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Sun Communities (SUI) As Viewed by Hedge Funds Data, Per Media Reports

June 25th, 2019 Comments off

 

SunCommunitiesLogoSUIlogoViewedByHedgeFundsPerMediaReportsManufacturedHomeCommunitiesIndustryMHProNews

Nina Todic, writing for investor-focused Insider Monkey and Yahoo Finance news, reported as follows about manufactured home commercial real estate giant, Sun Communities (SUI).

 

 

Sun is one of the publicly traded firms tracked in our evening manufactured housing connected stock report.  Last night’s closing ticker and related numbers are available at this link here.

We’ll note that this isn’t a fact-check. Nor is this an endorsement of Insider Monkey, rather, this is a report on June 18, 2019 that summarizes their findings on Sun Communities as it relates to hedge fund interest.

Let’s further note as a disclosure the mantra of Sam Zell, of Sun’s rival Equity LifeStyle Communities, famously quipped that “When others are going left, look right.” Zell told MHProNews that they have never lost confidence in the manufactured home community sector.

Those notes made, let’s dive into their data and views.

 

InsiderMonkeyTopHedgeFundsInvestorGraphicDollarAmountsCorporateNamesDailyBusinessNewsMHProNews 

Here’s What Hedge Funds Think About Sun Communities Inc (SUI)

Hedge fund managers like David Einhorn, Bill Ackman, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Sun Communities Inc (NYSE:SUI).

Sun Communities Inc (NYSE:SUI) was in 18 hedge funds’ portfolios at the end of March. SUI has seen a decrease in support from the world’s most elite money managers of late. There were 22 hedge funds in our database with SUI holdings at the end of the previous quarter. Our calculations also showed that sui isn’t among the 30 most popular stocks among hedge funds.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

We’re going to review the new hedge fund action surrounding Sun Communities Inc (NYSE:SUI).

What have hedge funds been doing with Sun Communities Inc (NYSE:SUI)?

At Q1’s end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -18% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SUI over the last 15 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

 

SUNCommunities-SUI-TopHedgeFundPositionsTrackInsiderMonkeyDailyBusinessNewsMHProNews

 

More specifically, Renaissance Technologies was the largest shareholder of Sun Communities Inc (NYSE:SUI), with a stake worth $152.7 million reported as of the end of March. Trailing Renaissance Technologies was Citadel Investment Group, which amassed a stake valued at $79.6 million. Waratah Capital Advisors, Millennium Management, and Echo Street Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.

Seeing as Sun Communities Inc (NYSE:SUI) has experienced falling interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few funds that slashed their full holdings heading into Q3. Intriguingly, Stuart J. Zimmer’s Zimmer Partners said goodbye to the largest stake of all the hedgies tracked by Insider Monkey, comprising an estimated $54.1 million in stock. Richard Driehaus’s fund, Driehaus Capital, also dumped its stock, about $2.3 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 4 funds heading into Q3.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Sun Communities Inc (NYSE:SUI) but similarly valued. We will take a look at Agnico Eagle Mines Limited (NYSE:AEM), National Oilwell Varco, Inc. (NYSE:NOV), Ralph Lauren Corporation (NYSE:RL), and Trimble Inc. (NASDAQ:TRMB). This group of stocks’ market caps are closest to SUI’s market cap.

 

InsiderMonkeyTopHedgeFundsPositionsRelativetoSUIsunCommunitiesDailyBusinessNewsMHProNews

 

As you can see these stocks had an average of 22.5 hedge funds with bullish positions and the average amount invested in these stocks was $751 million. That figure was $413 million in SUI’s case. Ralph Lauren Corporation (NYSE:RL) is the most popular stock in this table. On the other hand Trimble Inc. (NASDAQ:TRMB) is the least popular one with only 14 bullish hedge fund positions. Sun Communities Inc (NYSE:SUI) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. A small number of hedge funds were also right about betting on SUI as the stock returned 4.2% during the same time frame and outperformed the market by an even larger margin.

Disclosure: None. This article was originally published on Insider Monkey at this link here.

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SunCommunitiesIncSUIRentalofManufacturedHomeVsOtherRentalComparisionsFeb2019IRDec312018DataManufacturedHomeCommunityDailyBusinessNewsMHProNews

 

For balance, and to exemplify why Zell and other savvy investors have not lost confidence in manufactured housing (MH) and MH Communities, consider the graphics above and below from Sun Communities. 

SunCommunitiesIncSUIManufacturedHomeSalesPriceComparisionConventionalHousingCostFeb2019IRDec312018DataManufacturedHomeCommunityDailyBusinessNewsMHProNews

 

Our more robust MHProNews April 2019 data-and graphically rich dive into Sun is found at this linked text-image box below, which is the source for the sample Sun Community graphics on this page.

 

Sun Communities Under the Hood – Data Reveals – Manufactured Homes, Communities, Comparisons with Conventional, Multifamily Housing

 

During an affordable housing crisis, there are reasons to pay attention to the most proven of all kinds of affordable homes. 

 

CostToMoveManufacturedHomeRararityMovingManufacturedHomeSunCommunities2-2019ManufacturedHomeDailyBusinessNewsMHProNews

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That most proven permeant affordable housing resource would be HUD Code manufactured homes.

 

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Manufactured housing is the most proven form of affordable housing. It offers consumer safeguards that far more expensive conventional housing does not offer.

 

That’s this morning’s second installment of manufactured home “Industry News, Tips, and Views Pros Can Use,” © where “We Provide, You Decide.” ©. ## (News, fact-checks, analysis, and commentary.)

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Views From Trenches of Manufactured Housing – Factories, Retailers, MHCs, Others Sound Off

 

Nicole Friedman, Ben Eisen, Wall Street Journal – Fannie, Freddie, Manufactured Homes, and MH Financing – Part 1

TimeToInvestigateFannieFreddieMishandlingofDutyToServeDTSMHARRissuesPerspectiveManufacturredHousingAssocRegulatoryReformLogo

https://manufacturedhousingassociationregulatoryreform.org/time-to-investigate-fannie-and-freddies-mishandling-of-dts/

HUD Secretary Ben Carson, Affordable Housing, Obscuring the Truth, Innovations in Housing, and Manufactured Homes

 

 

 

 

 

Forbes Focus on Manufactured Home Communities, Spotlights Sam Zell’s Equity LifeStyle Properties (ELS), MHC Investing

December 31st, 2018 Comments off

 

ForbesBradJohnsonEvergreenManufacturedHomeCommunitiesSamZellEquityLifestyleELSMHCInvestingFMHAMHProNews600

The writer of the Forbes column cited and linked below is a manufactured home community owner named Brad Johnson.  Johnson, not unlike RV Horizon’s Frank Rolfe, misuses the terminology, perhaps for SEO or other reasons.

 

Johnson in Forbes cites Sam Zell’s Equity LifeStyle Properties or ELS.  It’s Zell who made it a repeated public point to poo-pooh the ‘t-word.’

 

PencilHeadItsNotATrailerParkSamZellPhotoEquityLifstylePropertiesLogoELSLogoMHProNews

Collage by MHProNews. ELS photo and community photos are provided under fair use guidelines. Photo of Sam Zell, by MHProNews.

 

By contrast, former modest community owner and blogger George F. Allen, in his trade-mark inconsistencies, wags a finger at those who don’t say “land lease communities,” yet recently added the term “mobile home” to his blog’s header. Don’t try to figure retired Marine G.F. Allen (GFA) out. He’s arguably only consistent when it comes to what he thinks are his own interests, say former clients of his. The rest, per sources and experience with GFA, are details and commentary.

 

2018-12-30_1317GeorgeAllenBlogHeaderManufacturedHousingIndustryDailyBusinessNewsMHProNews

 

But the point is that there’s plenty of variables in the manufactured home community world on the use of correct or incorrect terminology. Some insist on it, others could care less, and some are blatant hypocrites.

Before pressing ahead, the reason we at MHProNews and MHLivingNews believe proper terminology matters is ironically alluded to indirectly by the Forbes writer, Johnson.

Mobile home parks’ are arguably better appreciated today than in some years gone by, for reasons cited in Johnson’s generally useful column.  But despite consistent returns, and their ability to weather recessions, etc. what’s more properly known as a manufactured home community (MHC) are nevertheless not seen as ‘sexy’ investments.

‘Trailer parks’ are understandably even less appealing to the general public.

The answer isn’t to go with the flow on terminology or industry challenges. Dead fish go with the flow.  But to effect lasting image change belongs to those who make it happen in their own local market(s). Anecdotal evidence suggests that residents’ value – and that of the industry – is being denigrated by the ‘t’ word, and is diluted by saying “mobile home,” if in fact someone is describing a HUD Code manufactured home.

 

TrailerHouseMobileHomeManufacturedHomeFactoryBuiltHousingEvolution101MHProNews-MHLivingNews

You must meet people where they are. Terminology must be taught and caught. Make a habit of using the correct terminology.

Unless the units were built before June 15, 1976 – then ‘mobile home’ is simply not the correct terminology, period.  Steve Duke, JD, in his pithy quote for MHLivingNews below underscored that point.

 

TerminologyMattersBecausetheTerminologyDescribestheConstructionStandardsHomeBuiltToSteveDukeLMHAaMHLivingNewsMHProNewsBiggerPocketsSunshineHomesRedBayAL

The terminology matters because
the terminology determines the
construction standards a home was
built to,” Steve Duke, LMHA.

 

That said, one of the fascinating points obliquely made by Johnson is an oblique slam at the Manufactured Housing Institute (MHI) and their National Communities Council (NCC) for a ‘lack of sound data.’

ELS is used by Johnson as a publicly available standard for good metrics. Quoting:

“…Sam Zell’s Equity LifeStyle (ELS), the largest company in the mobile home park space (and our best proxy for industry data, which is nonexistent).”

MHProNews has for years similarly cited Sun, ELS, and/or UMH Properties for their published data.

Why?

Because accurate information is otherwise largely lacking. Shame on the industry’s post-production association – MHI – for not curing those data deficits. Instead, MHI has arguably have made it worse to the degree that they weaponize favored firms claims vs less favored ones, even if the favored firms information is incorrect. Case in point.  Each of the three current/former MHI/NCC member firms noted in the related report found in the linked-textbox below have different data points on manufactured home communities. MHI took the lowest total, from MHVillage – though sources at MHVillage have privately admitted that their MH Community count is too low.

 

Frank Rolfe, Dave Reynolds, George Allen, Manufactured Home Community Controversy Continues

 

One of several problems not mentioned by Johnson in the Forbes column further below is that the MH Communities sector is actually shrinking.

That may drive up demand short-to-mid term, as Johnson notes. Contrary to what Johnson suggested, there are some new communities being added, as the graphic below indicates.  Some manufactured home communities are also expanding the number of existing sites, on adjacent previously-vacant land.

DataCompMHVillageNewManufacturedHomeCommunityOpeningsNotMobileHomeParksManufacturedHomeIndustryResearchDataReportsMHProNews

But despite a modest number of new opening MHCs, the overall trend for the number of communities in manufactured housing is down, due to community closures.

An analyst or investor can slide-rule that vexing trend in various ways.

But who do you know in the Investment World that argues that multifamily housing apartments are struggling because so many are being built every year? Think about that.

Manufactured housing in general – or even the demonstrably more stable manufactured home communities – are arguably underperforming. That means that a savvy investor enjoys good potential upside. Among the headwinds? Regulatory and stigma. The later is again why proper terminology should be consistently used.  Capital has returned to the U.S. and to this sector of the industry, as MHProNews has reported, and both of those are a plus.

Let’s see how the Florida Manufactured Housing Association (FMHA) framed their battle against stigma for the public in a video supplied by their “Hand Built Homes” campaign, as shared 11 months ago to MHLivingNews.

 

 

With that introduction and analysis, let’s look at what Johnson wrote in Forbes, found at this link here, or from the in depth quotes below his headline and featured image.

 

2018-12-30_1335ForbesShouldYouInvestInMobileHomeParksOnlyifYouWantConsistentReturnsDailyBusinessNewsMHProNews600

Mobile home park investing is not an exciting cryptocurrency, a high-flying tech startup or a trophy office tower you brag about owning. A mobile home park is just a parking lot filled with single- or double-wides that kicks off a lot of cash flow.

I co-own a portfolio of 23 mobile home parks and help real estate investors grow their portfolios with mobile home park investments. There are a lot of unique aspects to the industry that make mobile home parks compelling investments. But, for some strange reason people do not gather around me at parties to learn about the intricacies of them. So, to keep your attention, let’s focus on just one strength most parks share: consistency.

A portfolio of mobile home parks purchased at the right price is a remarkably bankable investment. Mobile home parks deliver profits year in and year out, whereas their cousins (apartment buildings) are often far more erratic. Why?

Compared to apartment buildings, mobile home parks tend to:

  • Have dramatically lower turnover: Only about 2% of the homes leave our parks per year, versus the average apartment tenant yearly turnover, which was 53% in 2015.
  • Have lower operating and capital expenses due to fewer maintenance costs and amenities: We rent land, which is pretty cheap to maintain.
  • Have less volatile rents due to reduced competition. There is essentially no new supplyof mobile home parks. Strict zoning laws make them nearly impossible to build. Compare that to apartments buildings, of which more than 350,000 new unitswere built last year. That’s a never-ending supply of new competition for existing apartments. That sounds horrible. Who wants to go out in the cold and slay a new dragon every year? I’d rather be back at the castle by the fireplace counting land rent.

All these differences translate to consistent profits. Consider the profit track record of Sam Zell’s Equity LifeStyle (ELS), the largest company in the mobile home park space (and our best proxy for industry data, which is nonexistent). ELS has achieved positive profit growth in every quarter since 1998. That’s impressive: America suffered a huge housing crisis in 2007, but ELS grew profits anyway. This isn’t a fluke or something unique to ELS. This consistency is structural to the industry.

Comparison To Other Commercial Property Types

To fully understand the lower capital advantage mobile home parks have over other non-multifamily real estate assets, here are the remaining major commercial asset types and their roadblocks to consistent cash flow performance.

  • Office properties:Occupancy is highly susceptible to recessions and requires huge ongoing capital expenditures relating to building systems and staffing. Office landlords must spend hundreds of thousands and often millions on new tenant improvements and broker leasing commissions. These costs are paid upfront. If the tenant goes bankrupt on day one of the lease, the landlord cries.
  • Retail properties:These are highly susceptible to recessions, and many are currently being methodically crushed by online retailers.
  • Hotel properties:These come with high fixed expenses — and you can’t fire the staff if occupancy is low one night.
  • Industrial properties:Though industrial properties tend to have the lowest ongoing capital needs next to mobile home parks, tenant concentration can be an issue. If your largest tenant defaults, you’re in trouble.

In contrast, mobile home parks are virtually recession-resistant, with low fixed costs and minimal capital needs. They have lower turnover rates, don’t require much staffing and have highly diversified tenant bases. In other words, they are consistent.

How To Make Your First Mobile Home Park Investment

If you’re a passive investor interested in co-owning parks, there are quality sponsors out there that you can invest with. If you would rather roll up your sleeves and do the work yourself, here are a few suggestions:

  • Don’t start small:Counterintuitively, you don’t want to crawl before you walk in mobile home park investing. Buy a park large enough (~50 spaces) to provide tenant diversity and support an on-site (or nearby) property manager. If you go small, you’ll become the de facto property manager and will need to personally collect rents and enforce the rules.
  • Narrow your search:You’re going to have a hard time competing against larger, more established players on brokered deals. Don’t plan on finding a great deal online. It took me years and a lot of cold calling to develop consistent deal flow. If it’s your first deal, your best strategy is to focus on a couple of markets and deal directly with the owners.
  • Stay away from private utilities: If at all possible, stay far, far away from private utilities. The costs to replace private electrical, gas, water or sewer systems are often six figures and sometimes seven figures depending on the size and type of system. Do you want 100 families calling you in the middle of the night to report a gas leak? Unless you’re very lonely or very bored, probably not.
  • Secure long-term debt:When mobile home parks fail, it’s often because a short-term loan came due and the owner couldn’t refinance.
  • Make sure you have time to oversee the asset: Mobile home parks do not run themselves. You need the right team, software and systems to manage them for you. Or you need to do it all yourself. If you’re looking for mailbox money, look elsewhere.

Conclusion

Consistency can be boring, but it’s critical for long-term investment success. You can’t increase cash flow if you have to keep reinvesting in the property just to keep things afloat. If you can’t grow profits, you’ll be far too dependent on market timing and interest rates to achieve compelling returns.

The mobile home park industry has been reliably profitable due to its structural advantages that keeps mobile home park supply, tenant turnover, ongoing capital and recurring expenses low. This enables investors to compound capital as revenue growth flows to the bottom line and is not diluted by surprise capital expenses. ##

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The above was not part of Johnson’s column.  In fairness to the NCC, they have produced this listing of the top 50 MHC operations, which has some value. But more detailed data on communities is inconsistent and contradictory, as Johnson writing in Forbes, and the graphics below from MHI members, all reflect.  MHI’s data is arguably an embarrassment to the industry, Johnson is not alone in slamming it,  and it clearly needs to be corrected. We alone in MH trade publishing have called MHI to account for this #nettlesome problem. 

TopManufacturedHomeCommunitiesSkylineChampionIRDailyBusinessNewsMHProNews

This graphic from Sun Communities (SUI) uses what appears to be MHVillage/DataComp figures. Insiders there have told MHProNews that they know their count is off (under) by thousands, yet this is the count that MHI has used more recently. One of several problems with a false community count is this –> if the total number of guesstimated sites are anywhere near accurate, then more communities means fewer average sites per community. See the below, all from MHI or MHI members, and the numbers are all over on the community count.

ManufacturedHousingIndustry50000CommunitiesCavcoManufacturedHousingInstituteMHIDailyBusinessNewsManufacturedHousingIndustryFactCheckMHProNews

This claim by CAVCO is arguably dated and in error. Frank Rolfe with RV Horizons argues for 44,000, based upon what he said was a ‘hand count’ done over a two year period of time. Rolfe admits that it may be as high as 45,000, but those would be tiny communities of say 2 or 3 spaces, he said to MHProNews.

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For our original report, using MHI’s graphic, and citing Rolfe’s, Allen’s and MHI’s data in the text by the arrow. http://www.MHProNews.com/blogs/daily-business-news/manufactured-housing-institute-outgoing-chair-tim-williams-remarks-vs-mhi-ceo-richard-dick-jennison-comments-fact-checks/

 

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All image credits are as shown, and images or third party documents that may be attached are provided under fair use guidelines. 

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Graphic, data, per Sun Communities (SUI).

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Graphic, data, per Sun Communities (SUI).

 

Grab your coffee or energy drink. This is your latest wake up call.

Opportunities knock, but they come dressed in overalls.

Johnson made several valid points in Forbes, but some needed adjusting or were exaggerated, etc. as noted above.  Johnson who is clearly pro-industry, nevertheless had issues in his report.  This article in Forbes is but one of many possible examples of why a report in the mainstream should not be merely forwarded, without a sound commentary and analysis. Otherwise, misinformation mixed with accurate information only spreads.

 

PublishingHandPickedInformationCanBeWorsefortheImpressionItMakesOnManufacturedHomesandOurIndustryThanStatingEntirelyFalseInfo-BradLovinNCMHA

There are internal industry challenges that must be overcome. To better understand the issues, see the related report, below the notices and byline that follow, for more insights and details. “We Provide, You Decide.” © ## (News , analysis, and commentary.)

 

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Eye Opening – Manufactured Homes in National, Global Context

Earning More Honest, Honorable Manufactured Home Industry Profits in 2019

 

MHARR Exclusive Report & Analysis, June 25, 2018

 

 

 

 

 

 

 

Enemies of Manufactured Homes, Communities; Rent Control, MHAction, George Soros, Ignorance, & Entropy

September 22nd, 2018 Comments off

 

EnemiesManufacturedHomesCommunitiesRentControlMHActionLogoGeorgeSorosIgnoranceEntropyMobileManufacturedHousingMHProNews

The headline isn’t an all-encompassing list of those bulleted items, individuals, or groups that act as opposition or de facto “enemies” which artificially stifle the advancement of manufactured homes, homeowners, and professionals. But they do capture the flavor of important realities confronting the most proven affordable permeant homes built in the U.S. today. Specifically, HUD Code manufactured homes.

 

Linked reports that document various points herein can be read later for greater depth of understanding on that aspect of this subject.

 

Fresh Facts, Figures, Future of Affordable Housing -Comparisons- Conventional Site-Built v Mobile/Manufactured Home Industry Data

 

The Urban Institute, Bloomberg, and the National Association of Realtors have all had stories and reports this year that on the surface are positive and useful in various ways for advancing the truth about manufactured housing.

 

Bloomberg “New Home for $90,000? Manufactured Housing Is Making a Comeback” Reveals MH Media Challenge

 

The Urban Institute phrasing of their data and reports particularly merits scrutiny, which their January 2018 study is covered in the related report and the links from it, which are found in the analysis linked below.

 

Urban Institute Ask for Correction in Analysis of their Manufactured Housing Research, “Follow the Facts,” “Follow the Money”

What may appear at first blush to be good news for the industry begs the question that the Urban Institute asked in January 2018. Given the affordable housing crisis, and the fact that manufactured homes are well positioned to address the need, why are so few HUD Code manufactured housing units being built?

 

Why is manufactured housing under-performing from its historic norms, as this chart from Skyline-Champion reflects?

 

ManufacturedHomeMHShipments1990-2017DailybusinessNewsManufacturedHousingMHProNews

 

Lawrence Yun, Chief Economist for the National Association of Realtors ® (NAR), says that only by homebuilders getting busy can solve the need for an estimated 8.3 million housing unit shortfall.  Tech gurus say that only factory-based homebuilding will close that gap.  So why aren’t the sales of HUD Code manufactured homes (MH) soaring?

 

LawrenceYunNARShort8.3MillionHousingUnitsRisingRentsHousingPricesCuredOnlyByMoreBuilding

Collage by MHProNews.

 

Why are RVs – which trailed MH shipments 20 years ago – now outselling MH by some 5 to 1?

 

WinnebagoRVWholesaleshipmentDataManufacturedHousingIndustryDailyBusinessNewsMHProNews

 

Among the headwinds are individuals, and organizations that by accident or design are behaving in ways contrary to the interests of home owners, home seekers, and most manufactured housing professionals.  That is most notably true for MHVille “independents.” As an example,  tent control is an issue that’s widely misunderstood, and thus merits careful examination to reveal how it harms home owners, affordable housing seekers, and many businesses too.

 

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2018-09-22_0809MHAction2018MHActionNMHOARentControlProtestsManufacturedHousingIndustryDailyBusinessNewsMHProNews

 

Above and below are some recent headlines, in screen captures from Google and alternative search engine, DuckDuckGo.

 

DuckDuckGoSearchResultsMHActionRentControlMobileManufacturedHomesDailyBusinessNewsMHProNEws

 

These are examples of what Marty Lavin, JD, a Manufactured Housing Institute (MHI) award winning professional, has called “the [manufactured housing] industry’s other image campaign.”

There are routinely far more negative stories that fill the news and ether than positive ones.  As MHProNews has uniquely documented for some years, there are positive reports about modern manufactured housing that date back for over 2 decades.

 

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Hungary’s [Prime Minister] Viktor Orbán has turned on George Soros.” = The Guardian. “Israel defends Hungary’s ‘antisemitic’ portrayal of George Soros…” = The Independent. Soros has backed groups like MoveOn, ACORN, and New York Communities for Change, which in turn has aligned with MHAction.

20 years ago, manufactured housing sales were soaring.  Today, they are snoring. While it is true that lending was “loose” 20 years ago, that alone doesn’t explain the disparity. Because loan quality doesn’t change the reality that there were demonstrably more customers actively seeking manufactured homes.

Demand is a function of news, marketing, education and desire.  This has been proven with client work by MHProNews’ related consulting/business development services operations.  In varied local markets, we’ve demonstrated that sales can soar, given proper adjustments in training, media engagement, and other proprietary methods. When sales can profitably grow by hundreds of percent year-over-year or in a 24 month time-frame, those cases are clear indicators that it can be done by others too.

 

DuckDuckGoEntropyDefinedLossInformationTransmittedMessageManufacturedHousingIndustryMHProNews

 

Logic and geniuses like Albert Einstein alike tell those willing to listen that doing more of the same, will only create a similar result.

It takes effort to change, or as John Bostick – President of Sunshine Homes – keenly observed, “Easy doesn’t pay well.” Change requires effort, and effort – energy is the antidote to entropy, the status quo, and more of the same.

People like George Soros could, in theory, be ‘won over.’ But Soros – and billionaires like Tom Steyer, Bill Gates, Jeff Bezos, and Warren Buffett – are demonstrably politically-aligned fellow travelers. They each supported in various ways former President Barack Obama and Secretary Hillary Clinton backed agendas. They’ve all grown vastly in wealth, while supporting candidates and causes that appear to be contrary to their interests. But when examined closely, big government has helped – not harmed – the wealth of billionaires.

The agendas of those named above – which are out in the open for all to see – have been demonstrably harmful economically to the interests of the vast majority of Americans, including manufactured home owners, and professionals. See related reports, linked below. “We Provide, You Decide.” © ## (News, analysis, and commentary.)

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Tony is the multiple award-winning managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.

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MH Communities, Owners, MH Independents Alert – NMHOA and MHAction Next Steps? – Part 1

 

Improving Resale Values: Manufactured Home Owners, Professionals, Shoppers – NMHOA & MHAction, What’s Right, Wrong, Supply & Demand – How to Achieve Mutual Victories

 

“Disastrous,” “Uncompetitive” “Takeover” of “Government Sanctioned Monopoly” Blasted in Congress as Bi-Partisan Fix Unveiled

Facebook, Marketing & News – Manufactured Housing Pros, Sarah Miller, ‘Citizens Against Monopoly’ Sound the Alarm

Wall Street Journal – Tech Giants are Monopolistic Threat to Businesses, U.S. Economy

Affordable Housing Revolt! Amazon’s Jeff Bezos Video Responds to “Breakup” Growing Monopoly, and Manufactured Housing

 

Progressive “Nation” Reports on Monopolies Cites Buffett, Clayton, Others – MH Industry Impact?

Globe St ‘Discovers’ Manufactured Homes – “Competition Heats Up in the Mobile Home Market”

August 28th, 2018 Comments off

 

KelsiMareeBorlandGlobeStManufacturedHousingINdustryDailyBusinessNewsMHproNEws600

There are statements made or reported by the mainstream or specialty media, such as the one that follows, that routinely includes a mix of interesting, wrong, and problematic elements.

 

Writing for Globe Street, a commercial real estate investor focused publication, Kelsi Maree Borland says some things that would bring a mixture of agreement plus hard-to-swallow reaction by thousands of manufactured home industry professionals. Ditto that type of potential feedback from long-time investors in the manufactured home communities sector.

For example, Borland writes, “Once considered a high-risk investment, investors are seeing more and more stability and NOI growth in mobile homes.”  Anyone who’s been in manufactured home communities for several decades know how stable that sector has been.

For example, Equity LifeStyle Properties (ELS) was formed in December 1992, and has steadily grown.  Even during the so-called Great Recession, manufactured home communities – what Borland calls “mobile home parks1,” consistently performed better than most any other real estate sector.

Borland cites Hunter Thompson from Cash Flow Connections as his source for the article published August 27, 2018.

HunterThompsonLinkedInDailyBusinessNewsMHproNews600The investor owns the land lot and tenants own their home,” said Borland, who then quotes Thompson. “This has many benefits including the stability of the tenant base and pride of ownership in the assets. Furthermore, the homes are very costly to move, usually $5,000, and are typically only worth $5,000-$20,000. The mathematics results in the tenants staying for much longer than other asset classes,” says Thompson.”

While there are older communities that such a description might fit, there are thousands of industry professionals who would nuance or reject that kind of description as applying to their community(ies).

While Thompson says that demand for mobile home parks is directly correlated with the economy and grows as demand for affordable housing grows, limited development of new parks has also greatly helped to fuel the stability of these assets,” writes Borland.

The Globe Street writer then quotes Thompson again, “Municipalities and government agencies all over the US have banned the development of MHPs, creating a significant supply/demand disequilibrium which investors can take advantage of,” he says.

There’s a mix of useful and problematic statements made in his GlobeSt report. This is nothing new for MHVille, which certainly needs all the positive or accurate reporting it can get.  Certainly, “competition is heating up,” and that perhaps is the most accurate part of the story, from the vantage point of MHVille.

This is yet another example of why the industry needs positive engagement of the media, as Frank Rolfe has said on stage, and in writing.

 

With a more level playing field in:

  • Locations,
  • enhanced preemption,
  • lending,
  • coupled with the correct type of education and promotion could lead the industry to new glory days.

See the related reports, linked below. “That’s news through the lens of manufactured homes, and factory-built housing.” © ## (News, analysis, and commentary.)

Footnote 1: in most cases, the proper term for a land-lease community like the ones being discussed would be manufactured home community, not mobile home park.  A possible caveat would be if the homes and property are filled with true pre-HUD Code mobile homes.

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SoheylaKovachDailyBusinessNewsMHProNewsMHLivingNewsSubmitted by Soheyla Kovach to the Daily Business News for MHProNews.com. Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.

Related Reports:

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Introducing the Verge and Curbed’s “Home of the Future” – Video

 

Manufactured Housing National Research Report, Marcus & Millichap Manufactured Home Industry Performance Data

May 2nd, 2018 Comments off

MarcusMillichapManufacturedHousingNationalResearchReport

Potential for Higher Returns Lures New Buyers, Generating Competition; Supply of For-Sale Listings Remains Tight, Boosting Prices,”
Marcus & Millichap (M&M) National Report, First Half of 2018

 

A new research report has been provided by brokerage firm Marcus & Millichap to the Daily Business News.

For those in MHVille who don’t know Marcus & Millichap Inc (MMI), the following description is from their website.

NationalManufacturedHousingRegionsSubregionsMapMMIManufacrturedHomeCommunityIndustryDailyBusinessNewsMHProNews

Powered by Culture: George M. Marcus and William A. Millichap revolutionized the real estate brokerage industry. Marcus & Millichap was designed to go far beyond simply facilitating real estate transactions. It was developed as an entire system dedicated to maximizing value for real estate investors.”

As part of our ongoing periodic series on the true state of the manufactured housing industry, the following summary provided to MHProNews by MMI.  How good are they?  Here’s what a market snapshot tells you investors think of MMI.  Money talks.

MarcusMillichap(MMI)GoogleTickerManufacturedHousingIndustryDailyBusinessNewsMHProNews600

 

Investment Highlights

Buyers are flush with capital amid a scarce supply of available listings throughout most areas of the nation, which has resulted in more off-market transactions. Heightened demand is producing aggressive pricing that keeps cap rates steady despite the rise in interest rates.

In some areas of the country, for-sale listings are further reduced by resident groups in manufactured home communities exercising their right of first refusal and making offers to purchase the park.

PopulationShift65PlusMMIManufacturedHousingINdustryDailyBusinessNewsMHProNews

Exchange buyers remain active. Many of these investors are trading out of other commercial real estate product types, such as apartments, and are unfamiliar with owning a manufactured home community. In many instances the potential for higher returns is luring them to consider park ownership and they are willing to pay a premium to own, helping to drive prices higher.

Communities on well and septic are still slower to trade. Some buyers are searching for a value-add opportunity in parks that have the potential to be hooked up to these city services.”

MarcusMillichapListingsClosedPropertiesManufactuedHomeCommunitiesMHousingIndustryDailyBusinessNewsMHProNews

The MMI research and data reflects the growing demand for manufactured home communities that industry professionals have been reporting for several years, as was noted in last night’s snapshot report on RHP Properties.

Manufactured Home Communities Giant RHP Propertie$ Deal, plus Manufactured Housing Industry Connected Stocks, Market, Data Updates

 

East Region Mid-Atlantic Trends Vacancy:

Strong demand for affordable housing produced a 70-basis-point reduction in vacancy to an average of 6.6 percent during 2017. Vacancy was especially tight in Baltimore at 2.5 percent. Rents: The average rent rose 3.8 percent in 2017 to $381 per month, bolstered by a 5.1 percent surge in Baltimore. Rents have climbed 14 percent over the last five years.”

ManufacturedHomeCommunityPriceAppreciationTrendsMMIManufacuredHomeIndustryProfessionalDailyBusinessNewsMHproNews

The above gives you the flavor of the document, which is a free download.

MetroPerformanceMMIManufacturedHousingIndustryDaiilyBusinessNewsMHProNews

You can sign up for their full national report at this link, here.

 

The Takeaways? 

The facts speak for themselves.  But there are many takeaways, including that manufactured home communities – and the industry at large – could be doing significantly better than they already are.

But we’ll drill that down in an upcoming summary report on manufactured home communities, that should be ready by next week. Investors, industry professionals and advocates, stay tuned.  Newcomer?  Sign up for our industry leading emailed update headline news, below. ## (News, analysis and commentary.)

 

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Related Reports:

 

Affordable Housing Focus Group – Comparing Housing Options – Conventional Houses, Condo, Rentals, and Manufactured Homes – Up for Growth, National Association of Realtor, Studies

 

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“No Other Options” – Frank Rolfe’s Pad, MH “Parks” Tug-of-War, Good, Bad or Meh for Manufactured Home Communities, MH Industry?

February 6th, 2018 Comments off

FrankRolfeHomeSainteGenevieveMONatGeoNationalGeographicMobileHomeParksManufacturedHomeCommunitiesDailyBusinessNewsMHProNews1063Frank Rolfe has become a well-known personality in the manufactured home industry.

He’s been called a genius. Others take issue. For example, sometimes, Rolfe says “mobile homes,” and they are indeed a pre-HUD Code home.  But other times, he says that, and he’s talking about a manufactured home.  On terminology alone, he’s controversial.

 

For some, Rolfe is an industry rock star. Others don’t understand, or don’t want to understand, why he is getting so much media, as well as manufactured housing industry, attention.

 

Particularly since that New York Times article hit, there’s been a wide range of industry reactions, as the article and quote below reflects.

 

Sensationalistic ‘Cold Hard Lessons of Mobile Home U’ New York Times article  by Gary Rivlin draws Manufactured Home Industry Ire, Desire and Fire

FrankRolfeMHIHypocrisyQuote-MHProNews

MHProNews and our sister site has covered those Rolfe-related controversies from a variety of perspectives.

Nat Geo says on their YouTube page about their series, “About Explorer: Explorer, the longest-running documentary series in cable television history, honored with nearly 60 Emmys and hundreds of other awards, continues as a series of major specials on the National Geographic Channel…”

Literally millions of Americans have read about or viewed our industry through the prism of Frank Rolfe words; he and his colleagues operations.

Against that backdrop is the first part of a two-part insights into the ongoing saga of Rolfe, and how he has influenced the public perception of manufactured homes and communities.

 

 

This NatGeo “Explorer video above is vintage Rolfe.

It could be used to inspire investors to take a deeper look into the industry.

It can also be used by resident activist groups, as has the video in the article, linked below.

 

All of it begs the question, what’s been the net impact of Rolfe on the manufactured home industry?  Particularly, the land-lease community sector?

FrankRolfe$2000MobileHomesNatGeoYouTubeDailyBusinessNewsMHProNews

Still from NatGeo video, posted above, on this Daily Business News report.

Or, how has he influenced the industry’s discussion about itself?

Frank Rolfe: Pressured into Silence? Manufactured Housing Industry, and Journalism

Some are strong defenders of Rolfe, saying he turns around problematic properties, and improves them.  He’s doing residents and those communities a valuable service.

 

 

Others believe he’s a lightning-rod, one used by resident activist groups such as MH Action, among others.

 

 

Whichever perspective you, or your circle, holds about Rolfe – what’s clear is the Rolfe has been a media magnet. Part of the landscape of the manufactured home industry, particularly the community sector, is shaped by this prominent Manufactured Housing Institute (MHI), National Communities Council (NCC) member.

FrankRolfeCoOwnerMHPFundsMobleHomeParksOwnerInvestorNatGeoYouTubeDailyBusinessNewsMHProNews575x326

Some members love it, others, not so much, when Rolfe says something factually true like this.  For millions of Americans, there is “no other option” for them to own than by living in a “mobile home park” like one he and his colleagues operate. “We Provide, You Decide.” © ## (News, analysis, fact-checks, and commentary.)

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Ross Kinzler on MH Communities, and Marty’s Lavin’s Back to the Cornfields

August 16th, 2017 Comments off
FinanceCommerceLowryGroveMHPDailyBusinessNewsMHProNews

Minnesota’s Lowry Grove MH Community, which is now closed. Photo credit, Finance and Commerce.

It would be interesting to do a comparative history, MH vs. public housing,” said Ross Kinzler, prior executive director of the Wisconsin Housing Alliance (WHA).

Did the public sector do any better serving lower-class housing needs?  Nope,” said Kinzler.

His remark came in part as a reaction to an in-depth look at the community sector by Marty Lavin, JD.

Lavin, an industry veteran, success story, and MHI award-winner, recently wrote BACK TO CORNFIELDS? Part One: The Decline of [MH] Communities.

BackToTheCornfieldsMartyLavinJDManufacturedHousingIndustryMHProNews

Marty Lavin, JD. Collage credit, MHProNews.com.

Did private investors create parks just for the money?  Yes, some did,” said Kinzler to MHProNews.  But, “I’d argue that most community owners treated their residents as family.  I’ve never seen that level of involvement from a government agency.”

WhateverYouSubsidzeYouGetMoreOfIt-HopeHousingProjectBostonMassMHProNewsGraphicsStock555

Manufactured housing advocate, Rev. Donald Tye Jr., has often made a similar point to Ross Kinzler’s. Tye has argued that public housing projects are ‘warehousing people,’ and cost taxpayers billions, while producing none of the advantages of home ownership. Manufactured homes provide a real opportunity for those who may not be able to afford anything else, Tye said. To see the recent HUD ‘Worst Case Housing’ report, click the image above.

What to do about closing communities?  Redoing infrastructure is very expensive…beyond what future rents can amortize…unless those places gentrify.  Then their purpose changes,” Kinzler said.

Regardless of the cause, in most cases avoiding closures requires reduced vacancies and higher rents,” the award-winning Kinzler said.

MHProNews recently reported on the Keith Ellison bill, which proposes steps to protect communities. See that linked here.

Marty Lavin’s column looking at communities, is linked here. ## (News, analysis.)

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