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“Trailer Parks,” Presidential Candidate, Prior HUD Secretary Julian Castro on MH Community Operators, Residents Not Knowing Their Rights

May 20th, 2019 Comments off

 

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If you don’t think that manufactured housing could become a 2020 campaign issue, as part of the broader affordable housing debate or otherwise, then the video below is just one of several reasons why it could be.  Perhaps even why it should be.

 

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Credit, Wikipedia. Note that MHProNews coverage of a candidate at this stage should not be construed as an endorsement. However, MHProNews will later discern and recommend specific candidates in each of the major parties that we think is the best candidate from that party for our industry and consumer’s interests.

Don’t forget what the Last Week Tonight with John Oliver viral hit “Mobile Homes” video launched – and revealed.

For example, as an upcoming report will reflect, the word heard from statehouses to Washington, D.C. is that the HBO satirical assault on specific manufactured home firms is sparking political debate.

That storm cloud could spell problems for manufactured home industry independents. And with HUD Code shipments already down, for 7 straight months.  It begs the question, will the Oliver video have an impact sales too? What is certain is that ignoring the political warning signs that could become business impacts is not an option for savvy professionals and investors.

In that context, at a minimum, this first video below is a reminder that affordable housing is an ongoing issue. Manufactured homes have a role to play in that scenario. Prior HUD Secretary Julian Castro acknowledged that in the video in his own words.

 

 

Castro did not put down manufactured homes, even though he could have done so in this agenda-driven video interview. At the same time, Castro raised issues that are not so different than the ones John Oliver’s errantly namedMobile Homes video raised.

 

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You must meet people where they are. Terminology must be taught and caught. Make a habit of using the correct terminology. Share correct terminology with others, because it matters.

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

 

Castro’s Favors to MHVille?

It may sound odd from a pro-industry publication, but former Secretary Castro may have done the industry a dark favor, by speaking out frankly on topics that Oliver’s “Mobile Homes” has made an issue too.  ICYMI, or need a refresher on the background to the Oliver video, see the report linked below.

 

Prosperity Now, Nonprofits Sustain John Oliver’s “Mobile Homes” Video in Their Reports

 

What will the manufactured home industry’s independents and other leaders do to fix the harmful stereotypes and vexing problems?

In the Manufactured Housing Institute’s (MHI) favor, and to their ‘credit,’ they obtained the Castro video below, while he was HUD Secretary.  It should be married up with the OZY Media video, above, compared and contrasted.

 

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Note that MHProNews coverage of a candidate at this stage of the 2020 race should not be construed as an endorsement. However, MHProNews will later discern and recommend specific candidates in each of the major parties that we think is the best candidate from that party for our industry and consumer’s interests. If significant independent candidates enter the 2020 White House race – such as Howard Schultz – we likewise reserve the right to discern and potentially endorse an independent in the race for 2020. Rephrased, we expect to have a candidate among Democrats that we will say is the apparent best from that party for the interests of the MH industry and consumers perspective. We expect one candidate from the GOP, and possibly one from independents and/or minor parties. That will maximize manufactured housing’s independents and MH homeowners potential influence on the 2020 race.

That said, why didn’t the Manufactured Housing Institute (MHI) successfully and sufficiently engage back then with Secretary Castro to get him to use correct terminology in a video like this?  That’s but one of several possible questions.  Frankly, the terminology is arguably less Castro’s miss than MHI’s.  Why?

Recall, it is MHI that claims to represent all segments of factory-built housing.  They have taken on the mantle of the industry’s post-production national trade association.  That makes it their job.  They should do their job properly, change their claims, or get out of the way.

MHI also claim to be promoting the industry and regulatory conditions in their IRS Form 990 filings. Those IRS forms are 990s are signed by Richard ‘Dick’ Jennison under penalties of perjury.

The Castro video was obtained years ago.  Is that more than enough time to post it on the MHI website?

 

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The HUD Secretary Ben Carson speech has been missing from the MHI website, but so too is this one from HUD Secretary Castro. Doesn’t this once more prove the point of equally controversial Frank Rolfe?

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Rolfe is a prominent – and controversial – MHI member.

 

This is the tip of a proverbial iceberg. Will enough MHVille professionals learn from the 2009 fiasco?

 

 

For a more complete understanding of the issues at play, and for a new report that goes in depth on a public site that you can share with others, see the link here and below the byline and notices.  During an affordable housing crisis, MHI is seemingly asleep at the switch as manufactured home shipments have dropped for 7 straight months. These are reality checks – stark wake up calls.

 

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As a pro-ethical growth, pro-industry, pro-consumer trade publisher that is the runaway #1 in manufactured housing, it seems apparent after years of mild to modest challenges that question MHI’s leadership, that more direct and serious efforts are arguably needed. See the related reports below for more insights and details.

 

That’s this Monday Morning’s second look at reality check of manufactured housing “Industry News, Tips, and Views Pros Can Use,” © where “We Provide, You Decide.” © ## (News, analysis, and commentary.)

 

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Factory-Crafted Home Living, Reimagined – “The Art Park” vs. MHCs – Interview with Robbie Antonio, Founder of Unicorn Revolution Precrafted Homes

June 20th, 2018 Comments off
TheArtParkRobbieAntonioRevolutionPreCraftedHomesManufacturedModularPrefabHousingIndustryDailyBusinessNewsMHProNews

Still from the video below. Text, collage by MHProNews.

Housing is a global need, and Asia is the largest market. As the Daily Business News recently reported, U.S. based Hometown America is one of several operations in manufactured housing that has ties to Asia, some of which are deepening.  Hometown’s recently announced deal is valued at nearly ½ a billion dollars.

 

CNBC is a division of NBCUniversal, and their “Managing Asia” program is about the Asia Pacific region, featuring CEOs, entrepreneurs and other business leaders.

Divestopedia defines a unicorn like this, “…a unicorn refers to any tech startup company that reaches a $1 billion dollar market value as determined by private or public investment. The term was originally coined by Aileen Lee, founder of Cowboy Ventures.”

In a release to MHProNews, CNBC’s Christine Tan provided the following transcript of an interview with Robbie Antonio, or Revolution Precrafted, a firm which asserts their focus on “Modern Prefab Homes by World Renowned Architects & Designers.”

Here in the U.S. “trailer parks” evolved into “mobile home parks” of 5 (+/-) decades ago have become what a number of industry professionals today refer to as “land lease communities” or “manufactured home communities.”

Forget all of that for the next few minutes, save as history and background.

Then, consider what Robbie Antonio is doing to bring factory-crafted homes into the future. Note how Antonio is attracting global attention, including well qualified buyers and investors alike.

The project that Tan is asking Antonio about is the one in the video, below.

 

 

Christine Tan: You know Robbie, we’re here at this 150 hectare park at Batulao Artscapes which you call a living Art Park. What can one experience by living here?

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Robbie Antonio. Credit: Design Bloom & Revolution Precrafted Properties.

Robbie Antonio: I’ve seen other art parks around the world and many of them are just museums and you get to see art and then you go back home. Imagine living in it. Imagine living in a David Salle house, Elizabeth de Portzamparc house, and really being surrounded by this magical environment.

C: What is the price point? How cheap can a prefabricated housing be?

R: The house and lot here is less than 50,000 dollars which is about 3 million pesos or so

C: Your family has been in real estate for almost 30 years. You started Revolution Precrafted in 2015 to essentially create a startup for prefab housing. How did you stumble upon the idea?

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R: I come from the real estate world and I’ve been doing this for over 10 years. In New York, I built my own company called Antonio Development where I did a project in the Plaza District, the most sought after area in all of Manhattan, close to Central Park where nothing has been made in 20 years. So when I did that with Mr I.M Pei, it was the first round of residential products I had ever done. At the very early age of 28 I started the idea of positioning buildings in a proper format, came back to Manila and did a flurry of branded towers with fashion companies such as Armani, Missoni and Versace. I did Trump Tower and also projects with Hollywood icons such as Paris Hilton where I did 9 towers with them. In mid-2015, I wanted to do something extremely disruptive. I wanted to be an asset-light, no inventory business and global.

C: So you were tired of the old model?

R: Yes, to begin with, and second I was looking at major unicorns like Airbnb and Uber from miles away and I basically said this to myself: “What do they have in common?” I asked myself this for a straight week. No inventory, asset-light, using technology and truly global.

I feel that I’m a man of the world and I did not want to just do projects here in Asia. I wanted to look at the world as if it were all the same country and I wanted to be global without being asset heavy. Then it just dawned upon me. It was like a Eureka moment, an epiphany in the middle of 2015. I wanted to investigate an industry called the prefab market, a space which allows you to get from Point A to Point B very succinctly.

It’s a means to the end, not the end. The end is to truly be everywhere, ubiquitous, and I wanted to be prevalent and omnipresent in all the regions of the world. I’ve told my team I want to be in 25 different countries this year, 55 by next year, 85 in 2020 and possibly go public then.

C: You’re not worried about cannibalizing your family’s real estate business?

R: Why would you talk about cannibalization when you should be talking about complementary businesses?

C: How so?

R: We’re in Batulao, it’s a 145 hectare development. This specifically is a Century Properties Development, the only 1 I’m doing out of 11 countries and all the master plans we have closed. Case in point you have David Salle’s house there, Elizabeth de Portzamparc’s house here. Most of these developers outsource construction and supplying of construction to an entity anyway so that’s adding value, not cannibalization.

C: So I know it’s your own business but what did your father say when you told him about it?

R: I told him after the fact. I said this is what I’m doing, I’ve been working on this and I’m recently launching this in Miami Art Basel which had just happened a week or 2 weeks before. So I’m very independent, I’ve always been an independent person. To be emancipated and to really feel empowered is something that is integral to my existence.

C: You literally introduced brand to the whole concept of prefabricated housing by listing well known designers like the late Zaha Hadid and Tom Dixon to create these pre-fabricated housing for you. How do you get these high-end well known architects and designers to create something? They’re so used to big budgets, how do you get them to create something at a fraction of the cost? How big a challenge was it?

R: That’s the point. That’s why it was so intriguing for a lot of people and that’s why it was so intriguing for me. I always say in business that if someone’s in, I’m out. So that really means I always want to be a first mover in anything I do, and for this particular case as you just stated a lot of these brands are used to doing mega mansions or mega museums. Jean Nouvel’s did the Louvre Abu Dhabi, a billion dollar project but now we’re doing a Jean Nouvel museum here for not even 0.5% of that. So it was this antithetical rationale and business concept that was intriguing for them.

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Collage based upon still from video above.

C: They took it as a challenge?

R: Of course! If you have the foremost brands in design and architecture doing really expensive structures with probably no budgets at all, you get people to think a little bit more. That sets parameters like a mathematical equation and gets people to challenge themselves more.

C: I can understand architects, but you recently just signed on Manny Pacquiao –

R: That was last night, haha.

C: What has boxing got to do with housing?

R: I’m going to do sports cities around the world with him.

C: That’s your latest addition?

R: That was yesterday, he’s our 76th one. I told everyone in my office that I’m going to stop when we hit 100 and take a break.

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MHLivingNews and MHProNews were the first in the manufactured home space to spotlight this rising star in prefab housing. Note the thinking of Robbie is similar to that of builder-businessman Donald Trump – “I like thinking big. If you are going to be thinking anyway, you might as well think big.” https://www.manufacturedhomelivingnews.com/young-guns-legends-robbie-antonio-eric-trump-high-end-designer-prefabs-class-for-the-masses-revolution-pre-crafted-properties/

C: How did you convince Manny Pacquiao to sign with you?

R: First we’re the only branded housing company in the world, bar none. So ultimately it’s a choice of doing it with some entity that has not done it or it’s not within their business plan, or doesn’t understand the full ethos of high impact design and doing it at an accessible price point.

He’s a humanitarian and that’s what I like about him. So we’re talking about creating sports cities and fitness centres under his name and his design, possibly even his land and really trying to change his neighborhood. That’s what I found also enthralling about the entire conversation, and we’re going to go after it. I don’t go for brands just because they’re famous; I go for people who are relevant.

C: So, you’ve got housing, you’ve got this, and you’ve got sports cities and sport complexes, what’s next?

R: At Revolution we’re doing multiple products in multiple geographies. I want to be in 6 regions in the world pretty much everywhere in the world. We’ve hit 4, definitely Asia with our projects in Myanmar, Philippines and Indonesia. For Dubai, our mega project in 9 islands in the world, we’re a foreign group doing something there where not even locals have actually announced so it has been something really interesting to us. I just came from Bahrain where I spoke and we’re definitely going to enter that market as well.

C: But what’s next? Office towers? Skyscrapers? What’s next for Robbie Antonio?

R: We’re going to go vertical, and we’re going to do prefab condominiums and prefab hotels later on this year. We’re actually going to do an Art Hotel here which is still relevant to the art concept. Aside from just creating products, we also engender creative and ingenious concepts for different master plans.

C: Revolution became profitable barely a year after it opened for business.

R: Yeah, the first quarter actually.

C: Did you ever think you would be so successful so quickly? You’re actually the Philippines’ first unicorn startup

R: I mean, I knew we were going to be successful, but I didn’t know the speed with which we were going to achieve this. A lot of these other mega startups, so-called unicorns have unbelievable valuations which raise a billion dollars so on and so forth, but I wanted to stay true to the integrity of the firm to be an asset light business model and to be everywhere.

C: You’ve signed up more than 7 billion dollars in deals in countries like Puerto Rico, Japan and Dubai, in more than 10 markets. Which overseas markets are you eyeing next?

R: I’m going to Europe next week, to 8 or 9 different countries. Scandinavian countries love modular prefab systems and I’m going to Norway, Sweden, Finland, also going to Poland as well and Spain. But this is a night each, this is no vacation. I haven’t had a single day of vacation since I started the company.

C: I understand the basic concept of your business model is that you manufacture parts of the home in the factory then you ship them on-site before assembling them like Lego bricks. How big a challenge is that, logistically?

R: Extremely complex. The prefab business has always been a fragmented industry, meaning that American prefab companies cater mostly to American end users and you go straight to retail. Asian ones are catering to Asians, Malaysian ones are catering to Malaysians and so forth, and it’s the same thing in Europe.

C: So you try to build the factories close to your projects?

R: No, that’s why I have a network, because the orders are coming from different parts of the world. In some cases for example Batulao is not all, fully prefab. Some are inserted on site in terms of some of the components.

C: So it’s basically cheaper to do it that way?

R: Yes, and faster. This goes back to the value proposition of Revolution. The first is speed, we’d like to say we produce things – we used to say at least 90 days, but now I produce in 45, 60 days.

C: So how safe is your housing, Robbie?

R: These are rigorously tested from the factories which go up to 250km/h seismic conditions to the highest degree, so these are very strong robust structures.

C: So just to clarify they can withstand a bad typhoon or a bad hurricane?

R: Why do you think we’re shipping in Puerto Rico and why do you think our orders are coming from there? Didn’t they just have a massive hurricane there last year? This is exactly why the value added is also helping people get to the points they usually can’t get to. For example, Islands, Dubai the World Islands is perfect. Puerto Rico, Vieques is perfect.

C: So you’re actually solving the world’s housing shortage problem?

R: In a way. I mean think about it right? It’s not all about design anymore. The amazing thing about it is it’s not a want, it’s a need and that’s something we’re trying to solve here.

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Still from video above.

C: I know you’ve done the math, so I know you’ve worked out how much it costs in terms of transportation costs and shipping, give me an idea how much it costs to actually ship such a big structure to market?

R: It’s actually not that much. Our containers ship a little bit over a thousand US Dollars only, so some of these homes can be put in 2 or 3 containers and you can do the math, when it gets from one point let’s say Southeast Asia to Australia.

C: So you’re inking all these multimillion dollar deals everywhere across the world. But are you investing enough in factories to support the kind of growth you see overseas?

R: We have an amazing network of global fabricators, and depending on where their orders are coming from and from which region in the world, I basically make that call and start producing these homes. So it’s a really B2B2C model where we partner and form a joint venture or we supply to a developer and they turn it out to the end user, and so far the sales have been super robust. For example, our project in Lakeshore Pampanga, the world’s first livable food bar, sold over a 1000 homes in about 2 months so it’s very enriching to see that people appreciate what you do.

C: Are you upping your investment in factories? What sort of amount are we talking about?

R: Absolutely. Ultimately later on I’d like to have different networks of different fabricators, but I’m not at that point right now. I’d like to create my own because I’m literally a control freak.

C: You want to set up your own factory?

R: Yeah.

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C: When will it happen?

R: As early as this year actually. I’m already having conversations with amazing technology providers and we’re just going to go make the investment

C: So how many of your own factories do you ultimately want to have?

R: Ideally I’d like to have 1 per region, so ultimately that will be 6. I’ll start with Asia because that’s where most of the orders are coming from.

C: So, late last year, you’ve actually raised an undisclosed amount of money in your second round of funding from Singaporean venture capital K2 Global. Given all these deals you’re inking and your need for investment in factories, how soon before your next capital raising exercise?

R: I’m probably not going to do a Series C because we don’t need the money until maybe next year. We’ve gotten good fresh round from institutional investors and large family offices so I think it won’t be until next year when I have hundreds or thousands of these homes already and different master plans to show, and I’ve reached the goal of hitting the 25 countries we have to have penetrated by the end of the year.

C: What are your plans to take Revolution public? What are you looking at?

R: I mean there are only 2 ways to go to exit out of this or to maintain it. One is to sell it to a company.

C: Are you interested in that?

R: Look, the biggest homebuilders in the world are in America and they’re worth 10-13 billion so how can they buy some entity which should be selling at more than that? So the only way to go like many of the unicorns you’ve seen is to go public

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C: Where would you list?

R: Probably America, UK, or Singapore

C: What sort of time frame are you looking at?

R: Maybe 2020 or 2021.

C: Give me a sense of how big you will be in 2020?

R: 85 countries, we hope – north of several billion dollars of revenue a year.

C: North of several billion dollars?

R: That’s for sure

C: What are you talking about, 10 billion, 20 billion?

R: No, that’s probably a valuation but that will be very difficult to achieve in terms of revenue and high profitability. The greatest thing for our business would be if we can achieve the sort of scale where we can be truly global, supply everywhere, and be very highly profitable.

C: What is highly profitable to you? What sort of figure are you looking at?

R: 30, 35% margin

C: And is that something you’re looking at?

R: So, think about it. We have total project revenues about 7.2. About a 3rd of that goes to construction, that’s our revenue. So you can just do the math accordingly and then we make about 30% of that, so that’s what we’re expecting from the current deals. I haven’t even got to Europe yet though, but that’ll be next week.

C: Do you worry about expanding too fast?

R: Do I worry about expanding too fast? I don’t think I’m expanding fast enough in fact.

C: Really?

R: I’m a man of instant gratification and quite frankly I need to see things done very quickly. Expediency is integral and I always say my biggest weakness which is actually my biggest strength as well, is my impatience. I like to see things in a jiffy.

C: Will you be happy just heading Revolution Precrafted? Is there something else in the pipeline you want to kick off?

R: Not at all, I don’t think this is the ultimate legacy.

C: What other things are you planning?

R: I think we’re doing something great here.

C: But what projects would interest you? Does it have to be a 100 million dollar idea or 200 million dollar idea?

R: No, it’s got to be a several billion-dollar idea for me to jump and be excited about something, and it’s not just about the math believe it or not. It’s about truly changing the way people think about something. That’s what really interests me, the challenge of that. The sheer challenge and difficulty of achieving something that is seemingly insurmountable challenges me.

C: You father is well known Philippine real estate tycoon Jose Antonio of Century Properties. You’ve joined him in the ranks to be among Forbes’ 50 richest in the Philippines. How does it feel like to create your own business, to be successful in your own right?

R: It’s obviously gratifying. I know a lot of people and friends from different countries who are of the 2nd or 3rd generation and I respect that but I respect the founders more. I mean growing a business is very impressive, but starting a successful business is the most difficult thing.

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C: So you don’t want to be seen as the 2nd generation, you want to build something in your own right, in your own right?

R: I’ve already done it, so I think that’s the point of this exercise. And look, I don’t know what you call that, insecurity. Sometimes when I interview people I actually like people who are because they always have something to prove and when you have something to prove you work harder than everyone else.

C: You have something to prove all the time?

R: To myself. Not to anyone else, but to myself.

C: So your family is in real estate, your father obviously running Century Properties. Any valuable lessons you picked up from him over the years as young boy watching him grow his business?

R: I mean I obviously thank him because my love for real estate came from him so I will never take that away from him. But the desire to do something differently, the desire to create something is truly inborn and sort of innate with me, so I always try to innovate, disrupt an industry or industries.

C: Whether it’s Paris Hilton, Lenny Kravitz or Adrien Brody, you in particular hang out with the who’s who in the celebrity world. What’s it like having friends in such high places? Is it mostly business or mostly pleasure?

R: First, I don’t just hang out with celebrities. I mean a lot of people think that but a lot of it is they’re my friends. Some of them are my very good friends or my best friends. To me work is play; to me a trip in Spain has got to be filled with meetings aside from other things. It’s all intertwined in one.

C: So you always try to find a way to turn a personal relationship into a business relationship? You’re always looking for an opportunity?

R: I always think, “Is there a deal here?”

C: So when you’re talking to Lenny Kravitz or Adrien Brody, you’re always thinking is there something I can do with them?

R: I bet you half of them are thinking the same way! So I might as well just make the first move, some of them may come to deals and some of them may not be deals and that’s really ok,

I get back to them in a couple of months or weeks when I have something formidable because I want everyone to be excited by this.

C: You’re one of the most well connected young Filipinos today. You’ve been described as someone with a magnetic personality that no one can say no to. Are you really that persuasive when it comes to closing a deal?

R: First I think I give the value proposition in a succinct and formidable manner where they can truly understand it and buy into it. I think obtaining 76 of the world’s best architects and designers is not an easy thing and I’ve been doing this prior to this, so I’ve totaled it to about 84, probably more than any human being in the world

C: So you just turn on that Robbie Antonio charm to get people to say yes to you?

R: No, I mean, I think it’s just my personality. I’m very much driven by obtaining these things

C: Do people ever say no to you?

R: Of course some people do. Very few, but some people do. Most say yes and we’d like to keep it that way

C: You’re 41 years old, born in the Philippines. You studied many years in the US, got your Economics degree there, an MBA from Stanford, spent 5 years working in the US, joined your father’s business in 2009, and then really founded Revolution Precrafted in 2015. How would you describe your leadership and your management style? What is Robbie Antonio like?

R: I’m hardcore. I have an almost West Point type of leadership, military style. In fact I love interviewing military people, people who have business backgrounds because they’re very disciplined. I wake up my team up at like 4:35 in the morning.

C: You wake them up at 4:35 in the morning?

R: Yeah, I basically Whatsapp all of them and I ask for reports and all that and I’m probably the last person they hear from in the evening.

C: Is it true you have a rule in the office where employees have to answer a text or an email within 10 minutes of getting it and accomplish the task within 24 hours?

R: Yeah, that is correct and if I don’t hear from them, I have 1 of my assistants (and I have 4) contact them to get me a response.

C: Why is speed important to you?

R: Because it’s always a race. People say it’s not a sprint, it’s a marathon, but I strongly disagree. It’s both, it’s always a sprint and then you need to be sustainable to make it a marathon.

C: And finally as one who’s won awards and really made the journey, what advice would you give other young entrepreneurs on how to build great disruptive businesses?

R: Think bold, always think big and achieve it no matter what people say. Be passionate, be obsessed, do it all. Know your rights and never, never, ever give up. Once you give up it becomes a habit and you don’t ever want that to happen. ## (News, analysis, and commentary.)

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Related Reports:

$1.1BillionDollarPreFabProjectRobbieAntonioRevolutionPreCrafttedHomesDailyBusinessNewsManufacturedModularPrefabHomeIndustryMHProNews

Robbie’s Revolution Precrafted’s $1.1 Billion-Dollar PreFab Project

 

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Intelligence Report – MHI Producer Spotlights “the Plan” for MHCs, Community REITs

March 29th, 2018 Comments off

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A senior management team member for a HUD Code manufactured housing (MH) production company told the Daily Business News about the emerging plan for MH Communities, according to a REIT moving towards capacity.

 

As MHProNews has reported, a third or more of new manufactured home shipments are going into land-lease communities. 

While new homes are being purchased by communities of all sizes, large numbers are being ordered by “portfolio operations,” including Real Estate Investment Trusts (REITs), such as Sun Communities (SUI), Equity LifeStyle Properties (ELS), and UMH Properties (UMH).

 

As an Manufactured Housing Institute (MHI) member company president told the Daily Business News, if new home shipments going into land lease community are factored out, then new home production is essentially flat. In some states, shipments of new homes are still declining since the official bottom for the industry was hit in 2009. 

 

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Given the comparison in price and value, it is difficult to for many third parties and industry professionals to imagine how manufactured housing (MH) can be hovering at around 9 percent of single family housing starts.  That’s far below MH’s historic norms (see shipment chart above). Some point to the affordable housing crisis, the quality of today’s manufactured homes, and ask a question similar to what the Urban Institute (UI) did in January, even though they may come to a different conclusion than UI did.

 

While Manufactured Housing Overall Rises, Some Slip Sliding Away

Another MHI member producer’s president and vice president both said that based upon current trends, they expect a three to five year window, before MH Communities fill their vacancies of existing home sites. 

Against that backdrop, a new MHI production source tells MHProNews about his insights learned from the plans that Sun Communities (SUI) and another major portfolio operation.

Sun, a titan in the MH Communities sector, are planning beyond their current vacancies. They, per our source, are looking beyond vacant lots, and planning on replacing older homes on occupied but dated home sites. Some of those sites are odds sizes by today’s standards, he explained, which may require special models of homes designed to fit certain lots.

If that replacement of aging inventory becomes a trend, as rental units did after Dodd-Frank, such a replacement process may continue the orders coming from giant land lease operations.

That means the production cliff some are concerned about could be extended beyond the thousands of now vacant home sites in MHCs.

That may sound like good news for HUD Code home producers.  But those replacement plans are not likely to be as busy as the current infill in the dwindling numbers of vacancies in MHCs, coming primarily from homes being offered as rental units. 

The fact that so many homes are being sold as rentals instead of sales to home buyers as was the historic norm is in itself a troubling trend, per producers. 

 

The Take Aways

All of the above implies a coming new home shipment cliff in manufactured housing, unless some new trend or development takes place. 

While the industry’s members are in several cases understandably celebrating modestly rising new home shipment levels, the underlying realities are not as rosy.

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When 92,900 new HUD Code manufactured homes are divided by the 5.57 million units of new existing housing sales, you get 0.01667863554. That means that only new manufactured home sales is equal to only 1.67 percent of the sale of existing conventional homes. With 8.3 million new housing units needed in the U.S., what explains the relatively low levels of manufactured home sales?

Given the nature of their business, MH production companies have to be aware of such trends.

As another HUD Code MH producer – an MHI member and careful reader of MHProNews – has said, MHI’s official policies, plans and positions “have made no sense” for “several years.”  

All of the reports noted herein are from MHI only member companies, not from members of the Manufactured Housing Association for Regulatory Reform (MHARR).

Given the affordable housing crisis, and MHI’s indirect admission of their failed industry promotion and marketing plans, industry professionals and public officials alike ought to take notice.

Some producers told MHProNews that they are “open” to being acquired by larger companies.

So the data like the above ought to be of concern to independents, including MH retailers and other industry operations who want to remain independent.

Among independent factory home builders, even those planning to sell at some foreseeable point, should realize that Warren Buffett and another larger player are both known for trying to buy “cheap” rather than at full value.  If historic normal shipment levels existed today, it would translate as more value for those firms who are thinking about selling.

The latest report by the Manufactured Housing Association for Regulatory Reform (MHARR) lays out step-by-step examples of how MHI was on the wrong side of issues that both associations were engaged with. In case after case, MHI had to pivot toward MHARR’s original and steady stance. How can that be so consistently true?

In all of this, per sources, MHI is being revealed as de facto working mainly for the interests of major consolidators, while posturing “activities” that in fact has proven time and again to largely be fruitless. A look at the dues structure of MHI, and who three of the four MHI Executive Committee seats are held by paints a picture.

The Daily Business News review of the MHARR report is linked here. The full length version without commentary of MHARR’s report is linked here. “We Provide, You Decide.” ©. (News, analysis, and commentary.)

Related Reports:

“Razzle Dazzle,” Says Former Manufactured Housing Institute Member

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Manufactured Homes Knock Tiny Homes Down to Size

April 13th, 2017 Comments off
ManufacturedHomesKnockTinyHomesDowntoSizecreditStanwoodCamanoNews-postedtothedailybusinessnewsmhpronewsmhlivingnews

Kerstin Gillespie’s manufactured home. Credit: Stanwood Camano News.

While “tiny homes” may be all the rage, more and more people are finding that the real value is in a tried and true model.

According to the Northwest Housing Association (NHA) in Olympia, Washington, more and more people who look at tiny homes as an option have discovered manufactured housing not only offers affordability, but also meets meeting zoning, building and life safety standards that many tiny homes do not.

My home is really cute,” said Kerstin Gillespie of Allyn, Washington. She purchased a 586-square-foot manufactured home, placing it on family land to live in while she attends graduate school in nearby Tacoma.

Inside it has 9-foot ceilings, lots of windows and lots of light. I went with a manufactured home because I’d had a good experience buying one before and knew I could move in quickly and get more home for the money.”

Gillespie was able to customize her home, an option that often gets lost among the stereotypes surrounding “mobile homes” or “trailer parks.” HUD Code homes must be at least 400 square feet. The houses compete favorably with the cost of tiny homes; their lower price reflects the efficiencies of being factory built.

Per Stanwood Camano News, unlike tiny homes, which are still struggling with state and local regulations, buyers of manufactured homes generally avoid building code and zoning issues in Washington State, as it passed a law in 2005 preventing cities from discriminating against these manufactured homes.

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The inside of a Fourleaf Properties manufactured home in Dallas, Texas. Credit: Candy’s Dirt.

Manufactured homes are built to a national code that ensures homes meet basic structural, safety and energy standards,” said Craig Sedlacek, the program manager for the Factory Assembled Structures program at the Washington State Department of Labor & Industries. The organization conducts building inspections for manufactured homes.

There’s no real definition for a tiny home. It might be built to a local code, a recreational vehicle (RV) code or no code at all. It’s important for buyers to understand what standards a home is built to before they buy it.”

Sedlacek also points out that the standards cover important questions about where a home can be located and whether it meets health and safety standards.

One big trend we are seeing is an increased demand for smaller, well-designed floor plans,” said Kevin McShane, sales manager for the Fleetwood Homes plant in Oregon.

The tiny home term is used a lot, but we find that homes under 300 square feet are too small for most people. Floor plans with 500 to 1,000 square feet of living space are now about a third of our business and growing.”

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MHProNews and MHLivingNews have covered the “tiny home” movement extensively, including the potential for big legal trouble for owners and a detailed side-by-side comparison with manufactured homes, highlighting function and value versus fashion.

 

(Image credits are as shown above.)

 

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RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.