MHInsider 2018 Tunica Show Guide

2018 TUNICA SHOW GUIDE

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Join us in celebrating at the 2018 TUNICA SHOW championhomesoftn.com

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TUNICA SHOW GUIDE MARCH 2018 ON THE WEB MHInsider.com –––––– Executive Editor

Community Owner’s Toolbox for Increasing Cash Flow and Property Value

19

President of CIS Home Loans Has a Love for the Industry

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Darren Krolewski darren@mhvillage.com

Managing Editor

Patrick Revere patrick@mhvillage.com

Creative Director

Mark Dollan dollan@mhvillage.com

Contributors

Fair Housing for the Manufactured Housing Retailer

21 SPECIAL FEATURE: 2018 Tunica Show

Manufacturers Bring Best New Offerings to Tunica

Don’t Miss Our Special 2018 Tunica Manufactured Housing Show Section that includes: • Complete Show Schedule • List of Seminars • Show Floor Plan & Exhibitor List • A Word from the State Association Directors

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George Allen Donna Rishel Ken Rishel Spencer Roane

Cover Photo

Deer Valley Homes/Johnston Photography Home: Ahaveh WL-6412

Advertising Sales

Matthew O’Brian Call (877) 406-0232 matthew@mhvillage.com

Disclaimer Although we have 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.

Copyright Notice

Does Ownership of a Related Finance Company Make Sense for a Retailer?

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Ask the Retailer

Copyright ©2018 MHVillage, Inc. All Rights Reserved. Reproduction in whole or in part is prohibited without written authorization from MHVillage, Inc.

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2600 Five Mile Road NE Grand Rapids, MI 49525 1-800-397-2158 www.MHVillage.com

W e l c o m e 2018 Tunica Show

WELCOME

Welcome to the

O

n behalf of the South Central Manufactured Housing Institute, Show Ways Unlimited, the Hollywood and Resorts Casinos, and more than 100 exhibiting manufacturers, suppliers and sponsors, it is my honor to welcome you to the 2018 Tunica Show.

As the largest outdoor manufactured housing show in the nation, The Tunica Show captures the attention of the entire manufactured housing industry like few events can.

Over the next few days, it’s a place where thousands of retailers, community owner/operators, builder/developers and installers throughout the Southeast will turn to see the latest trends in factory-built home design and innovation, discover products from the industry’s leading suppliers, gain valuable insights from impactful seminars, and take advantage of abundant opportunities to network with their peers.

For me, the word “Tunica” is as synonymous with manufactured housing as it is with one of the country’s largest casino gaming destinations. The Tunica Show was one of the early manufactured housing events I attended when I was new to this industry, and I credit the scale of its impressive home displays with igniting my passion for this industry and all that is possible with our amazing, versatile product.

As I walk through the aisles of The Tunica Show, I am reminded of the important role we play at the forefront of the American Dream, providing an eminently affordable, energy-efficient and innovative housing choice that helps to make that dream possible for millions

of Americans. No matter your role in the industry, I hope you’re reminded of that too.

Taking the time to attend a show like Tunica is certainly an investment, but as evidenced by the strong attendance each year, it’s one that everyone will agree pays huge dividends. Like our industry, The Tunica Show has adapted and evolved to meet changing needs and preferences. This year was no exception, as several exciting changes were made to the show based on your feedback.

As the largest outdoor manufactured housing show in the nation, The Tunica Show captures the attention of the entire manufactured housing industry like few events can.

You may have noticed that the show was moved forward one day in the week compared with previous years to allow attendees to more easily travel back home for the weekend. The decision also was made to shift the show a little earlier in the month to accommodate industry professionals who bear responsibility for month-end financials.

As part of the pre-show activities, an inaugural Golf Tournament sponsored

by SCMHI and Sunshine Homes will take place on Monday, March 19. Attendees also are invited to enjoy the SCMHI Hospitality Tent located in the manufacturers’ area while waiting to board the buses

to the service and suppliers’ exhibits.

I personally have always enjoyed the networking opportunities a ff o r d e d b y having lunch Darren Krolewski, Co-President & CBDO at the show. at MHVillage® In addition to the two free lunches provided to show attendees on Wednesday and Thursday, there will be a new Supplier Luncheon in the service and supplier exhibit area on Tuesday following the pre-show seminars. It’s a great opportunity to get in some additional networking time while learning more about the latest products and services from more than 100 exhibitors.

We hope that you’ll find this special Tunica Show Guide edition of the MHInsider useful as you explore the show during the next couple days. I’d like to take a moment to thank the SCMHI and Show Ways Unlimited for their generous support of this show guide, as well as our many valued advertisers who have made the launch of the MHInsider as a new industry trade publication possible.

After the show, I invite you to visit our website at www.MHInsider.com to view the latest industry news, as well as sign up to receive our bi-weekly email updates and the next full issue of our quarterly print magazine that will be distributed in April.

Until then, enjoy your time in Tunica and I’ll see you at the show! MHV

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Looking for ways to fill the vacant sites in your community? Here are a few techniques that will help.

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M A N AG E M E N T

Community Owner’s Toolbox for Increasing Cash Flow and Property Value

By George Allen CPM Emeritus, MHM Master Spencer Roane, MHM

Fill Vacant Sites and Upgrade Communities with New Homes

S

peaking to community owners about the advantages of filling vacant sites is like preaching to the choir. Besides the increase in revenue associated with site rent, there are also savings associated with not having to cut grass on vacant sites or hauling off trash that accumulates on vacant sites.

Community owners also realize that filling a vacant site is very profitable since almost all operating costs are covered by the other occupied lots.

The best estimate pegs more than 250,000 vacant sites in the approximately 50,000 communities nationwide. There may well be another 250,000 old homes in these communities that should be replaced. Doing so with today’s attractive, energy-efficient, feature-packed new Community Series Homes goes a long way toward improving the image of a tired old “trailer park.”

Besides the advantages to owners, there are obvious advantages to the manufactured housing industry. Current annual production is about 95,000 new manufactured homes, with at least 40 percent going into communities.

The 500,000 sites mentioned above represents more than a ten-fold increase in homes able to be absorbed by communities going forward.

And, finally, there are advantages to consumers. Barely a week goes by that we don’t read or hear of the critical need for more “affordable housing”. There is no other form of attractive, energy efficient,

feature-packed housing that consumers can buy for about $500 per month, with loan terms as short as 12 years.

So, the timely and strategic question is “How can community owners fill vacant sites?” Here are a few salient thoughts on the topic.

Lease-Option The S.A.F.E. Act of 2008 prohibited traditional seller-financing (e.g. originating a mortgage, interest rate, promissory note, collateral, amortization schedule) without S.A.F.E. Act licenses (Mortgage Loan Originator and Mortgage Broker or Mortgage Lender). The sale of manufactured homes in communities, via lease-with-option-topurchase (L-O), is an attractive alternative in many states, eliminating the need for S.A.F.E. Act licenses. What might a typical L-O transaction look like, with a $5,000 option payment, $500 per month lease payment, and option to purchase the home for $10,000 at the end of the 10-year lease? For more info, see www.

LeaseOptionMHSales.com What are the disadvantages of L-O? Community owners would rather not be in the “finance” business. They don’t want to process the paperwork and explain the intricacies of a document that leads to purchase. They would rather not form a separate company to handle “financing” of homes, or collect payments other than site rent. They would rather not report payment information to credit bureaus.

Also, residents may prefer the tax deductibility of mortgage interest payments.

Better Underwriting Whether community owners only rent sites or sell homes via the lease-withoption-to-purchase program, one thing they can do to minimize the likelihood of an undesirable outcome with a new homebuyer/site lessee is to thoroughly qualify them. Down payment, employment history, income, rental history and criminal history are critical to a new resident’s ability to pay. Acceptable debtto-income ratios are absolutely essential.

All too often we see applicants able to afford front end site rent and house payments, but can become so overloaded with debt (e.g. – expensive truck payment, child support, personal loans) they fail the back-end ratio.

Finally, there’s the applicant’s credit score. Generally speaking, community owners consider it least important – as it is often depressed by medical bills and the absence of credit characteristic of all-cash buyers.

How to handle this screening efficiently and accurately? There is a pre-qualification worksheet that involves eight basic questions. This allows for requisite debt-to-income calculations.

Often this analysis can help prospective residents recognize they should not buy CONTINUED ON NEXT PAGE

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M A N AG E M E N T

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such an expensive home, or, sometimes, they might be able to afford higher payments than they thought.

When to administer the pre-qualification worksheet? Recognizing that community managers have many tasks besides showing homes, the best practice is to conduct the pre-qualification before showing any homes. Doing so helps the applicant zero in on a home in their budget and avoids unnecessarily wasting managerial time.

New vs. Pre-Owned Homes Default rates on pre-owned manufactured homes sold in communities via L-O are about four times higher than those on new manufactured homes. Experience reflects a likelihood of default on new manufactured homes of less than 4 percent the first year, 3 percent in year two and three, 1 percent in year four and nearly zero thereafter. This all averages to less than 1.5 percent per year. Another interesting fact involves comparison of new single-section homes to multisection homes. Our experiences suggest the latter sell quicker, are considered to have less wasted floor area and have far fewer defaults.

New Hybrid Chattel Financing Any lender knows that the historic downfall of chattel loans was the product of default rates and default costs. Default rates can be minimized through better qualification of prospective residents and sale of new homes, particularly multi-section homes. Default costs can be minimized by selling repossessed homes in the community where they are sited – where no moving/relocation costs are incurred, and where they can be secured, efficiently rehabilitated, and quickly resold. To accomplish those objectives, a symbiotic relationship must be established between the community owner and the lender.

One way to accomplish that relationship is for the community owner to guarantee the loan made by a conventional lender to the buyer of the home. The community owner would be concerned with the buy-

er’s qualifications and would significantly mitigate the lender’s risk by paying off or assuming the loan if the buyer defaults.

Hybrid chattel loans might include the following characteristics to satisfy lenders, buyers, the GSE secondary market and community owners: • Attractive and functional Community Series Homes •

Guaranteed by community owner (possibly released after five years when likelihood of default is very low)

•

Qualified buyer (down payment, income, employment, rental, criminal, DTI, credit), but lower qualifications than required by traditional chattel loans

• Reasonable/no gross sales profit on homes by community owners • 10%+ down payment •

Low interest (commensurate with risk associated with community owner guarantee, lower payments reduce likelihood of default)

• Short term (12-15 years) • Close quickly (community owner will already have applicants’ financial information for lot rent) • Qualified community owner (experience, credit, etc.)

• Qualified community (e.g. – ABC or Woodall 5-star rating system) • Long-term lot/site lease with reasonable escalation • Motivated community owner – either by penalty and/or reward

Summary

disadvantages of renting, anxious to become homeowners, and are qualified to do so. Politicians and city planners everywhere are talking about the need for affordable housing. None is better than manufactured housing. The hybrid chattel loan is a WIN for all parties involved: the lender, the secondary market, the home buyer, “affordable housing”, the community owner and the manufactured housing industry. MHV G e o rge A l l e n i s Adminis trator

of

COBA7, a division of GFA Management, Inc., dba PMN Publishing. George owned & fee-managed land lease communities since 1978.

He’s authored all the

George Allen

“books in print” relative to manufactured housing and its unique realty asset class. Honored by MHI as Industry Person of the Year, George is also a member of the prestigious RV/MH Hall of Fame.

Furthermore, he’s been designated a Certified Property Manager - Emeritus, and Manufactured Housing Manger - Master. Finally, George is a retired lieutenant colonel of U.S. Marines, having served a combat tour in the Republic of Vietnam, with active duty service during Operation Desert Storm. George & Carolyn have two adult children, six grandchildren and two great grandchildren. Contact him at (317) 346-7156 and gfa7156@aol.com.

Spencer Roane is president of Pentagon Properties, Inc., and Boyd Ro ane, Inc., Atlanta, Ga. His firms own and manage four land lease communities in Georgia and Texas,

Spencer Roane

and have acquired, sold, and seller-financed 350 new and previously-owned manufactured homes.

Spencer’s 35-year career in the manufactured housing industry includes membership in the Georgia Manufactured Housing Association,

For the first time in a long time, the “stars” are aligning to facilitate filling vacant sites and upgrading communities! Attractive, functional, lower-priced Community Series Homes are being manufactured with our residents in mind. Rental properties are overflowing with tenants who are well aware of the

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founding member of the Southeast Community Owners (SECO) annual conference, and induction into the RV/MH Hall of Fame. He holds Mortgage Loan Originator and Mortgage Broker licenses, and promotes all forms of chattel financing of manufactured homes in communities, including use of Lease-Option contracts. Contact him at spencer@roane.com and (678) 428-0212.

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INDUSTRY PROFILE

President of CIS Home Loans Has a Love for Manufactured Housing

By Patrick Revere, Managing Editor for the MHInsider™

P

aula Reeves, president and co-owner of CIS Home Loans, has been in banking and lending for decades, but when she talks about “her industry” she’s talking about manufactured housing.

It’s where her heart lies.

“I try to be an ambassador for our industry,” Reeves said. “The information and education that’s needed, I’ve lived it.

I’ve been in the trenches, and all of us in the manufactured housing industry,

“The more we educate, the greater chance we have of making a difference.

It’s really about the consumer. It’s about providing a viable housing option” she said.

In her career, Reeves has gone from a bank teller earning less than $4 per hour to a leader in residential lending with an organization that provided more than $500 million in loans to the secondary market in 2017. CIS Home Loans, also

Paula Watts Reeves

President/Minority Owner CIS Home Loans, Hamilton, Ala.

• Bachelors Degree in Administrative Science/Business Administration from the University of Alabama – 2004 • Membership and board service for more than 20 state, regional and national housing and lender organizations

have to understand that things will not get better until we all are on board to make the necessary changes. It doesn’t matter if you’re a lender, a builder, a retailer or installer. We all have to share the responsibility.”

known as CIS Financial, currently holds nearly $2 billion in home loans.

CIS is based in Hamilton, Ala. With fewer than 7,000 residents, there are 80 in-state cities larger in population than Hamilton. CIS employs 122 people,

and is hiring. The company has opened a seventh location, in Tuscaloosa, and recently announced a new chattel finance program that adds to the mix of loans available for manufactured homes.

“To have an organization of this size in Alabama, and particularly in a small rural town in Alabama, is very rare,” Reeves said. “We are very proud of that.”

Credit Where Credit is Due Reeves spent 13 years, and took on many roles with, SouthTrust in Hamilton.

It was 1991 when she was approached

by Jerry Wilson, founder and owner of Cavalier Homes. He recruited Reeves to start a captive finance company for the Cavalier dealer network.

The name of the lender was Cavalier Acceptance Corporation, or CAC. “There were few options at that time for finance in terms of chattel lending.

Jerry’s son Jay Wilson and I were originally housed in the Buccaneer Homes building,” Reeves said. “We had $2 million and served seven retailers.”

Reeves gives credit to Jerry Wilson, for his vision and thoughtfulness. And for CONTINUED ON NEXT PAGE

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helping to shape a young banker’s life in ways that were difficult to understand at the time, but are fully appreciated today.

“His vision into the future was something I’ve seen from few others,” she said. “He passed away in 1996. What he was able to do with his businesses and in helping those around him continues to inspire me every day.”

Character, Integrity, Service Ten years in, with changes in lending for manufactured homes and all home types, the company opted to change its name to CIS, denoting the chief attributes of the organization – Character, Integrity, Service.

The CIS acronym is a daily reminder, Reeves said, that she and her team are more than a mortgage lender.

“It matters who you are. Character matters,” Reeves said.

“One doesn’t suddenly change when they walk through the door at work. It is our goal to provide high standards of service to our ABOUT THE LENDER: customers, our employees and the community.

CIS Home Loans “Working here is not just a job,” she said. “Ask anyone.”

• Mortgage Lender Licensed CIS offers its employees in 27 States the resources and tools to • Loan Servicer in 50 States help them professionally and Puerto Rico and personally. Their goal is • Licensed Insurance Provider to be a successful mortgage in 43 States bank and they invest in • New Construction and our employees to help Chattel Lender for them be successful in their Manufactured Housing personal life too.

• Primarily Engaged in “Whether it’s teaching Southeast, With 40 Percent them how to navigate and of Business in Other Regions understand pivot tables in excel or teaching them how to use PowerPoint for personal club presentations,” Reeves said. “We hope our employees are happier because we invest in them. We challenge them to be the best professional and person they can be.”

An employee led committee called “Love for Others” has raised over $40,000 to give to local charities and organizations. Some are for area foster students to have backpacks and the supplies they need for classroom learning. CIS pays employees during the holiday season to ring bells and collect money for the Salvation Army. They raise funds with bake sales. The employees sponsor families who may not otherwise have a holiday meal or toys on Christmas. They participate in blood drives.

“We have helped individual families that have faced catastrophic events. There was a family that almost lost their father.

He was critically injured and in the burn unit for several weeks.

He was a single parent, and two of his kids died in a fire at their home,” Reeves said. “We raised over $6,000 that helped to pay funeral expenses and other bills.”

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When she went to the hospital to drop off the check, the father asked that she be ushered into intensive care burn unit.

The man could barely talk.

“He mouthed ‘I don’t know how to thank you, I don’t even know who you are’,” Reeves said. “He survived and we are good friends today. We attend the same church.”

Character. Integrity. Service.

More Industry Change It’s been said that the only constant is change. This has been true during the last 20 years in lending, particularly if you have sufficient interest in manufactured housing.

So, CIS started in captive finance, helping keep dealers flush with new homes to sell. CIS was a correspondent to a large national bank, and sold chattel loan portfolios to Conseco and Green Tree. The company was successful and growing.

But, inevitably, change.

Jay Wilson left the company to serve as chief information officer for Cavalier.

And the markets began to constrict in the late 1990s. Underperforming loans

“ People in our industry are like extended family members to us. We have not just survived, but we’ve prevailed and thrived. I’m really proud of that, and I’m proud of our managers who have been with this organization for 20-plus years, and they’re all dedicated to manufactured housing.”

– Paula Reeves

nationwide invoked added regulatory oversight and created a chilling effect for the secondary markets. CIS began to gear itself toward mortgage lending.

When chattel was all but off the table, Reeves applied for seller servicer license with Fannie Mae, Freddie Mac, Ginnie Mae and FHA to provide land-home financing.

CIS gained traction with a more diversified portfolio of loan products, and dramatically increased its holdings.

Larger lenders began to notice. Cavalier Homes was pondering a move with CIS because of the changes in chattel, and Reeves mentioned the possibility of a purchase to a fellow MHI board member, Don Glisson Jr. of Triad Financial.

Triad made the purchase from Cavalier in February 2009, creating a wholly-owned subsidiary of Triad that continued to operate under its own same name. The business stayed in Hamilton, same address and phone numbers. And the leadership stayed consistent.

All along, Reeves continued on in service of manufactured housing, working with MHI, state and regional associations and boards.

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In 2012, Triad sold CIS to Sonny Jeung, a banker and investor in San Francisco, and as part of the deal Reeves became minority owner of the business. From teller to bank president, and owner.

Changing Minds, Changing Lives CIS is a direct, retail and wholesale lender with more than 10,000 accounts, 80 percent of which are for site-built homes.

“Manufactured housing is about 20 percent of our business today, and we’d like to see that more at about 50 percent,” Reeves said. “And I’m not talking about just originating loans, we want to be in every venue including wholesale, retail and varying forms of correspondent relationships.

“Affordable housing has always remained in my heart,” she said. “During times when we had to do other things to survive, my mind was always on manufactured housing.”

In recent months, Reeves has played host to Paul Barretto and his team from Fannie Mae, helping them gain a better understanding of the importance of manufactured housing. She hosted tours of communities – from upscale retirement Photo Courtesy of Kabco Builders

“What impresses me the most about Paula is how her efforts to transform the manufactured housing industry are equally matched by her desire to see the staff at CIS develop in their careers to be the future leaders of the industry.”

– Paul Barretto, Senior Manager at Fannie Mae One result at the start of 2018 was the agreement to offer and provide a Fannie Mae construction loan program for manufactured homes.

“There’s was not a week to go by that a customer would ask for a loan we couldn’t provide,” Reeves said. “And that’s started to change, with secured loans where the first draw allows the customer to buy land for a new home that comes from a factory. That feels good.

“And we’ve just started the new chattel lending program, so things can change,” she added.

Reeves advocates for getting involved, not just through phone calls or email, but with real face-to-face conversation and shared experience. “It makes a big difference to be able to show someone what is needed or happening rather than just saying it. We can talk to Washington all day on the phone, but an hour of time on the ground showing and educating them is most effective.”

“Duty to Serve”

properties to no-frills parks for affordable housing. Reeves has participated in many calls and meetings in D.C. helping to expand the idea of what home construction is, whether in a residential neighborhood or on the factory floor.

Paul Barretto, senior manager for single-family product management and development at Fannie Mae, said as Fannie Mae executes its Manufactured Housing Underserved Market Plan, Paula Reeves has made evident she is one of the industry leaders to watch, recognized by many for her accomplishments in manufactured housing and affordable lending.

“As the president of CIS Home Loans, her company demonstrates the character

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and integrity that makes them a valued Fannie Mae customer who knows how to leverage our offering to effectively serve their borrowers while maintaining a high quality book of business. Her strong compliance background, ability to adopt new technology to improve the customer experience, and strategic vision for the market is what will make her company a market leader.”

The multi-year process of “Duty to Serve”, the mandate toward Fannie and Freddie to explore finance options that can open the door to manufactured housing for more Americans, has created a certain amount of skepticism in some circles. Reeves said she is no part of that.

“They’ve been working really hard for the past two years, and I don’t think some people realize that,” she said.

Reeves said she sees the progress and is confident more will come.

“Before January 1, if I wanted to build a home I could close a construction loan through Fannie Mae. But I couldn’t do that buying a really nice HUD Code home to put on land that I wanted to purchase,” she said. “Now I can.

“Things are starting to move and I couldn’t be happier about it. Manufactured housing is a viable solution for so many people, and it’s a great product.

Our manufactured home portfolios at CIS perform just as well if not better than site built, and you can’t argue with the numbers.” MHV

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FA I R H O U S I N G

Fair Housing for the Manufactured Housing Retailer

By Donna Rishel, Compliance Officer at Rishel Consulting Group

W

hat does “fair housing” mean to you?

You probably don’t feel like you would ever discriminate against anyone who might want to buy a home from you. You are a professional when it comes to selling, and you are friendly with everyone. But could you be asking questions that would violate the fair housing laws?

Most retailers and their sales personnel focus on attracting prospects and then converting those prospects into sales that can be financed. Very few, if any, retail personnel would limit those sales by discriminating against prospective customers. They certainly don’t think the Fair Housing regulators would find anything wrong in what they are doing.

Fair housing says that we cannot discriminate based on several factors such as race, ethnic group, age, sex, religion, familial status or disability. Federal laws have several protected groups, but many states and even local jurisdictions can add to the list of protected classes. These are

the commonly understood areas, but during the last 10 years, more and more protected classes have been added for potential protections.

Many savvy retail organizations routinely pull credit on prospective customers early in the sales process, in part to comply with federal laws regarding the Red Flag Rule, the OFAC statutes, and the anti money laundering laws. With the

advent of the SAFE Act and the newer steering rules, many operations also use those credit reports to do their own behind the scenes analysis of what the customer can actually afford to buy, and the chances of the customer obtaining financing and on what terms.

Doing all of this not only keeps the operation compliant with all of those federal requirements, but it also allows sales personnel to steer customers toward what they can afford, making a successful sale more likely.

Unfortunately, if not handled correctly, a retailer could end up in a lawsuit or experience a regulatory action based on new court rulings on “disparate impact”. It is not the pulling of credit that is the problem. That should be done with every prospect. But what the sales person does with that information, and more importantly, what they say to the customer as a result of that knowledge is what’s important here.

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FA I R H O U S I N G

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Some states have new rules in regard to protected classes. In a complete turnaround from just a few years ago, a retailer cannot discriminate against individuals with dishonorable discharges, and others even protect those convicted of sexual predatory offenses. It is important to know and understand all of the protected classes and how to deal with any situation involving them.

Advertising has become a minefield of potential violations, and many terms used in the past, viewed as helpful, have become flat out violations of law. As a result, anyone empowered to create advertising for your dealership needs comprehensive training and written policies and procedures to follow.

Advertising goes far beyond print and the web. The guest register should contain a Fair Housing logo as should emails to customers and all other means of prospect communication. The correct Fair Housing posters should be on the walls of the sales office and on business cards. All of this will go a long way to dispel any thoughts of lawsuits against your retail operation, and defending it against regulators.

A very large Illinois retailer of modular homes was set up by a competitor a number of years ago and ended up in an expensive and protracted battle with regulators. Today that same retailer has signage everywhere in their sales offices and written policy and procedure

manuals directing employees on how to comply with the laws.

In addition, every new employee receives formal training within 30 days of hire, and all employees receive a full day of training once a year. They learned, and take the issue seriously.

Sales conversations when unguided also can be dangerous.

Employees need to be trained in what they can and cannot say to further a sale, and how to handle customers who might have disabilities or language barriers. Here are some examples where retailers have been either sued or fined.

“Is your wife coming to look at the home with you?” No experienced sales person expects much from “one legged” presentations, so that may seem like a natural question to ask. Unfortunately, phrasing the question that way is an

Sales conversations when unguided also can be dangerous.

Employees need to be trained in what they can and cannot say to further a sale. automatic violation of fair housing laws.

In order not to violate fair housing statues, you may want to ask if all the decision makers are coming to look at a home or homes, but don’t assume that it is a spouse.

“You have such an interesting accent.

Where are you from originally?” What you might think of as rapport building resulted in a fine because it was seen as

20 | MHINSIDER™ • MARCH 2018 TUNICA SHOW GUIDE • MHINSIDER.COM

an intent to discriminate against someone for their ethnic origins.

“This home has three bedrooms.

How many children do you have?”

Although this seems like a worthwhile question, you should not ask about family size or makeup.

“There is a Catholic Church about one block away from where you may want to set your home. Are you by any chance Catholic? “ Never ask about religion or advertise that a home is near a church.

“I don’t think this home is for you since you are in a wheelchair. The law requires you to let the prospect make up their own minds about whether they can live in a certain home. You can’t make suggestions. You can however offer door and hallway dimensions as facts to help them make up their own mind.

“You can’t bring that animal in here.

We have rules against animals in our offices and/or model homes.” If you are a retailer who is selling homes to be set up where the buyer wants it, why would you risk a sale over a pet? Even if they show up with an ocelot why should you care as long as it is restrained, unthreatening, and hopefully housebroken. And yes, retailers have been sued over this issue.

Determining what is and is not a service or support animal is another problem that retailers should address. In many areas of Fair Housing and the Americans with Disabilities Act there are differing standards and requirements based on who the provider is. It can be very confusing especially if the retailer is using Google, Google & Google as their law firm.

To top that off, there are many sources of absolutely incorrect information and guidance, including from many law firms. Retailers need to find real experts who understand the nuances for help in these areas.

Retailer are required by federal law to have a working Compliance Management System that includes Fair Housing and the Americans with Disabilities Act among the other laws and Rules also requiring the same. From a business point of view, it only makes sense because a professionally designed system will greatly lower the risk of regulatory action and lawsuits that are growing in number year by year. MHV

2018 SHOW SPONSORS

SHOW HOURS MONDAY, March 19th Pre-Show Golf Tournament (Sponsored by SCMHI & Sunshine Homes)

TUESDAY, March 20th

8am – 11am........Pre-Show Seminars 11:30am – 12:30pm.........Sponsored

Light Lunch

for Suppliers 1pm – 5pm...............Exhibits Open

WEDNESDAY, March 21st 9am – 5pm.................Exhibits Open

11am – 1pm....................... SCMHI’s Hospitality Luncheon

THURSDAY, March 22nd 9am – 3pm............. Service/Supplier

Exhibits Open 9am – 5pm...........Mfg Exhibits Open 11am – 1pm....................... SCMHI’s Hospitality Luncheon 2pm............................Promotional

Money Giveaway

(Manufacturers’ Area)

GOLD Champion Homes - Benton, KY - Dresden, TN - Athens, TX Electrolux Major Appliance Hollywood Casino and Hotel MHVillage.com Resorts Hotel and Casino SILVER Blevins, Inc. CIS Home Loans CSL Financial, LLC Kabco Builders, Inc. La Salle Bristol / Congoleum

Platinum Homes Sunshine Homes UFP Haleyville, LLC BRONZE 21st Mortgage Corporation 2-10 Home Buyers Warranty American Modern Insurance Group BBC Distribution Cappaert Manufactured Housing Inc Cascade Financial Services CountryPlace Mortgage, Ltd. Credit Human Federal Credit Union Dave Carter and Associates Deer Valley Home Builders, Inc. Fleetwood Homes, Inc.

Franklin Structures Lexington Homes N. Tech Industries, LLC dba Harbor Floor Products NorthPoint Commercial Finance Oliver Technologies Patrick Industries Posey Supply Senco Brands Shaw Industries StyleCrest, Inc. Tag Lending Triad Financial Services UFP Distribution, LLC WESCO International Wilkins Mobile Builders

Business Building Seminars Organized by Ken Corbin

Tuesday, March 20th

Resorts Hotel – 2nd Floor, Magnolia Room

8:00–8:30am

Today's Fannie Mae

Speaker: Paul Barretto, Manufactured Housing Initiatives.

Fannie Mae’s Better Than Ever! Paul leads manufactured housing initiatives and industry outreach for the Single-Family Customer Solutions – Duty to Serve team at Fannie Mae. He is responsible for the product management and development of the company’s manufactured housing solutions. Paul had an integral role in developing Fannie Mae’s Single Family Manufactured Housing Underserved Market Plan under the Duty to Serve rule. He represents Fannie Mae as a member of the Manufactured Housing Institute and actively works to understand the challenges facing manufactured housing and the markets they serve. Paul’s work is an important part of Fannie Mae’s mission.

8:45–9:15am

Social Media Magic

Speaker: Darren Krolewski, MHVillage

The top area most community owners and retailers lack knowledge in our industry to engage today’s customers. It’s also the fastest growing marketing segment not only in manufactured housing & communities, but all consumers markets! This program will detail step by step instruction on how to: reach people who have a specific interest in your homes or community, use mobile dominance on smart phones and tablets, get higher conversion rates to your website, gain upwards to 100% higher lead-to-close rates than outbound marketing.

9:30–10:15am

Selling the American Dream of Home Ownership Speaker: Ken Corbin, CallKenCorbin.com

The 2018 Tunica Manufactured Housing Show is produced and managed by Show Ways Unlimited, Inc. To exhibit at next year’s show, contact Dennis J. Hill, Show Coordinator at (770) 587-3350.

Tunica Show photos courtesy of Johnston Photography

America’s #1 Sales Program. Ken’s message is clear, rich, memorable and directed exclusively to retailers and communities. You’ll leave motivated to create positive change; armed with the simple tools to sell more homes. In addition, free workbooks will be given to everyone who attends! Topics include: how to increase home sales, how to triple prospects and not spend more, how to easily follow-up with customers, how to sell more, spend less and increase margins.

10:30–11:00am

Managing Single & Multiple Location Communities Speakers: Spencer Roane, Pentagon Homes and

Tammey Thomas, Cato Communities

The Fastest Growing Segment in our industry. Owners and investors are looking for better ways to: use best-practices to manage operations, increase valuations and enforce community regulations, continually upgrade both the residents and homes, employee training and compensation, and fill empty spaces.

201 8 TUNICA SHOW

A Word from the State Association Directors

T

o help keep MHInsider readers acquainted with state-to-state trends and topics, we have asked a pair of questions of the MH association directors from the Alabama and Mississippi, which comprise the South Central Manufactured Housing Institute responsible for putting on The Tunica Show. The first question relates to state-specific trends and the second opens up to more national, industry-wide opportunities.

What is the most interesting in-state trend or change you’re seeing?

“Definitely the role that social media is playing, especially from a marketing standpoint. Facebook and Instagram allow manufacturers and retailers to micro-target potential homebuyers and give them a taste for the homes before they even step foot on the retailers’ lots. Social media also allows associations like ours and other advocacy groups to answer consumer questions and address consumer concerns and misconceptions in a direct way while also marketing the industry as a whole – and all of this can be done for a fraction of the price of traditional media sources, which allows retailers and associations of any means to still be able to effectively reach target audiences.”

– Lance Latham, Deputy Director Alabama Manufactured Housing Association

“A lot of families just really love that can choose what they want, a single section or multi-section home with all the features they want. We’re still very much a rural state,

and you can buy land at a relatively reasonable price. And you can put a manufactured home on that land.”

“In Mississippi what we see is a lot of people who live in the country, they have parents who become elderly, and they can put a single section home on the property within view of their home so parents can have independence but are close enough to look after and check on. That’s a really good option, and one that’s more economical than assisted living. A HUD home with a little cottage porch built to ADA standards can do a lot.”

“The other side is young couples getting married and putting the home on an acre of land as a starter home. They may expand it or get a multi-section home when they start to have kids. There are a variety of floor plans so you can have the bedroom for parents on one side of the home and the children’s on the other. Special orders offer a lot more to the customer than going to pick something off the lot. Manufactured housing is not transitional housing, it’s a house for life and a house for living.”

– Jennifer Hall, Executive Director Mississippi Manufactured Housing Association

What do you feel is the biggest opportunity in the industry through 2018?

“The biggest opportunity is the changes coming at HUD and Fannie Mae and Freddie Mac, followed closely by the tax cut legislation passed late last year. These changes will speed up delivery of the homes, make homes more affordable for the homebuyers, and create financing options for homebuy-

ers that have been limited or nonexistent before now. All of this together makes for a bright future for the manufactured housing industry and our customers.”

– Lance Latham, Deputy Director Alabama Manufactured Housing Association

“Looking forward it’s really the continued education about what manufactured is, from a Facebook advertising campaign, talking about energy efficiency or big campaigns.

My hat’s off to Clayton for the campaigns they’ve developed. That message was loud and clear about what manufactured housing today is, and a lot of people don’t see that, they just haven’t been introduced.”

“There is a huge market out there that I think doesn’t really understand all that’s available, and we as an association and industry have to continue to market and get that message out there. What I think we’re seeing is an industry recovering from a pretty difficult time, and when there was a lull there in advertising. And to all groups, including millenials, we need to express how many needs we can meet with what can be an amazingly self contained and low maintenance home, sometimes with a smaller footprint. We just always have to be open to change and listening to what the public wants. There is not one size fits all, you build what people want. And our industry, guess what, you can build something very affordable or something very elaborate. Our skilled trades are doing it every day.”

– Jennifer Hall, Executive Director Mississippi Manufactured Housing Association

MHINSIDER.COM • MARCH 2018 TUNICA SHOW GUIDE • MHINSIDER™ |

23

First Bank...................................................................86, 87 Frog Attachments, LLC..............................................42, 43 *Gama Sonic Solar Lighting.......................................44 Heritage Distributing, Inc.................................................17 HMH Supply, Inc. / DEHCO, Inc....................................... 12 HomeCarePlus (Diversified Profits, Inc.)..........................31 Jamies Interior.......................................................... 88, 89 *Johnson Controls........................................................29 Land Home Financial Services, Inc...................................9 Lone Star Wheel Components, Inc........... Outside Display Louisiana Pacific Building Products.................................71 Manufacturedhome.loan...................... Next to Safe Porch Manufacturedhomes.com.........................................27, 28 MHVillage.com........................................................... 73, 74 MHWC................................................................................3 Minute Man Products, Inc............................................... 18 Mobile Home Depot, Inc.................................................82 *Modularhomes.com............................................ 25, 26 N. Tech Industries dba Harbor Floor Products............... 37 NADAguides............................................................... 80, 81 Newport Pacific................................................................83 Next Step Network..........................................................72 Nortek Global HVAC........................................................23

*Active Ventilation Products, Inc.............................. 61

American Insurance Alliance............................................14

American Modern Insurance Group..................................8

Atlas EPS..........................................................................58

*Auto-Out Cooktop Fire Protection..........................64

Baymont, Inc............................................................. 66, 67

Bennett Truck Transport, Inc............................................13

Blevins, Inc..........................................................55, 56, 57

Building Plastics, Inc. (BPI)........................................20, 21

CANA Cabinetry........................................................ 35, 36

Cascade Financial Services..................................... 84, 85

CIS Home Loans............................................................4, 5

Cordell International.................................................. 40, 41

Country Place Mortgage.................................................52

Credit Human Federal Credit Union...............................39

Croft, LLC.........................................................................22

CSL Financial, LLC.................................................... 69, 70

Cutting Systems, Inc.................................. Outside Display

Cypress Creek Manufacturing.........................................45

*eLend............................................................................. 47

Electrolux Major Appliance......Next to 2-10 Home Buyers

*ESCO..............................................................................46

BOOTH #

21st Mortgage Corporation................................. 77, 78, 79

COMPANY NAME Everlock Systems.............................................................34

BOOTH #

2-10 Home Buyers Warranty..........End of Booths 35 & 54

COMPANY NAME

BOOTH #

*New Exhibitors for 2018

WESCO Distribution, Inc..................................................30

*VMF Homes..................................................................63

*Vanderbilt Mortgage and Finance..........................62

UFP Distribution, LLC.....................................48, 49, 50, 51

Tri-State Distribution, Inc...........................................75, 76

Triad Financial Services, Inc..........................................6, 7

Translift....................................................... Outside Display

Tie Down Engineering.............................................. 53, 54

StyleCrest, Inc................................................................ 1, 2

Strong Skirt..........................................Outside Display, 68

Shaw Industries........................................................ 59, 60

Senco Brands, Inc............................................................. 11

Sedco Pier........................................................................ 19

Safe Porch Storm Shelters..............................................24

Rustique Enterprises, Inc................................................ 15

*Rent Manager..............................................................65

Remote Trax............................................... Outside Display

RainMaker Software........................................................ 10

R-Co Products Corporation.............................................38

Oliver Technologies.................................................. 32, 33

Northpoint Commercial Finance..................................... 16

COMPANY NAME

SERVICE & SUPPLIER EXHIBITORS

2018 Tunica Manufactured Housing Show

Service & Supplier Exhibit Area Map

MHINSIDER.COM • MARCH 2018 TUNICA SHOW GUIDE • MHINSIDER™ |

25

201 8 TUNICA SHOW

Manufacturer Exhibit Area Map

26 | MHINSIDER™ • MARCH 2018 TUNICA SHOW GUIDE • MHINSIDER.COM

NEW PRODUCT

Photo Courtesy of Hamilton Home Builders From left: co-owners Jeff Hood, Heath Jenkins and Brad Mikels in front of the first home off the line early this year.

28 | MHINSIDER™ • MARCH 2018 TUNICA SHOW GUIDE • MHINSIDER.COM

NEW PRODUCT

Manufacturers Bring Best New Offerings to Tunica Builders Upbeat in Busy Market

W

hen attendees talk to home builders at the Tunica Manufactured Housing Show about new product, they may be surprised at just how new it is.

“We started production on Dec. 18, me and a couple partners, including Brad Mikels, who I worked with at River Birch Homes 20 years ago. That was a start-up, too, so we’re at it again,” Builder Jeff Hood said. “But this time it’s ours. We own it.”

Hamilton Home Builders The small Alabama town of Hamilton has been a center for home building for

their new independent home building operation, it seemed clear the name should be Hamilton Home Builders. Rather rolls off the tongue, yes?

“We’ve had mobile home plants in our town as long as I can remember, and no one has ever used the name of the town.

All the more reason to do that,” Hood said.

“We even decided to have our logo reflect the colors of the local high school. There’s a lot of pride in this place.”

Hamilton Home Builders is new, but it’s talent is seasoned. And productivity shows this to be true. The first complete home rolled off the line on Jan. 8 and it wasn’t long before his team of 130 employees built 50 floors.

Photo Courtesy of Hamilton Home Builders

“ I’ve been working my tail off but having a good time. We want people to say about us that it was ‘the best place I ever worked’.

We want this place to be a family place.”

– Jeff Hood, Co-owner of Hamilton Homes

decades. In fact, Hood’s new operation is based in the 19,000 square-foot former Buccaneer Homes plant. They also have a dedicated cabinet shop.

When Hood, Mikels and their third partner, Heath Jenkins, began to plan for

“By the time we get to Tunica we’re going to have way over 100 floors built, just in the first 90 days,” Hood said.

“We did four floors a day last week.

That’s pretty phenomenal in that short period of time.”

What Will Hamilton Show at Tunica?

Hamilton is running exclusively single wide homes, and they plan to keep it that way as long as possible. The market is good for it, and when everything is running efficiently, there’s no need to make wholesale changes so early in the process.

One of the standout features of the new middle-price, single-section home is the metal roofing system.

“That’s a little bit outside the norm, but I didn’t want to fight the shingle issue with them flying off during transport or in high wind,” said Hood, who started in the business in 1992. “It costs more money to start with a metal roof, but the end user has a better system.”

The company has five models and will bring two to Tunica, all open floor plans with nice big bathrooms, a big shower stall and tub.

“They’re all three bedroom and two bath setups. There’s a lot of pantry space and some nice cabinetry,” Hood said.

It’s important, Hood noted, to give the customer a little bit of what they expect and little bit of what they don’t.

He’s spent years studying floor plans, adapting the lines and flow of the home, seeing what’s selling and working toward a signature offering.

“One of the prints I’m carrying is a proven seller that I’ve been successful CONTINUED ON NEXT PAGE

MHINSIDER.COM • MARCH 2018 TUNICA SHOW GUIDE • MHINSIDER™ |

29

NEW PRODUCT

CONTINUED FROM PREVIOUS PAGE

Photo Courtesy of Hamilton Home Builders

with,” Hood said. “It’s that kind of business where we can pluck a bath model out and put a kitchen in here. You can move the wall around if you want.

“And we will be selling into the southeastern markets that I’ve been serving for all these years,” he said. “It’s a relationship business. We develop relationships with these retailers all over the place, and we know their families. You can become lifelong friends… I know someone within 50 miles of anywhere.”

Kabco Builders Kyle Bennett, the general manager of Kabco Builders in Boaz, Ala., said the independent builder will bring six homes to the Tunica Manufactured Housing Show; five multi-section homes and one 16x80’ single section home.

“When it comes to Tunica, we bring out new floor plans and new ideas, whether its new wood trim or molding through the house, the color of wall board or carpet and that kind of thing,” Bennett said. “You’re coming out with new ideas and showing them. A lot of what we’re doing the last year or so is rustic interiors, like rough cut crown moldings and barn doors. That’s what we’re looking at this show.”

New colors for their homes are plantation brown, grey wash and white wash, which their using on a signature interior barn door.

“It’s basically sanded down and white stained,” Bennett said. “It’s pretty sharp and we’re excited about it.”

Beyond design and architectural decisions, Kabco is looking at becoming more competitive at certain price points

“You’re looking at price points you need to hit, and adding in some of those trends on porches and interiors, and focusing on what you’re missing in the market.”

Bennett said the last decade has been a complete makeover for many manufactured home builders. The quality, the value, the interesting lifestyle features builders today are striving for is impressive. And that’s something that keeps every day fresh.

“We don’t want to do the same thing twice,” Bennett said. “It keeps it fun and exciting. Everyone has had to adapt and change. But everyone has done a good job of it, changing and getting better.

It’s good stuff.”

Deer Valley Home Builders Chet Murphree sells “Heavy Built Homes” in the southeast, spending money on systems and materials he believe will help save the homeowner money in the long run. “We’re focusing on energy efficiency so that people can get a fixed mortgage and really plan and understand

Photo Courtesy of Kabco Builders

“ We’ll make changes in the final two weeks before a show. I’ll have a floor plan we build, then I’ll walk through it and pick out a few things to help make it better. We get it exactly how we want it.”

– Kyle Bennett, General Manager of Kabco Builders

in the market where they can gain some ground, grab a “bigger piece of the pie”.

“You have your proven floor plans, and you really don’t want to bring that to Tunica,” he said.

30 | MHINSIDER™ • MARCH 2018 TUNICA SHOW GUIDE • MHINSIDER.COM

what they’re going to be spending,” Murphree said. “We offer more for less in terms of net outflow.

CONTINUED ON PAGE 32

NEW PRODUCT

Photo Courtesy of Kabco Builders

NEW PRODUCT

CONTINUED FROM PAGE 30

Photo Courtesy of Deer Valley Homes

“ We’re moving high end homes for the southeast. We’re going after 90 percent of the stick rather than 10 percent of the HUD buyer.”

– Chet Murphree, Deer Valley Home Builders

“We don’t cut corners,” he said. “I can go buy inventory for a lot cheaper than we do, but if it doesn’t work as well as you like you’re not going to see it in our home.”

His builders install a radiant heat barrier on the roof decking – TechShield

made by Louisiana Pacific. They use low-e glass, non-expandable insulation, and R8 for their optimized duct work.

Deer Valley Homes sell in Texas, and the regulatory demands for energy efficiency are among the nation’s most stringent.

Photo Courtesy of Deer Valley Homes and Johnston Photography

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“We’ve had to learn how to get our homes extremely tight to get through this,” Murphree said. “It’s more than most stick builders do.”

For the Tunica Show, Deer Valley will bring a pair of twin-section homes.

They’ve been using shiplap walls in grey or espresso, a selection of KCMA certified cabinets, glass mosaic backsplash and accents and Whisper Quiet fans.

“This is more than driving nails and raising walls,” Murphree said.

“Our buyers want Travertine Stone walls, luxury vinyl plank flooring and more indoor/ outdoor space.

“Last year at Tunica we had a good response,” he said. “And we’re going to add a few more turns without straying too much from the success we’ve had.” MHV

FINANCE

Does Ownership of a Related Finance Company Make Sense for a Retailer?

By Ken Rishel, Managing Partner at Rishel Consulting Group

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FINANCE

S

hould I start my own related and to obtain MLO licensure for one or retail personnel must be diverted and finance company? This is a fre- more people. Assuming that existing go through the process for licensure. quently asked question all over the personnel can be utilized, then time away The new entity must secure licensure country by independent retailers. from their other duties must be available in the state or states in which they Unfortunately, there is no easy to first learn what they need to know, intend to operate. Equipment and forms, answer, because a variety of factors will then actually handle the operational side software, and legal documents must be ultimately decide. of the lending operation. secured. A written lending policy and The first question that credit matrix must be needs answered is what created. In all, there will state or states is the retailer be considerable work and considering for the related money expended in getor captive finance operation ting a lending operation in? Some states have very up and running. complex and expensive liSo, why would a retailcensing requirements while er even consider starting other states are relatively a related or captive fieasy and inexpensive. The nance company in the more difficult the state first place? The answer requirements, the more is simple. The increased loans the retailer must plan sales volume and the to make to justify licensure. stable income increase The second question from the resultant loans revolves around the type is dramatic and can of loan the retailer is easily triple the profits contemplating. Will these generated by the current be all chattel loans, or will retail operation. some or all of them be This happens because Why would a retailer even consider starting mortgage loans? Some of the normal “outside” a related or captive finance company in the same states that are lenders only buy about relatively easy to license a third of the customers’ the first place? The answer is simple. The in for chattel lending are homes that could be sold increased sales volume and the stable income much more difficult when and financed. Many increase from the resultant loans is dramatic it comes to mortgage loans. retailers make empty and can easily triple the profits generated In some states, the unfortusales with a customer nate lender may need two willing to buy but lacking by the current retail operation. licenses, one for chattel and a lender willing to finance one for mortgage loans.

Before making the very first loan, the the purchase. Historically, many of those To reach an accurate answer, the type related or captive finance operation is, customers can be successfully financed of loan, the state or states in which the in addition to handling the license issue, by a related or captive finance operation, related finance company wants to going to need to set up a compliance man- thus resulting in many more sales. operate, and the number of loans ex- agement system to deal with the 20-plus Given the enormous upsides to starting pected need to be factored together into federal laws, rules and regulations in play. a related or captive finance company, the an equation to determine the economic This is going to require an additional in- question then becomes, “Why isn’t every sensibility of starting and operating a vestment in outside expert assistance and retailer doing it already?” The answer company to finance homes the retail time on the part of employees assigned to is that there are a number of retailers operation is selling. the lending operation. already doing it, but, it is not the right If the projected loan volume will In addition, a separate entity must be thing for all retailers. The rest of the support a related finance company in its set up to handle the lending operations, retailers may not even think it is possible licensure and operations, the next ques- and the necessary personnel either hired and may be missing out on the best thing tion should be about available personnel or shared with the retail operation. A they could add to their operation. who can be trained to run the operation licensed MLO must be found or current CONTINUED ON NEXT PAGE

MHINSIDER.COM • MARCH 2018 TUNICA SHOW GUIDE • MHINSIDER™ |

35

FINANCE CONTINUED FROM PREVIOUS PAGE

If a retail operation is not currently selling at least 12 homes a year already, then the operation is likely too small to successfully start and operate a related or captive finance company. There are other solutions they should be pursuing.

In difficult states to license and operate in they may need a volume of over 30 loans a year just to break even on the lending operation, even though the retail operation would be making more money.

Even in those difficult states however, there are retailers successfully and profitably running related finance operations.

In California, New York, Illinois, Pennsylvania and North Carolina there are highly successful operations that have been in place for over 10 years. There are at least five retailers (not tied to communities) that have loan portfolios in excess of $20 million, and many more whose loan portfolios are valued at over $5 million.

Obviously, independent retailers should consider what a related finance company could do for them as well as considering if they would have enough volume to justify doing so. The increase in potential profits are too great to ignore.

One recent startup lending operation was started because the owner realized he couldn’t find the set up help he needed to exceed 200 new homes a year, but, that he could find the white collar help he needed to run a lending operation. He came to the conclusion he could increase his profits by financing many of their sales through his own lending operation.

Another long-term retailer has increased his sales to three times what they had been in the late 1990s through the addition of his lending operation.

Is starting and running a related or captive finance operation the intelligent solution for every retailer? No, but every retailer that doesn’t seriously consider it is limiting their own ability to control their own destiny and their ability to prosper. MHV

Keep up with all the latest industry news online at: mhinsider.com

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• 3, 4 & 5 STAR Communities - Senior and All-Age • 5, 7, 10, 12, 15 & 30 year fixed – I/O is available • 80% LTV (acquisitions) 75% LTV (cash out refinances) • Supplemental Financing (2nd Mortgage) – available after 12 months • Up to 25% Community owned homes allowed FOR MORE INFORMATION: OWEN BREHENY | (O) 212.521.6371 | (C) 347.563.3753 | owen.breheny@huntcompanies.com JOSH MESSIER | (O) 212.588.2102 | (C) 201.232.4526 | joshua.messier@huntcompanies.com

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Capital CASH provides capital to purchase new homes including setup expenses.

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Consumer Financing (NEW AND USED) Affordable consumer financing with 12-23 year terms is available for all credit scores on homes you own in your community. We offer financing options for 1976 homes and newer with a minimum loan amount of $10,000.

Rental Home Program Is your customer not quite ready to own their home? No problem, 21st will finance the rental home to your community, while offering you a low down payment, low interest rate, and a 10-15 year term.

Outlined Marketing Support We supply marketing materials for your community at no cost. Our staff will also consult with your team on effective marketing strategies for your community.

Customer Lending Support A dedicated 21st Mortgage MLO (Mortgage Loan Originator) is provided to assist customers through every step of the process.

R E TA I L E R

Ask the Retailer

With Shane Upshaw, owner of Magnolia Estates of Vicksburg and Brookhaven, Miss.

How long have you been operating Magnolia Estates?

Magnolia Estates

http://www.magnolia-estates.net/ 1333 Hwy 61 South Vicksburg, MS 39180 Phone: (601) 631-0327 Fax: (601) 631-0291 Toll Free: (800) 274-0763

“This is my 25th year of operating Magnolia Estates.”

What brands do you sell?

“It’s a laundry list. There are only two retailers in my market so I’m able to carry a lot of them. We have Champion, Lexington Homes, Franklin, Deer Valley, Southern Energy, Cavalier, Platinum and Tru. That’s all of them.”

What mix of customers do you have in regard to percent of homes for private land versus land-lease community?

“That’s where we’re a little different here. In Mississippi, we have small parks and some zoning issues. We’re right at about 90 percent for homes on land, and only about 10 percent go into parks.”

Is the average home you sell increasing in size, getting smaller or staying about the same?

How much house are people buying?

“I’d say over the last four or five years there hasn’t been a lot of change. Over 25 years, and particularly the last 15, they’ve gotten a lot larger. You know, more multi-section homes and even the multi-section homes are just getting larger.”

How many homes/sections do you sell annually?

“Over the last three years we’ve averaged about 220 sales per year. We might not sell a home for four or five days and then have a day when you write four, so it averages out.”

What customer trends do you see in terms of use-of-space and/or lifestyle amenities/materials choices?

“More and more want a kind of open floor plan where the kitchen – living room. And a big kitchen is a more popular thing that we’re selling more of. The multi section homes particularly

Shane Upshaw Owner

533 Highway 51 North Brookhaven, MS 39601 Phone: (601) 833.9998 Fax: (601) 833-9493

are getting a bigger laundry room. This hasn’t changed for 10 years, they want a bigger master bath, something plenty big for a married couple and something with a lot of closet space.”

How do you assist your customers in the finance of the home? How are most people buying where you are?

“We’re about 50 percent home only chattel loans through our industry lenders, and after that we’re 30 percent cash.

That’s the higher end customer we’re starting to attract who have just sold a home or have retirement savings they can use.

There’s about 10 percent land-home and part of that is because we really don’t have a good land-home program.”

What is your average time from order to set up?

“Last year it was about 3 ½ to four weeks, now it’s minimum 15-20 weeks. Before FEMA we had started seeing backlogs increasing, getting up to eight or ten weeks on market demand alone, then it almost doubled when FEMA came in. I don’t see it coming down, and that could hurt our numbers for the year.

Time kills deals, the longer it takes the more chance there is of it going away.”

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Photo Courtesy of Magnolia Estates

What is the most common add-on feature in your market?

“We’re doing way more concrete foundations, lot improvements and driveways than we used to. People now are coming in and asking for the quality material in the house, we recommend that they put it on an engineered poured foundation to help with the longevity of the product. They’re a permanent solution for more of our customers than it used to be. That’s a big part of our growth.”

What about working in Mississippi might surprise industry professionals from other regions?

“The percentage of new buyers, first time manufactured home buyers, so it’s not the hourly employee, $40,000 per year family. We’re competing in the stick-built market. More and more of our buyers are looking at their last home purchase.”

Why do you feel it’s important to come to events like The Tunica Show?

“I was going when it was in Nashville, and I’ve never missed a year. You want to see the changes in the market, and lot of our manufacturers are more up to speed on what the buyer is coming to find. Our inventory is the biggest investment we have, and you can’t do that over the phone. You have to go look. And of course I see friends and colleagues from five or six other states who I’ve known for 25 years. And, we don’t talk shop to our neighbors, but we can talk shop there. That’s a big part of it.”

How have you seen your business evolve over the last few years?

“One of the biggest thing on the retail level is our marketing.

A few years ago we’d spend 10,000 to 12,000 a month on print ads, radio and TV. At first I wasn’t sold on it, but recently it’s 40 | MHINSIDER™ • MARCH 2018 TUNICA SHOW GUIDE • MHINSIDER.COM

all about Internet-based, social media. It seems crazy that we could sell a home without the buyer ever coming to the home, but that’s where it seems it’s going. People used to make seven trips to the dealership before they’d buy a home, and now it’s not nearly as many visits. The customers do so much research and make so many decisions on the web.”

What do you think this year is going to be like for the industry?

“I think it will be better, and continue to improve slowly in part because I think we’re getting a larger piece of the home buyer pie. Finance options will improve. I know manufacturer shipments will be up tremendously. I’ve seen more low-end product produced than in previous years. It’s kind of going back to the late ‘80s and ‘90s. It’s good we’re able to offer that product, because it’s selling out of need. Sometimes the simpler the product the easier it is, so you might have more of that lower-end.”

What do you think is the greatest challenge facing the industry?

“For folks like me, retailers, especially in the first part of the year, it’s getting product. How timely will homes be built?

Part of that is increase buying, but the FEMA percentage of homes being produced is almost like a competitor. That’s going to be a challenge. Our first quarter will be down because of backlogs, and I think our second quarter will be down too.

That will affect sales.

And there’s always a lot of the challenge with image, getting away from the mobile home days. We’re making strides over the last 10 years. Your image, the appearance of your sales center, the professional nature of the staff. People feel more comfortable buying in a place that is put together. It’s an investment, not an expense. Some people look at it the other way, but having a well-kept place will pay dividends.” MHV

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R E TA I L E R

Ask the Retailer

With Brent Harris, from Southern Homes of Tupelo, Columbus and Batesville, Miss.

Photo Courtesy of Southern Housing

Southern Housing

https://southernhousing.net/ Tupelo 2501 S Gloster St Tupelo, MS 38801 (662) 566-9903

Columbus 6610 HWY 45 N Columbus, MS 38706 (662) 5610-0105

Batesville 23655 HWY 6 Batesville, MS 38606 (662) 561-0105

How long have you been operating Southern Housing?

“Twenty-two years we’ve been in business.”

What brands do you sell?

“We sell Champion, Deer Valley, Franklin and Clayton Homes.”

What mix of customers do you have in regard to percent of homes for private land versus land-lease community?

“We are about 96 percent private land. The Jackson area may have another 10 percent buying for communities, but throughout the state it’s primarily purchases for private land.

In rural Mississippi everyone has land. You know, granddaddy is going to give you an acre. It’s totally different than other markets to the north.”

Is the average home you sell increasing in size, getting smaller or staying about the same? How much house are people buying?

“They’re always getting bigger. The last couple years it’s stabilized. You can go to a triple section and basically get as big as you want. I do feel like we’ve built them about as big 42 | MHINSIDER™ • MARCH 2018 TUNICA SHOW GUIDE • MHINSIDER.COM

as you’re going to get though. We have a high-end customer, but we sell every point on the scale. Our average sale price is about $80,000. We have sold a lot of numbers in that $50,000 to $80,000 price point.”

How many homes/sections do you sell annually?

“Company wide we probably sold 260 homes last year.”

What customer trends do you see in terms of use-of-space and/or lifestyle amenities/materials choices?

“You’re definitely seeing more buyers wanting sheet rock.

Customers are realizing now that we don’t sell a trailer house.

Solid surface countertops, nine-foot ceilings… We have customers coming in who already know they’re only buying

R E TA I L E R

Photo Courtesy of Southern Housing

Deer Valley, or they have a model number they come in with, and that’s good for us. Sixty percent of our inventory is very high end, so we like that customer.”

How do you assist your customers in the finance of the home? How are most people buying where you are?

“I’m going to say 80 percent of our customers use land-in-lieu financing. The other 20 percent is chattel lending. But there are more local banks getting in the game than ever before.”

What is your average time from order to set up?

“We are anywhere from eight to 12 weeks. We have a really good relationship with our manufacturers, and if we need them to, they will move our homes up.”

What is the most common add-on feature in your market?

“It’s getting more and more common that the customer wants you to build them a porch on, or put in dormers, cedar shake and that type of thing for curb appeal. We sold 10 triple wides last year, and they all have that look of a site-built home. I think everyone wants that, but not everyone can afford it.”

What about working in Mississippi might surprise industry professionals from other regions?

“I’ve only done one off frame modular home in 20-plus years, and that one went to Tennessee. Mods are not a big deal here. That’s probably because you can put a HUD code house pretty much anywhere in the county. Unless you’re in city limits, there’s no need to pay an extra $20,000 for a crane and that modular set up. I think that’s a pretty interesting difference here.”

Why do you feel it’s important to come to events like The Tunica Show?

“I think it’s very important, to see the new trends, talk with industry professionals and gain opinions on where they are. You get to see new product. It’s a no brainer for anyone who’s serious and successful in this industry.”

How have you seen your business evolve over the last few years?

“The most amount of change we’ve seen is the level of information the customer has. Ten years ago there was more of a stigma about our product, and today there is so much pride of ownership. A lot of the site built market is coming to us.”

What do you think this year is going to be like for the industry?

“It’s going to be a great year. Everyone is pretty optimistic about the economy. In the last three years we’ve seen a gradual turn, and last year in particular there seems to be a new confidence. Consumer confidence is great. More banks and finance companies are coming into the industry, too, which is always a great sign. I think it’s going to be great for another four or five years.”

What do you think is the greatest challenge facing the industry?

“I think the biggest challenge facing the industry is keeping this momentum and keep up with the expectation of the customer. We have to keep the quality up and the price point in place. People always want bigger and better, and it’s about finding that sweet spot.” MHV MHINSIDER.COM • MARCH 2018 TUNICA SHOW GUIDE • MHINSIDER™ |

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MARKETING

We’re in a world dominated by the Internet, mobile devices and social media.

What are the things you should focus on in today’s environment of everchanging technology?

44 | MHINSIDER™ • MARCH 2018 TUNICA SHOW GUIDE • MHINSIDER.COM

MARKETING

Getting Back to the Marketing Basics in a Digital World

By Darren Krolewski, Co-President and Chief Business Development Officer, MHVillage®

B

ack a dozen or more years ago, long before I joined MHVillage, I was a partner in a consulting firm that was active in the manufactured Darren Krolewski housing industry.

Among our clients, we worked on behalf of several manufacturers to coach their retailers and communities on successful marketing techniques.

In those days, we were doing several hundred consultations a year throughout the country. Many of the companies we visited were already very successful, just needing a bit of optimization in a few key areas. Others had more significant marketing challenges to overcome.

But no matter where we traveled, my partners and I began to see a lot of the same mistakes: inadequate signage; poor business image, ineffective advertising; lack of prospect follow up.

You get the idea.

The process of identifying these marketing missteps became a checklist that we would run through when we consulted with a new client. Now, I’ll be the first to admit that many of these things I’ve mentioned may seem pretty obvious. But that’s the point. We learned that even the best marketers often lose sight of the basics and need a friendly reminder every now and then.

As it has been more than a few years since my consulting days, it got me thinking: what would that list of marketing basics look like today? We’re in a world dominated by the Internet, mobile devices and social media. What are the things you

should focus on in today’s environment of ever-changing technology?

Let’s take a look at a few marketing basics, updated for the digital age.

Is Your Website Mobile Friendly?

Have you ever noticed how websites look great whether you view them on your laptop, tablet or smartphone? That’s called responsive design, and it’s what enables a website to dynamically resize to provide the best possible user experience regardless of the device.

In the old days, we would talk about the importance of having a good website.

Now, the emphasis is on making sure your website is functional for the way the bulk of consumers will view it: from a mobile device. According to the most recent data from Google, mobile searches now make up more than 60 percent of all Internet searches, and that number only continues to grow.

While the concept of responsive design seems simple enough, the solution is more than just updating your website with the latest WordPress theme. Are the fonts readable on a tiny 4.7-inch smartphone screen as well as on that giant tablet-sized phone? Is the navigation intuitive? Can the consumer easily fill out your contact form or application from a mobile device? According to research cited by web app developer, Mobify, 30 percent of mobile browsers will never return to a website if the experience is not optimized for mobile.

If you’d like to get some insights on how search engines view your website, Google “mobile friendly test” and you’ll find a link to a tool where you can enter your web address and get an analysis of

Why is Digital Marketing So Important?

• Over 90% of buyers search online during their home buying process.

• Real estate related searches on Google have grown more than 250% over the past 4 years.

• 77% of first time homebuyers drove by a home viewed online.

Source: Google, “The Digital House Hunt”

your mobile readiness. It’s a great way to benchmark how search engines like Google are seeing your site.

Can Customers Find You Online?

Suffice it to say that pretty much everyone, across every age group, uses the Internet at some point during their home search. Indeed, the latest statistics from Google show that Internet usage CONTINUED ON NEXT PAGE

MHINSIDER.COM • MARCH 2018 TUNICA SHOW GUIDE • MHINSIDER™ |

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is well over 90 percent among home potential homebuyers, and more than 60 percent of these searches are made from mobile devices.

In the early days of search engine optimization, it was relatively easy to show up in a top position. You’d stuff a web page with the keywords you’d want to target, like “mobile homes in Tuscaloosa”, repeat the phrase in the header and domain name, and like magic you’d own it. Well, the search engines got wise to that technique a long time ago. Now if you want to have a top position you need relevant content. Or open your wallet to search engine advertising. Most of the time, you have to do a rich mix of both.

You may have noticed that when you search for something from your mobile device, a lot more comes up on your screen now than ever before: paid ads, local business listings, videos and social media pages, just to name a few. In the past, your company may have been at the top of page one in Google with your organic search results, that is, the nonpaid listings that show up when you do an Internet search. Even if you’ve been fortunate enough to maintain that same position today, you’re now halfway down the page after everything else that Google

puts before it. And if you were half way down the page before, now you’ve been bumped to the second page where views drop off exponentially.

Don’t worry. All is not lost.

If you can’t beat them, join them.

While it may seem like the simple solution would be to do paid search engine advertising and buy your way to the top, that’s an expensive proposition. Online

advertising is becoming more competitive and costs are going up, especially when a growing number of companies outside our industry are discovering that our manufactured home-related keywords

Failing to pay attention to your reputation online can be very costly.

We know that more than 75 percent of consumers base their purchase decisions on ratings and reviews. And, of course,

More than 75% of consumers base their purchase decisions on ratings and reviews are great at driving traffic to their industries, too.

A better solution is to start by making sure you have an up-to-date and complete Google My Business listing for any and all of your locations. It’s a simple process.

These local listings regularly appear ahead of organic search listings, most noticeably on mobile. They are particularly valuable when consumers do “near me” searches, which have grown by more than 140 percent on average, year over year.

Search engines place a lot of emphasis on these directory listings, as you can see by the priority Google places on Google My Business listings, and other directory sites like Yelp, the Better Business Bureau and MHVillage. In many instances, a community or retailer listing on MHVillage is one of the first things that will show up in the organic search results.

Another reason to maintain your listing is because of the rise of digital assistants like Apple’s Siri, Amazon’s Alexa and Google Assistant. These assistants, whether on a mobile phone or a smart home device, use directories and information sources such as Yelp and Wikipedia to provide answers to consumer queries.

How’s Your Online Reputation?

Of course, visibility online is sometimes a double-edged sword. As you may have noticed, search engines like Google also put ratings and reviews next to search engine results.

46 | MHINSIDER™ • MARCH 2018 TUNICA SHOW GUIDE • MHINSIDER.COM

people are far more likely to share a bad experience than a good one. While there are many web-based software tools to help you monitor your reputation online, one of the best solutions is to simply put a program in place to encourage positive reviews.

For example, if you go to the MHVillage professional blog at MHInsider.com, you can see an example of this invitation to leave a review in the sidebar of our website. This tool guides the website visitor through the process of leaving a review for us on Google, Facebook and a bunch of other sites that are relevant to our business.

Of course another way to build your reputation online is to simply to ask your customers. If you are an MHVillage advertiser, you know that we ask for a testimonial when a home is marked as sold on our website. Together with responding promptly to the occasional negative review, proactively asking your customers to leave reviews is a great way to stack the deck in your favor by diminishing the impact of negative reviews when they do occur.

Even when it comes to the basics, attempting to keep up with technology can be a daunting task. However, the good news is that while the marketing mix continues to evolve, the objectives remain the same: Make it easy for your best prospects to find you, earn their confidence and make them want to do business with you again and again. MHV

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48 | MHINSIDER™ • MARCH 2018 TUNICA SHOW GUIDE • MHINSIDER.COM

DEVELOPMENT

Photo Courtesy of Plantation Oaks of Ormond Beach

New Manufactured Home Community Set for Central East Florida

By Patrick Revere, Managing Editor for the MHInsider™

T

he effort it takes to build something new often is viewed as a troublesome necessity or a source of frustration.

In the case of a new manufactured home community, like one being developed in Ormond Beach, Fla., approval to clear and level, start utilities and lay out a site plan certainly is cause for celebration.

The development of a new manufactured home community in Florida last occurred about 15 years ago. The challenges include a difficult economy, zoning hurdles, investment barriers and the negative perception of a new manufactured home community.

New Construction About 310 new manufactured home communities were built nationwide during the last 15 years. Compare that with the 2,645 new communities during the prior 15 years, including 395 communities built during 1986-87 alone. It’s easy to understand why affordable housing advocates are concerned.

Ormond Beach Commissioner Dwight Selby serves Zone 1 where the new community is located. Additionally, he serves as treasurer for the Florida Manufactured Housing Association and co-owns the

nearby Shady Oaks manufactured home community.

“I think it’s important to stay focused on providing housing for all kinds of income, not just the rich and uber rich,” Selby said. “We have a huge gap in affordability. Most builders aren’t putting up anything below $250,000 - $300,000, and the developers at Plantation Oaks are coming in at half that. It’s a way more affordable number for a lot of people.”

The New Manufactured Home Community Developers Parker Mynchenberg and Ronnie Bledsoe have prevailed in their efforts to bring about Plantation Oaks of Ormond Beach.

“We’re selling the lifestyle, the amenities, the gated entry,” Mynchenberg said of the 55+ community.

Plantation Oaks is near the intersection of I-95 and U.S. 1, north of the municipality. It is on unincorporated land that will be annexed when phase one is complete.

Phase one of the development calls for 427 lots. The final project will include 1,577 home sites.

“We were just held up for a bit and got back at it,” Bledsoe said. “We’re in a great location to do this. Ormond Beach is among the nicer communities in the area. It’s a great place to live.”

Two- and 3-bedroom homes in the new manufactured home community will range from 1,200 to 2,400 square feet. Prices are between $120,000 and

Photo Courtesy of Plantation Oaks of Ormond Beach

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$200,000. The community will operate as a dealer for homes from two makers, Homes of Merit and Palm Harbor. Homeowners can rent the land their home sits on for about $700 per month.

returns, but all that being said, somehow we have to figure this out.

“There needs to be a mechanism whereby new communities can be built,” he said.

The future gated entry for Plantation Oaks

Photo Courtesy of Plantation Oaks of Ormond Beach

They sold that community and purchased the Ormond Beach property, waited out the recession and in 2012 worked on re-zoning for manufactured housing.

Plantation Oaks of Ormond Beach will boast dog runs and dog parks. Additionally, it will provide tennis and pickleball courts, shuffleboard, walking and bike trails, boat and RV storage, nearby shopping and entertainment.

The median home price near the coast is significantly higher than the cost at Plantation Oaks. However, Bledsoe and Mynchenberg have declined to advertise the community as affordable housing.

“I think if you asked the customer about the high point, it’s not affordabil-

“We’re selling the lifestyle, the amenities, the gated entry.

We’re doing a 10,360 square-foot clubhouse with café and large kitchen, as well as community rooms to play cards, exercise and meet friends,” – Parker Mynchenberg, Developer “The rents will vary a little,” Bledsoe said. “Depending on whether you have a waterfront lot, a premium lot or a lot that borders a preservation area.”

Each home will have a front porch, and a two-stall garage rather than carports.

The Obstacles Mynchenberg affirmed the reasons why the development of a manufactured home community takes some endurance.

“Zoning is difficult,” he said. “The second reason why this type of development is rare is because of the infrastructure cost up front. When people move in, you get paid back over time with the lot rent... it’s hard to find funding.

“Once they’re leased up, they’re sought after by investors,” Bledose said. “Not so much when they’re being developed.”

Commissioner Selby said bridging that gap should be a priority locally, and nationally.

“It’s a total mystery to me how a product class can be so attractive, yet there are no people chasing new deals,” Selby said.

“I know it relates to financing and delayed

Selby points to the wave of Baby Boomers who will retire to Florida and other warm weather places. If there are homes for those arrivals to live in, Florida’s economy can reap the benefits.

“Boomers add a lot and require very little,” Selby said. “We should prepare ourselves before they advance to an age where more community services will be required.”

Community perks “We’re doing a 10,360 square-foot clubhouse with café and large kitchen, as well as community rooms to play cards, exercise and meet friends,” Mynchenberg said. “Out back are covered and screened porches that overlook an Olympic size zero entry pool. It’s ADA accessible, and very good for seniors.”

Mynchenberg is a civil engineer, landscape architect and pool designer.

Bledsoe has significant experience as an underground utilities contractor. The two have teamed in development efforts several times, including on Plantation Oaks of Flagler between 1998 and 2004.

50 | MHINSIDER™ • MARCH 2018 TUNICA SHOW GUIDE • MHINSIDER.COM

Photo Courtesy of Plantation Oaks of Ormond Beach

ity, it’s lifestyle,” Bledsoe said. “We’re proud of this community. We’ve had a huge response. When we put up the billboard alone, I can’t say how many emails we received.”

The first model homes were placed during the fall, model homes will be open for a walk-through in the spring and all infrastructure and amenities will be complete by the time residents begin to move in by mid 2018, Sales Director Doug Kamm said.

An interim sales office has been set up at 1439 N Hwy U.S. 1 suite A-6, Ormond Beach, Fla., 32174 with with appointments available 9 a.m. to 5 p.m. Monday through Saturday. MHV

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