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Are You Customer or Product of Tech Giants? Manufactured Housing Connections and Implications

May 23rd, 2019 Comments off

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There is significant evidence of the monopolization of America.  Perhaps the best-known examples are the tech giants, many of which have come under fire from both sides of the left-right political divides here in the U.S.  The New York Times reported on Mar 20, 2019 “European authorities on Wednesday fined Google 1.5 billion euros,” equal at that time to some $1.7 billion U.S. dollars, for antitrust activity.

 

As CNN pointed out, that was the third in a series of billion-dollar penalties” for Google.

As MHProNews reported, a co-founder of Facebook, along with other former executives, have called for the breakup of Facebook. That report can be accessed below from the hot-linked text-image box.

 

 

Facebook CEO Sheryl Sandberg Discusses Antitrust Breaking Up, What Kevin Clayton, Joe Stegmayer, MHI Can Learn, plus Manufactured Home Market Updates

 

MHProNews has thus far been alone in industry trade media to report that Amazon and Berkshire Hathaway now have roughly a billion dollars in common interests.  Given that Amazon has moved into prefab housing, and Kevin Clayton led Clayton homes is likewise into conventional, prefab, and manufactured housing, it ought to be considered as a rumbling of a potential earthquake in manufactured housing.

 

Amazon-Berkshire Announcement – Emerging Factory-Building Elephant in the Room?

 

The list that follows includes some of the top billionaires in the world.  There have been times that #3 Warren Buffett, Chairman of Berkshire Hathaway, parent company to Clayton Homes and other manufactured housing brands, has reportedly been rivaled briefly by #4, Bernard Arnault, a Frenchman.

 

top10BillionairesinWorldVisualCapitalistManufacturedHousingMHProNews

 

When one grasps the concept of interlocking directorates, and then how nonprofits can be weaponized to expand that reach of these giants even further, the threat to independents in all segments of society – including manufactured home independents – grows.

InterlockingDirectoratesGraphicExampleManufacturedHousingIndustryDailyBusinessNewsMHProNews

It is with this backdrop, that Jeff Desjardins Visual Capitalist (VC) infographic comes into focus.

Here is how VC says the tech titans are earning their billions.

 

HowTechGiantsEarnTheirBillionsVisualCapitalistInfographicDailyBusinessNewsMHProNews

 

How the Tech Giants Make Their Billions

At a glance, it may seem like the world’s biggest technology companies have a lot in common.

But a closer look, says VC, suggests that there are two broad categories between these firms.  You are the customer, and you are the product.  Here is how they put it.

You are the Customer

In the broadest sense, three of the tech giants make money in the same way: you pay them money, and they give you a product or service.

Apple (Revenue in 2018: $265.6 billion)

  • Apple generates a staggering 62.8% of its revenue from the iPhone
  • The iPad and Mac are good for 7.1% and 9.6% of revenues, respectively
  • All other products and services – including Apple TV, Apple Watch, Beats products, Apple Pay, AppleCare, etc. – combine to just 20.6% of revenues

Amazon (Revenue in 2018: $232.9 billion)

  • Amazon gets the most from its online stores (52.8%) as well as third-party seller services (18.4%)
  • Amazon’s fastest-growing segment is offline sales in physical stores
  • Offline sales generate $17.2 billion in current revenue, growing 197% year-over-year
  • Amazon Web Services (AWS) is well-known for being Amazon’s most profitable segment, and it counts for 11.0% of revenue
  • Amazon’s “Other” segment is also rising fast – it mainly includes ad sales

Microsoft (Revenue in 2018: $110.4 billion)

  • Microsoft has the most diversified revenue of any of the tech giants
  • This is part of the reason it currently has the largest market capitalization ($901 billion) of the Big Five
  • Microsoft has eight different segments that generate ~5% or more of revenue
  • The biggest three are “Office products and cloud services” (25.7%), “Server products and cloud services” (23.7%), and Windows (17.7%)

The remaining tech giants charge you nothing as a consumer, so how are they worth so much?

 

You are the Product

Both Alphabet and Facebook also generate billions of dollars of revenue, but they make this money from advertising. Their platforms allow advertisers to target you at scale with incredible precision, which is why they dominate the online ad industry.

Here’s how their revenues break down:

Alphabet (Revenue in 2018: $136.8 billion)

  • Despite having a wider umbrella name, ad revenue (via Google, YouTube, Google Maps, Google Ads, etc.) still drives 85% of revenue for the company
  • Other Google products and services, like Google Play or the Google Pixel phone, help to generate 14.5% of total revenue
  • Other Bets count to 0.4% of revenue – these are Alphabet’s moonshot attempts to find the “next Google” for its shareholders

Facebook (Revenue in 2018: $55.8 billion)

  • Facebook generates almost all revenue (98.5%) from ads
  • Meanwhile, 1.5% comes from payments and other fees
  • Despite Facebook being a free service for users, the company generated more revenue per user than Netflix, which charges for its service
  • In 2018 Q4, for example, Facebook made $35 per user. Netflix made $30.

So while the tech giants may have many similarities, how they generate their billions can vary considerably.  Which is why MHProNews for some years has been spotlighting those professionals who are raising the warning about monopoly in general, often who specific several tech giants.

 

Some are marketing products to you, while others are marketing you as the product.  Odds are excellent that you are engaged using products or services from multiple – if not all – of these giant firms.

The solution? Understand the pattern, and fight back legally and ethically with whit and wisdom.

That’s tonight’s look at “News through the lens of manufactured homes, and factory-built housing” © where “We Provide, You Decide.” © ## (News, analysis, and commentary.)

 

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$100s of Billions Will Pour into U.S. in 2018, How Much of that Capital Will Deploy in Manufactured, PreFab Housing?

January 6th, 2018 Comments off

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Executive Summary

The combination of the new tax law, a growing economic boom, and talk by Apple and other tech giants of bringing back to the U.S. some $200-$400 Billion dollars in 2018 alone will create a search for valuable ways to deploy that capital.

With the affordable housing crisis widely publicized, housing is a trillion-dollar a year sector that is poised for even more growth.

As real estate and investment mogul Sam Zell has observed, when others are looking right, go left. Where is “left” in the housing industry?

A sector that has drawn – arguably for the wrong reasons – resistance and pushback.  Who says?   Harvard, among others.

There are already billionaires – including Zell and Warren Buffett – plus thousands of others deeply involved making plays in manufactured housing.  That said, it’s still very much a ’boutique’ industry compared to others.

Plus, some of the ways the industry is being pursued are controversial, and feed into the negative narrative and perspective.

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Click to read report, and see the Guardian video.

It is precisely because of the mistaken understanding and several arguably problematic practices that can make manufactured housing of interest to those willing to pursue the industry in a best practices, professional, and ethical fashion.

Why Are Billionaires Attracted to Manufactured Homes?

In an industry which for decades has focused on short term thinking, and short term plays, positive and promising reports are often overlooked, and quickly forgotten.

“Po-Dunk” Performer Kid Rock, Eyes Senate Run, Makes Manufactured Home Living Hip

So manufactured housing isn’t a quick buck.

Rather, it should be seen as a long term play, as Buffett’s has been.

Warren Buffett, “the Moat,” Manufactured Housing, Berkshire Hathaway, Clayton Homes, 21st Mortgage, Vanderbilt, Wells Fargo, NAI…

A general overview of housing growth, and expectations of capital pouring into the U.S. are summarized from CNBC reports and a video, below.

That’s followed by quotes, comments, and links that lay out facts – including the just-announced merger of manufactured home producers Champion Home Builders and Skyline Corp (SKY). Their stock surged on the news.

SkylineChampionHomeBuildersMergerPlanAnnounced

Per CNBC

Apple, tech companies to bring back $400 billion in overseas cash to the US: Estimate,” reports CNBC.

In another report form them yesterday, the following.

By all measures, a construction boom is shaping up for 2018

  • The construction industry added 30,000 jobs last month, according to the Labor Department.
  • That brings the sector’s 2017 gains to 210,000 positions, a 35 percent increase over the previous year.
  • Construction spending is also soaring, up to a record $1.257 trillion in November, according to the Commerce Department.
  • Optimism among construction contractors is also at a record high.”

 

Voices within Manufactured Housing, Plus Reports that Point to Potential

As the leading source for manufactured home industry trade news – which also uniquely provides proven and praised professional servicesMHProNews is a useful resource for seeing the reasons why the industry’s potential has not been fully tapped.

(Note: to get our popular emailed headline news updates,
generally twice weekly and read by thousands of industry pros, click here.)

Or as Sunshine Homes President John Bostick – a client company whose experienced serious growth at a pace far higher than the industry at large has said – “Easy doesn’t pay well.”  But intelligent, sustained effort can yield, as it has for them, growth rates that are more than double those of the industry at large, and in the more attractive residential product side.  That’s where the biggest opportunities are in manufactured housing, without ignoring the that there is also growth potential for commonly pursued ‘entry level’ manufactured homes.

JohnBostickPresidentSunshineHomesRedBayAL-OurIndustryProvidesGreenAppealingOptionsWeeksNotMonths-DailyBusinessNews-MHProNews

Investor Take Away

This is one of those ‘look left’ opportunities within the manufactured home industry. While much of the industry pursues ‘entry level,’ or ‘shade and shelter’ product, the results being achieved by Sunshine and others using more upscale product reveals what real estate research also reveals.  This is where arguably the growth opportunities are in manufactured homes today.

This isn’t easy, but smart money is deployed and being attracted in manufactured homes and communities, using this approach.  An example is shown in the video below.

Third Party Reports, Quotes that Point to far Greater Potential

Recent concerns over housing affordability for low-income households appear to be difficult to resolve by developing policy options that focus only on traditional single-family owner-occupied dwellings and/or rental apartments. In terms of developing a housing policy that would improve the quality of housing for lower income families, it seems appropriate to explore the merits of an often-ignored alternative, namely manufactured housing. – Eric Belsky, Harvard.

“Credit is the lifeblood of housing”.Eric Belsky, Harvard.

MultipleReasonsExpectManufacturedHousingDoBetterThanSiteBuiltHousingEricBelskyEecDirJointCenterHousingStudiesHarvardUnivDailyBusinessNewsMHProNews

At the time Belsky made this prediction, manufactured homes were selling over 250,000 new units per year. This year, MH won’t reach 40,000 of that total. What happened?

SamZellManufacturedHousingIndustryManufacturedHomeCommunitiesMastheadIndustryCommentaryMHProNews

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The National Association of Realtors’ ™ (NAR) Chief Economist, Lawrence Yun, estimates the immediate need for 8+ million housing units.

NAR’s Yun – No Quick Fixes Spell$ Manufactured Housing Opportunitie$

NAR’s findings are similar, but from a different perspective, than the National Low Income Housing Coalition’s research revealed.

NLIHC CEO Responds on HUD’s Worst Case Housing Needs Report, MH Leader Reacts

Several tech sector giants are making related plays in PreFab or Modular housing – precisely for the kinds of reasons that Belsky cited. But they have not yet made announced moves into far more affordable manufactured housing ‘done correctly.’

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Killing Off 100s of Independent Manufactured Home Retailers, Production Companies – Tim Williams/21st Mortgage “Smoking Gun” Document 2

Applying Zell’s mantra of looking where others aren’t as focused, and exploring the causes of why manufactured homes aren’t already soaring yields some surprising insights for those willing to make the long term plays, as Warren Buffett and Sam Zell have done.

But it is arguably precisely by ignoring some of the problematic parts of the Buffett dominated Manufactured Housing Institute (MHI) moves that the greatest opportunities may be found.  Because they are either clumsy in carrying out their own agenda, and/or clever in setting the table in a way that is choking off smaller firms that is leading to an accelerated consolidation of them by larger ones.

Manufactured Housing Institute VP Revealed Important Truths on MHI’s Lobbying, Agenda

Duty To Serve, “Complete Waste of Time” per Tim Williams, CEO/21st Mortgage; POTUS Trump, Warren Buffett Insight$

HUDCodeManufacturedHomeProgramShakeupDrainTheHUDSwampManufacturedHousingIndustryDailyBusinessNewsMHProNews425

Enhanced preemption is precisely, combined with other advantages found in manufactured homes already, that makes manufactured housing so attractive.

Thus, when the truly bold ‘move’ for growth by the giants are finally made – and they themselves are signaling that they are close to doing so – the big money can be earned.

FollowTheMoneyPayMoreAttentionToWhatPeopleDoThanWhatTheySayMartyLavin6MillionYachtManufacturedHousingIndustryDailyBusinessNews600

Lavin is an MHI award winner, and a success story in communities, retail and finance.

“Perverse”–Warren Buffett-Dodd-Frank, CFPB, Manufactured Housing, Loans, Independent Businesses Fact Check$

Accelerated growth is already being earned in local markets.

Manufactured Housing Monday Morning Sales Meeting: Finance & Industry Facts, Figures, Sales Tip$ Improving Best Practice$

Smart players are already in, and going deeper in.

Sam Zell, Randy Rowe, John Bostick, Terry Decio, Joe Stegmayer, Marguerite Nader, Barry Noffsinger – Manufactured Home Industry Interviews

Terry Decio, Skyline Homes, “The Secret” – The Rest of the Story

2018 Outlook-Crisis Spell$ Opportunity, Per Leonard Kiefer, Freddie Mac Data

With hundreds of billions coming into the U.S. expected in 2018, will some of that find its way into MH?  Would it surprise anyone if it does, given that billions have already gone into community and other acquisitions?

Bloomberg, HousingWire, Realtor and Fox all suggest Manufactured Homes as Important Solution for Affordable Housing in America

“The Solution to the Affordable Housing Crisis is Hiding in Plain Sight”

Programing Notice

The next Monday Morning Sales Meeting will have more on what current players – even modest ones – can do in their local markets to tap into the solution for the affordable housing crisis hat is hiding in plain sight. That will be published Monday, January 8th. “We Provide, You Decide.” ©
(News, analysis, commentary.)

(Image credits are as shown above, and when provided by third parties, are shared under fair use guidelines.)

SoheylaKovachManufacturedHomeLivingNewsManufacturedHousingIndustryDailyBusinessNewsMHProNews-Submitted by Soheyla Kovach to the Daily Business News for MHProNews.com.