their homes’ Further, 76% in 55+ commuhousing industry, manufactured nities are highly satisfied. Residents cite housing communities and commuaffordability and the ability to own their nity operators home as the top reasons for selecting While upholding these principles almanufactured housing. 62% anticipate ready is the norm of professional owners staying in their homes for more than and managers, given recent reports and 10 years, with 38% saying they plan to some negative attention on the industry, stay in their homes indefinitely. MHI’s NCC wants to make clear its membership research also reveals a high likelihood should be providing residents an outof residents recommending this housing standing homeownership experience. In choice to others. addition to the code of ethics, MHI and MHI’s National Communities Council NCC are developing best practices to (NCC) is comprised of community guide community owners and managers owners, managers, and individuals or in the management of their communicompanies whose primary business supports the development, finance or operation of manufactured home communities. NCC recently reaffirmed its commitment to ensuring residents of manufactured home communities have the highest quality of lifestyle by approving a national code of ethics. The NCC Code of Ethics, –Dr. Lesli Gooch, MHI developed by members of the NCC Executive Committee, outlines principles that NCC ties. These best practices focus on topics members must subscribe to as part of such as leasing terms, resident relations, their membership with MHI. These prinand community management. ciples focus on promoting the benefits MHI and NCC members actively of manufactured housing and land-lease educate policymakers on the benefits communities, as well as customer and of investor-owned land-lease manuresident relations, by: factured home communities. Recently, • Engaging in conduct and actions MHI successfully fought efforts to have that promote and enhance the public anti-industry language included in a image of manufactured housing and bill requiring HUD to issue guidelines land-lease manufactured housing for localities to consider manufactured communities housing in their use of federal funds. • Promoting positive customer and Nestled within a broader proposal, the resident relations as an essential original language would have sought responsibility to establish congressional intent that • Engaging in conduct that respects certain manufactured homes and inthe interests of customers, residents, vestor-owned land-lease communities vendors, and the general public reare harmful for consumers. The original garding the manufactured housing version included language that criticized


manufactured housing land-lease communities that are not resident-owned. As a result of MHI’s efforts, the bill that ultimately was introduced (S. 1804) did not include any of this negative language. Further, MHI ensured that the bill’s language actively supports the inclusion of manufactured housing in jurisdictions across America. MHI was the only association representing the industry to identify the threat and fight for removal of the language prior to introduction. MHI worked to have that language removed so that the bill only promotes the industry’s goal of having localities support more manufactured housing in their jurisdictions. MHI will continue to ensure that the media, policymakers, and homebuyers understand the positive aspects of living in land-lease communities. With manufactured home com mu n it ies locat ed throughout the United States and millions of people choosing this form of housing, it is critical that land-lease communities are supported in their dedication to providing an affordable, high-quality option for those seeking the dream of homeownership.

‘According to a recent consumer survey by MHI, 95% of residents in 55+ communities and 87% of residents in all-age communities report satisfaction with their homes.’

Trump Signs Executive Order

Even as housing costs continue to rise, recent reports show that families still believe homeownership is part of the American Dream. MHI is working to ensure that the Trump administration and Congress understand that manufactured housing can make that dream possible through consistent and ongoing advocacy efforts and the cultivation of strong bipartisan relationships. As a result of these efforts, MHI has made manufactured housing a key part of the administration’s and Congress’ work to address the nation’s affordable continued on next page



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You Build It, We’ll Back You Up. Together, we build the confidence that sells homes.

Ron D’Ambra National Manufactured Modular Program Manager


housing shortage, which was recognized by President Trump in a recent executive order. On June 25, Trump signed an executive order directing federal agencies to work together to facilitate the production of affordable housing. The order focuses on alleviating barriers that impede the production of affordable housing by creating a White House Council on Eliminating Regulatory Barriers to Affordable Housing (the Affordable Housing Council), consisting of members from eight federal agencies and chaired by HUD Secretary Ben Carson. The eight federal agencies participating in the Affordable Housing Council are Department of the Treasury, Department of the Interior, Department of Agriculture, Department of Labor, Department of Transportation, Department of Energy, Environmental Protection Agency, and the Office of Management and Budget. The executive order specifically references manufactured housing as a resource that has been hindered due to “outdated manufactured-housing regulations and restrictions”. The inclusion of manufactured housing in this order is the direct result of MHI’s efforts, which included meetings and ongoing dialogue with officials at the White House as the order was crafted. MHI is the only association representing the industry that is successfully and effectively elevating manufactured housing as a policy solution in the affordable housing conversation. This order by President Trump, which included references to manufactured housing regulations in line with MHI’s advocacy, is a reflection of the effective strategy of MHI to elevate the industry among policymakers in Washington. MHI has always advocated for policy solutions that target the underlying problem — a limited supply of affordable housing. This executive order makes clear that the only appropriate solution is to focus on reducing supply cost and to emphasize innovative solutions, which includes manufactured housing and a


regulatory focus. In addition to HUD Code regulations, the order refers to other regulatory barriers that inhibit or delay the availability of manufactured housing, including overly restrictive zoning and growth management controls, cumbersome building and rehabilitation codes, rent controls, excessive energy and water efficiency mandates, cumbersome and time-consuming permitting and review procedures, and tax policies that discourage investment or reinvestment. With respect to discriminatory zoning and development restrictions that make it nearly impossible to site manufactured homes, the executive order encourages federal agencies to take a more active role in policing discriminatory regulations and other unnecessary barriers that neither protect consumers nor punish bad actors. HUD has a litany of tools at its disposal to incentivize state, local, and tribal officials to address local zoning and development restrictions. The executive order provides additional impetus to HUD to update the building code for manufactured housing and Federal Housing Administration financing programs that support manufactured housing. MHI and its members have been working closely with HUD and Congress to expedite these necessary changes, including a major push on these initiatives during MHI’s Homes on the Hill Legislative Fly-In. Thanks to MHI’s effective approach to federal advocacy, manufactured housing is well-positioned in Washington, as demonstrated by this executive order. MHI will continue its successful representation of the industry to ensure policymakers include manufactured housing as a part of affordable housing discussions. MHV Dr. Lesli Gooch is MHI’s executive vice president and chief lobbyist.


When you think of value, where else can you get more than a dozen success-oriented professionals in your same industry, dealing with the same challenges and facing the same headwinds... 68 | MHINSIDER™ • SEPTEMBER / OCTOBER 2019 • MHINSIDER.COM


‘Mastermind’ Groups Will Make You a Better Business Person By John Ace Underwood and Ken Corbin


he world of supporting retailer/dealers and community owners is a constantly changing landscape. As technology plays a bigger and bigger role in how companies and their teams are supported, one form of support has never become outdated: Dealer 20 Groups; also called Mastermind Groups. The terms “Mastermind”, or “Dealer 20 Groups”, have become somewhat generic in their use. But both terms refer to groups of 20 or fewer retailers selling the same class of product, be it automobiles, marine products or, in our case, factory-built housing. The same holds true for community owners. Such groups typically meet three or four times per year for one to two days at a “host” location, whose business is typically the focus of that meeting. Its membership consists of retailers from non-competitive markets. In most cases, in a separate group, community operators meet others who are not competing within the same market. Most of these groups are facilitated by individuals who would be considered subject matter experts in one or more areas within that industry. It may be a marketing consultant, an individual with a significant financial background who truly understands continued on next page




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financial management or someone with a strong background in sales.

Mediating Mastermind or Dealer 20 Groups

Most of these groups are facilitated by one such individual. This can be somewhat limiting, as typically a fairly broad range of topics need to be the focus of discussion. So, the more subject matter experts involved in the facilitation, the more comprehensive the scope of subjects discussed will be. Since these meetings typically only last about two days, look for a group that covers the same business-critical topics each time. Dealer 20 Groups are intended to help you grow your enterprise and ensure maximum efficiencies within your organization. For retailers, topics should include marketing and sales, sales activity management, financial review, customer service, pricing, compensation, home delivery and installation, product mix and bottom-line profitability. Community groups typically review vacancies, home refurb, park management, capital improvements, rental rates, resident issues, problems with local municipalities, documentation, park valuations, and financial management. The better-run groups also leave time in their schedule to cover at least one

topic chosen by a member. This usually is an issue that is pressing for one or more person in the group. It’s common that an outside subject matter expert is brought in to help address that specific issue, if only for a few hours.

Final Observations on Dealer 20 and Mastermind Groups

In my 30 years of involvement in Dealer 20 Groups, both as a member but more often as a facilitator, there are two powerful truths I have come to embrace. First, every business owner, manager or other professionals participating in such a group has several areas in which even slight improvement can make a monumental difference in their business. Second, and perhaps less obvious, is that every participant in such a group does one thing or more extraordinarily well; meaning they perform a specific task better than any other member of that same group. Therein, my friend, lies the magic. As much as every facilitator wants to do the absolute best job leading the group, so much is learned from other members willing to share their experience and knowledge. I would suggest the majority of what is actually derived in these groups doesn’t come from the person in front of the room, but rather from those sitting beside you or across the table.


When you think of value, where else can you get more than a dozen success-oriented professionals in your same industry, dealing with the same challenges and facing the same headwinds, taking one or two days to focus on nothing but helping others make their business more productive? Not consultants, not industry experts, but business leaders like yourself. Therein lies the power, therein lies the value, therein lies the success of such groups. Between the education, the input given, the friendships made, and the alliances forged, you simply cannot walk away at the end of a Dealer 20 or Mastermind meeting without knowing that you are a better business person at that moment than you were only two days earlier. MHV John Ace Underwood and Ken Corbin are co-founders of the two exclusive MH20 Mastermind Groups focused on manufactured housing; one for ret ai l ers an d one for community owners . For more information, email johnaceunderwood@ or ken@ All inquiries are held in strict confidence.

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How to Create Trust and Build Community Awareness By Ken Corbin

The Milliseconds Theory

Within milliseconds of entering your community or office, potential homebuyers will make up their minds about you and your company. In a glance, they’ll decide how trustworthy you are, if you’re broke or if you have the financial resources to take care of them. While you can’t always control what people think, you can pad that first impression in your favor. There are countless ways to convey the success and professionalism of your company in the greeting area. It’s common for a prospect to wait in your reception area prior to speaking to the community manager, sales consultant or housing specialist. That waiting area can help establish another subtle bit of trust, and a comfort zone, if properly planned.

See it Being Built!

People love to see things being built. I keep nicely bound portfolios of construction projects we’ve done — including excavation work with bulldozers, foundations being poured with large trucks, and homes being installed by cranes. Videos showing projects from inception to completion are shown on the waiting-area television.

Another Satisfied Customer

I had a large red stamp made that says “Another Satisfied Customer”. A copy of the letter from a customer (minus some personal information they may want to protect) is made and the stamp is placed at an angle across the letter. Each letter is put in a sheet for protection and is placed in a binder. At last count, I had approximately 1,200 such letters in bright yellow binders continued on page 74

‘When trust is high, the dividend you receive is like a performance multiplier, elevating and improving every dimension of your organization and your life...’ –Stephen Covey, Author and Speaker





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that I placed throughout the waiting area. They’re one of the best marketing tools you can use. Even if you start with fewer than 10 such letters from happy customers, it’s just another tool to reinforce ease and comfort to a prospect.

Mission, Vision and Credo Statements

Your company’s mission and vision statements should be prominently displayed for all to see. If you do these separately, they should never be on the same wall. A mission statement talks about who you are and where you want to be. It defines the purpose and primary objectives related to your customer needs and team values. It answers the questions, “What do we do? What makes us different?” I generally recommend the mission statement being placed in the main office area. A vision statement outlines what you want to be. It communicates both the purpose and values of your business. It answers the question, “Where do we aim to be? How will we get there?” Since most customers will use the restrooms during their visit, I generally hang the vision statement in that area. Some companies combine their commitment, mission, vision, credo, and core values together in one statement. I’ve

done this, and it was the largest single item in my office. It read as follows: Our “Commitment” and what we promise: We’re committed to be the finest community and manufactured housing company in America. Our focus has and will continue to be focused on 100% total customer satisfaction. Our “Mission” and who we are: Our mission is to provide excellence in communication, housing, finance, service and construction to our communities and the customers we serve.

Our “Vision” and what we strive for:

Our vision is to become the recognized leader in housing while offering the best value and becoming a trusted member of our community.

Our “Credo” and what we stand for;

our core values: It’s everything we do and the foundation on which we operate. It’s our commitment to our customers. Our core values are based on what we believe in; and that word is “Trust”. T is our total belief in customer satisfaction. R is our respect for our associates and customers. U is the unlimited co-worker opportunity we offer our associates. S is the superior quality-built homes and the community we offer. T is the available turn-key land, home,


financing and site improvement packages that we offer.

Show Your Community Spirit

Most businesses get frustrated with the constant bombardment of charitable organizations, fundraising events and nonprofits that contact them. My rule of thumb is quite simple. If it’s truly local, I will participate on a minimum basis with every group that I can reasonably afford. Teenagers in high school eventually will become first-time homebuyers, nonprofits frequently are supported by local lenders, and fundraising events (especially in your surrounding community) can only reinforce your image. Don’t just make donations, but promote the donation and cause in your office. As an example, go to any Sam’s Club. Near the checkout area, you’ll see all the local groups that the club supports. It’s straight ahead and easy to see while you’re in line to pay the cashier. MHV Industry consultant Ken Corbin has worked with over 800 manufactured housing communities, retailers, manufacturers and associations. For more information about his consulting services, call (888) 823-4945, or email


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Rent Control for Manufactured Housing Communities – CPI Systems By Thomas Casparian


s housing affordability becomes more challenging, rent control is being enacted or considered for the first time in many areas that have long allowed market rents. However, for the last 40 years, California MHC owners have operated under a patchwork of rent control laws that differ from city to city. These myriad rent setting methodologies apply only to MHCs. Experienced MHC owners, management companies, and attorneys have learned long- and shortterm effects of even seemingly slight differences. The resulting experiences provide lessons for other locales that are debating or are drafting MHC-specific rent control, and for those who are considering investing or operating a community that has, or may soon have, rent control.

This article is the second in a series that explains the most common elements of MHC-specific rent control systems. The first installment, in the July/August 2019 edition of The MHInsider, examined “vacancy control” measures, their effects, and ways to mitigate their stranglehold on rents. This article will explain inflation-factor rent control systems, their various forms, and how small details can make big differences. The most common rent setting method allows rent to be increased, annually at most, in amounts equal to the percentage change in inflation. Yet, even this seemingly-simply percentage increase method has a multitude of variables. Consumer Price Indexes (CPIs) can vary substantially, as some jurisdictions use a regional index, some a national index,

some use a narrower wage-earner index and others use a broader all-consumer index. Application of a national index in higher-inflation (usually urban or coastal) areas, for example, can be particularly regressive to rents over time. Which inflation factor is used can make a substantial difference. Many localities allow rent increases equal to only a fraction of the CPI change. Rent increases restricted to only 75% of the annual CPI change are commonplace, and some jurisdictions cap increases to only 50% of inflation. Surprisingly, these onerous controls do not necessarily violate the Fifth Amendment’s prohibition against taking property without just compensation, despite the fact that they almost inevitably continued on next page




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erode profit as expenses increase faster than income is allowed. Their long-term application may constitute a taking. But an experienced rent-control attorney can evaluate whether you may have a claim to greater increases than the local law seems to allow. Compare such a system to the statewide rent control recently passed in Oregon, which allows rent increases at 100% of the CPI plus 7%. Across the state line, California MHCs can only obtain rent increases at less than CPI. MHC-specific rent control is purportedly justified as protection against owners who may take advantage of a “captive”

about 8%, hold back income even when expenses are increasing faster. Minimum percentage increases or “floors”, usually 3%, were once typically paired with any ceiling, but have become less common in new laws even where ceilings are imposed, and are even being eliminated in some existing laws where a cap is nevertheless retained. The advantage of these systems is that they usually are easy to calculate and often are self-implementing, although many jurisdictions require an annual application or other permission. They also offer some level of predictability, as inf lation generally follows the

exercise some control by managing and timing expenses. With inflation-based rent control, an owner may face a large increase in expenses, either temporarily or long-term, yet has no ability to adjust rents accordingly and will have its profit eroded. For example, upon purchasing an MHC, the new owner will likely see increased property taxes and/or increased debt service, yet possibly with no ability to offset them or pass them through. The next article in this series will examine profit-maintenance rent control, the constitutional right to a fair return on investment, and how these may be invoked where an inflation-factor rent

population. Yet, where increases of only 100% of CPI or less are allowed, MHC rents grow far slower and become far lower than other rental or housing costs. Such rent control is not a rational “anti-gouging” regulation. In fact, it becomes an entitlement, because when paired with vacancy control as it often is, the resident’s aging home continues to gain “equity” over the years as the value of the restricted below-market future rent obligation is transferred into the in-place value of the home. Also commonplace are maximum percentage increases. “Ceilings”, typically

economy. However, they can cause a large discrepancy with other housing costs, creating an imbalance in MHC rents with other housing, that can lead to unreasonably high costs to buy an in-place home from the former resident, as well as unreasonably low rents for the community owner. The obvious downside of inf lation-based rent increases is that the community owner has no control over increases. Other rent control systems, such as those intended to maintain profitability, enable the owner to

control system has eroded profitability in light of increased expenses. MHV Thomas W. Casparian is a trial lawyer and certified appellate law specialist with the national law firm Cozen O’Connor. He is a founding partner of Cozen’s Manufactured Housing Practice and has over 20 years’ experience in the industry. He can be reached at (310) 393-4000 or tcasparian@



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This document is for information purposes only and we reserve the right to change any part of this policy without notice. This document is not for consumer use. This is not an advertisement to extend consumer credit as defined by Regulation Z. NMLS #2280


21st Mortgage Corporation | 620 Market Street, Suite 100 | Knoxville, TN 37902

We Finance Communities. A Berkshire Hathaway Company


Offered In Select States.

Earn out Program.

1st lien priority required.

Up to 30 year Amortization.

Approximately 45-65 days to close.







Refinance 151 Sites • AL

Refinance 247 Sites • MI

Acquisition 41 Sites • TX







Acquisition 167 Sites • OK

Acquisition 392 Sites • OH

Refinance/Construction 149 Sites • LA

Contact Kurt, Chris and Austin today for your park financing needs at 800-309-5008 or Vanderbilt Mortgage and Finance, Inc., 500 Alcoa Trail, Maryville, TN 37804, 865-380-3000, NMLS #1561, (http: //, AZ Lic. #BK-0902616. Loans made or arranged pursuant to a California Finance Lenders Law License.

All Loans Subject to Credit Approval

continued from page 82

and land-lease community asset class presentation offered anywhere in the U.S. Every year since 9/11, the Networking Roundtable begins with everyone standing and reciting the Pledge of Allegiance. Then attendees stand and introduce themselves to their peers. This is one reason the Roundtable Contact Directory is widely regarded as the best takeaway resource offered by any MH-related event. Both venues enjoy a solid reputation for identifying cutting-edge topics and attracting the appropriate presenters and panelists. During the past 28 years, the Networking Roundtable has cultivated a reputation of being where new books are introduced to the industry. This began in the early 1990s, when the two J. Wiley & Sons classics debuted. Then came the “20 Year History of the NCC”. And recently, Alvan Schrader’s autobiography, “No Respect At All…A PATH TO MILLIONS” was showcased, encouraging his peers

to pen their memoirs. In 2017, the first history of the land-lease community realty asset class, “Swan Song”, was given to everyone at the Roundtable. And it’s expected, during this year’s event, that copies of the new edition of “Land Lease Community Management”, retitled “Community Management in the Manufactured Housing Industry”, will be available for purchase. The 28th Networking Roundtable convenes Sept. 8-10 at The Alexander in downtown Indianapolis. The featured keynote presenter is U.S. Sen. Todd Young. There’ll be a Sunday afternoon Fireside Chat, where lessons learned will be exchanged; GSEs updating their Duty to Serve plans; participation by private equity firms; and more than 20 additional topics with speakers and panelists. The organizers and hosts are Susan McCarty and Erin Smith of EducateMHC. Visit or for more information and to register.


The 10th annual SECO Conference convenes Oct. 8-10 at the Hilton Atlanta Airport. Pre-SECO workshops are scheduled for Oct. 8, with the main conference Oct. 9-10. The program is under development, so for more information email I plan to attend the Networking Roundtable and SECO Conference. How about you? There really aren’t any better educational and networking venues for you to patronize during 2019. MHV George Allen has owned and fee-managed land-lease communities since 1978. He’s a former MHI Industry Person of the Year and a member of the RV/MH Hall of Fame. He has been designated a Certified Property Manager-Emeritus and a Manufactured Housing Manager-Master. He’s also a senior consultant and staff writer with EducateMHC. Allen can be reached by phone at (317) 346-7156, or by email at g


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A Confluence of Community Owners By George Allen, CPM Emeritus, MHM-Master


pring 1991, Clearwater, Fla. — the date and location of the first national gathering of mobile home park owners! Initially promoted as an International Networking Roundtable for manufactured home community owners, the annual event evolved into a heavily educational experience for investors and property managers. Today the venue, now known as the Networking Roundtable, continues to attract owner/operators of land-lease communities and property portfolios from throughout the U.S. and Canada. In 2009, manufactured home community owners primarily from the Southeast convened in Atlanta for their first Super Symposium — an event known as the SECO Conference since 2012. SECO is heavily educational with much interpersonal networking and features product and service vendors. SECO, soon to celebrate a successful decade-long run, is planned and hosted by a team of community owners headed by Spencer Roane and David Roden. So, what are the similarities and differences between the two land-lease,

community-focused events, besides meeting, planning and hosting talent? For its first 25 years, the Networking Roundtable moved from state to state — the past two years and this fall convening in Indianapolis. Both events are facilitated by businessmen and women who own

SECO, soon to celebrate a successful decade-long run, is planned and hosted by a team of community owners headed by Spencer Roane and David Roden land-lease communities, not by state or national trade associations. Nowhere else in the manufactured housing industry does this happen. Both events have exhibited new HUD-Code homes — the Networking Roundtable a prototype Net Zero Energy Use Home; SECO raffling off a new $50,000 home as the main prize. SECO continues to grow, expecting more than 500 attendees this fall; the


Networking Roundtable, due to staff limitations, maxes out at about 200 registrants per year. What are the particularly memorable happenings from each of the events? Having SECO registrants fall ill from the foul smell at the host hotel in Forsyth, Ga.; MH transporters breaking down during the setting of homes. On the other side of the coin, the Networking Roundtable long will be known for three consecutive years of meeting threats: the “earliest snowfall on record” at Colorado Springs (5 feet fell overnight), Hurricane Georges (of all names!) the next year, and — sad to say — our nation’s tragedy on 9/11, the day before the Networking Roundtable was to begin. What are both events particularly known for? Pre-SECO is where folks go to get specialized training sessions the day before the major event begins; to take the daylong Manufactured Housing Manager (MHM) certification class, and to hear the most comprehensive state of the manufactured housing continued on page 81







2018 Review Total Sales





We are Dedicated To Our Clients MHRE Inc. is the foremost real estate brokerage and advisory firm predicated exclusively in the manufactured housing and recreational vehicle asset class. MHRE has created an unparalleled national platform consisting of the most comprehensive database and the most advanced marketing technologies to provide its clientele with the highest level of results. FREE BROKER OF OPINION (BOV) EVALUATIONS

Please email Melissa Wade at or call 586-884-8415


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