The Masthead

Odds are, you want more favorable media for manufactured housing. Chances are good you want to learn how to grow and expand your business through favorable marketing, selling more homes and/or positive change management or maybe you want access to financing. Perhaps you are looking for a new manufacturer or supplier.

These are some of the business-building elements found in this three-part blog post!

Part I.

Let’s start with the latest on the International Networking Roundtable (INR), which is coming up fast (September 15-17, 2010)…

Joe Adams, Dick Ernst, Dr David Funk, Thayer Long, Ken Rishel, Randy Rowe, INR+ 12… in short: Marketing Magic, Media and Manufactured Housing!

Paul Bradley, Evelyn Bryant, L.A. ‘Tony’ Kovach, Susan McCarty, Jeff Mishkin, Fred Rice, Spencer Roane, Don Westphal. These are just some of the names who will inform, inspire and help guide you to better marketing, financing, deal making and more.

I’ve had the privilege of previewing Joe Adam’s upcoming presentation on Marketing for the International Networking Roundtable (INR) to be held in Phoenix Sept 15-17th at the Pointe Hilton Tapatio Cliffs Resort. Let me just say, you’ll want to BE THERE! If you love his feature articles here, you will enjoy hearing the great material delivered live by Joe Adams! I will be there and I hope to see you IN PERSON at this session and others.

In fact, there is plenty of star power bringing you great information at the 19th Annual INR. If you are interested in growing your business, all who are attending this seminal event say it is a great place to be for networking and learning what’s hot and what’s not; on-site deal making, financing opportunities, model homes on display and much more are all here. From the Gala Reception, show homes on display, to the prayer meeting for Our Nation and Leaders and more!

You can check with George Allen at 877-MFD-HSNG (877-633-4764) or 317-346-7156 for a brochure, actual order of appearance of the speakers and topics and related details. George tells me the list below is the latest update – in alphabetical order by last name, with their respective topics:

1. Keynote: ‘Effective Marketing in Tough Times!’ – Joe Adams, The Housing Market Place, Inc.

2. Panel: Open Forum Discussion of MHIndustry Issues & LLCommunity Concerns – George Allen, Moderator

3. Shared Equity, Reality or Fad? – Paul Bradley, ROC-USA

4. Keynote: ‘S.A.F.E. Act &You! UNSAFE or OK?’ – Dick Ernst, FINMARK

5. Keynote: ‘Loss Control in Era of Rentals & Contract Sales’ – Evelyn Bryant

6. Keynote: ‘MH Demographics & You!’ – Dr. David Funk, Cornell University Program in Real Estate

7. How to Get 150 Sales Calls a Week On-Site! – L.A. ‘Tony’ Kovach, Manufactured Home Marketing Sales Management, www.MHMarketingSalesManagement.com or www.MHMSM.com (Since I know the speaker, there is MORE on this topic below.)

8. National Communities Council Update – Thayer Long, MHI

9. Registration & Special Gifts – Susan McCarty, Community-Investor.com

10. Landlease Community Investors’ Forum – Jeff Mishkin, Marcus & Millichap

11. Utility Sub-Metering in 2010 & Beyond – Fred Rice, Spectrum Utilities Solutions

12. Is ‘Captive Finance’ For You? – Ken Rishel, Precision Capital Funding

13. Symposiums, Spinoffs & More… – Spencer Roane, Pentagon Properties, Inc.

14. Keynote: ‘State of the Manufactured Housing Industry’ – Randy Rowe, Green Courte Partners

15. Community Series Homes, One Year Later – Don Westphal, Donald C. Westphal Assoc.

16. Panel: Home Manufacturers & Business Development Managers!

17. NSAC Update: Why You Should Support the RV/MH Heritage Foundation!

18. Panel: Real Estate Lenders!

19. Wells Fargo, Manage America & Origen LLC will be among the other firms represented.

20. Welcome Reception, Introductions, Informal Prayer Meeting for Nation and Leaders, Breakfasts, Lunches, Toasts, Visit Home Shows, the Gala Reception and more!

21. Wrap-up Session & Open Discussion Topics for Next Year?

I had planned to attend this event even prior to my being invited to speak on Marketing Magic, Industry Image Makeovers and share a reflection at the Informal Prayer Meeting.

Part II.

In my INR presentation, I am going to talk about how to generate 150 in-bound sales calls a week to your location.

Marketing. Every business, every Industry that wants to survive and grow needs good marketing. Marketing that doesn’t cost, marketing that pays.

Good, solid ROI (Return On Investment) Marketing.

A key part of what we do at MHMSM.com is marketing. Yes, we have become the premier news source in the Factory-built housing Industry. Part of that was achieved through marketing, as well as having great content and, of course, the most news and feature articles found on any single site online.

I was asked by George Allen to give a presentation in Phoenix on Marketing, Media and Manufactured Housing. The title GFA suggested for the talk is How to Get 150 Calls a Week on Site!

• Those 150 calls a week refer to inbound sales calls FROM CUSTOMERS LOOKING FOR YOU!
• Those 150 calls a week refer to prospects in the market LOOKING FOR WHAT YOU HAVE TO OFFER!
• Those 150 calls a week could TRANSFORM any Manufactured Housing Land Lease Community location struggling with vacancies INTO A FULL LOCATION with a waiting list!
• Those 150 calls inbound sales calls a week could be a modular or HUD Code Manufactured Housing RETAILER’S DREAM!
• Those 150 calls are not theory. THEY ARE TAKING PLACE RIGHT NOW, TODAY for one of our clients. Not in boom time, but during this low ebb of the Industry.

It has long been my belief that Manufactured Housing – or most any aspect of factory home building – should never suffer due to the general ups and downs of the economy. We should be – and can be – the preeminent form of housing. The first choice instead of the last choice.

If you are looking for marketing solutions, sales solutions, a turn-around for one or more community or retail locations, business expansions or other Industry related business challenges, please give me a call. If you are looking for good PR for your company, please call.

Why should you? Please check out my LinkedIn Profile, for some of the currently 29 recommendations among my 469 connections: http://www.linkedin.com/in/latonykovach

Just two words.

GET RESULTS.

I should hasten to add, that all ‘results’ are a team effort. We are not alone. We work as a team, and that is how we would approach working with any firm or organization in the manufactured housing field. Team work that Gets Results. Specialists for many different needs. Solutions for your real world problems. Great ROI, good work doesn’t ‘cost;’ it pays.

Part III.

Getting Positive PR: Media Relations and Manufactured Housing

What do the Chicago Sun-Times, the Dallas Morning News, Nashville’s The Tennessean and about a dozen other publications from coast to coast have in common?

Answer: They have all featured news stories on their sites this year that have a favorable message for manufactured housing.

Answer: These favorable messages were all generated by MHMSM.com staff, notably our INdustry in Focus Reporter Eric Miller – or myself.

http://topics.dallasnews.com/article/0aaJfyqbtfgnQ

http://envirolib.org/news/support-urged-for-bill-aimed-at-replacing-of-older-manufactured-homes-24-7-pressrelease/

http://www.mhmarketingsalesmanagement.com/blogs/industryvoices/study-suggests-cities-and-towns-should-accept-new-manufactured-housing-communities/

Research Finds Manufactured Home Community Residents Under No Greater Threat of Crime

As you know, Manufactured Housing has all too often taken it on the chin from the mainstream media publications. Part of our goal at MHMSM.com is to share favorable news about Manufactured Housing and related issues.

As a media outlet ourselves, we can influence media.

Over time, this can have a favorable benefit for you and your business.

Should you desire favorable PR or marketing for your organization, please give me a call:
847-730-3692 or cell 832-689-1729.

Should you want to see what others say, please go to my LinkedIn Profile

Where you can see 29 recommendations of my work.

Business growth is often very much dependent on government activity. The right, or wrong, actions or inaction on the part of government can help or harm the business environment. We all know that fact. We know, too, that organization and concerted effort can pay off; this is true of the winner of each and every political campaign. The one better organized, the one that creates the most appeal and gets out the most votes, wins.

“What sort of government have you given us?” It is said that this was the question asked by a woman as Ben Franklin and others finished their work on the U.S. Constitution. Ben Franklin replied, “A republic, madam, if you can keep it!”

When we say the Pledge of Allegiance, we pledge our allegiance to the Republic, not to the democracy. We are a representative republic. On the national level, our laws are passed by representatives of the people. Our representatives in turn need to know what we the people want, in order for them to deliver it to us via the mechanism of law.

I can look you in the proverbial eye, and ask you to contact your U.S. Representative and Senators. I can do so because I’ve done so this past week; I did it, then turned to my colleagues and teammates and asked them to do the same! We can advance the cause of manufactured housing and modular home construction if we each do our part. That part can be done in just minutes.

Those timely contacts of our elected officials can lead you to the business growth you are investing your time, talent and treasure in!

If a dozen or two of us sound off, oh well! But when hundreds or thousands of Industry professionals like you, your associates and ours sound off, then WOW is the impact on Congress! From there, we can foresee how Congress can move to pass legislation or muster its weight to move regulators on issues that need to be addressed.

Manufactured and modular housing builders need to learn from and support each other. I will simply draw your attention to this article, Builders of Mods and HUDs, can they get along?

Then, I will say, we can and should be learning from each other and working together! We are stronger together – politically and economically – than apart.

Modular and prefab builders have an agenda that could be aided by HUD Code manufacturers, and vice versa. “Factory built housing” is a broad umbrella, one well worth each segment mutually supporting the other!

The summer break for Congress is over, and they are going back to work in Washington. 2010 is a key midterm election year and we are going into the final weeks of an election. There is no better time to get rapid results than NOW!

I am asking YOU to write. Please see the list of issues on my previous blog post; add some of your own if you like. Or do a personal intro of yourself and your company, and then attach all or those parts of the message we sent that you like. (The links for contacting your Reps and Senators are given in that previous blog post, too.) But please, I am asking YOU to do it! Because if YOU do it, you can rightly ask others to do it, too!

Then, I hope some of you will have the oomph to inspire others by posting a copy of the letter, fax or email you send to your Congress person and Senators below, or on LinkedIn. Or share the message you send to your Congress person and Senators with others you know in the Industry. This is a great time for concerted action!

You and your company are in business to make money. Congressional action can help that cause. There are far more reasons to act than not to act. Action ALWAYS trumps in-action! Thanks for all that you and others like you, in associations or businesses do to promote and advance the cause of manufactured housing today.

L.A. ‘Tony’ Kovach, MHM – publisher, editor and The Masthead blogger at
Manufactured Home Marketing Sales Management trade journal at
www.MHMarketingSalesManagement.com aka www.MHMSM.com
tony@mhmsm.com
847-730-3692

And remember! Tony also does contract marketing and coaching for industry clients. Marketing that doesn’t ‘cost;’ it pays off on your bottom line. Enough said! # #

Do you want to grow your business by 400% to 1600%? Want the simple tool to help make this happen? Well, then, please read on!

The Summer of 2010 has been a busy one for many of us.  We may not be selling all the factory built homes we desire, but we’ve made some marginal improvements during a time that housing in general continues to struggle.   We’ve seen a dizzying array of issues face our Industry, from finance, to regulatory and more.

Let’s be candid, we could use some help on Capitol Hill!

During the MHI Summer Meeting, Thayer Long said that over 80 Industry Members made personal visits to Congress.  A lobbyist – as well as Congressional representatives and their staffs – have expressed to me how important it is for your Senator or Congressman to hear from you, personally.  Lobbying is needed in this day and age.  But no one does it like YOU can do it.  A letter, fax or email from you to your Congressman or Senators can have an important impact.

MHARR and MHI have both advocated ‘engagement’ with Congress during this critical period of time for our Industry.

With the above in mind, I put together the message that follows. This was done with some very helpful polishing assistance from our Associate Editor Catherine Frenzel, whom I hereby publicly thank and acknowledge for her many contributions behind the scenes to our ever improving efforts at MHMSM.com.  I sent this off by email and in one case also by fax to each of the three who represent me.

I share the guts of it for your consideration.  You are welcome to use this, or elements from this, in your own outreach to Congress.  I won’t say this is comprehensive, it doesn’t touch on the SAFE Act issue for example.  But what it does is outline a variety of points that are important for us to achieve our potential as an Industry!

I am mindful that last month, we flooded the FHFA with “thousands” of comments!  There were so many, that it reportedly shut down their email posting system. Let’s approach Congress with that same type of vigor.

Take 20 minutes to an hour, and just do this.  Reach out to your Congressperson and your two U.S. Senators.  Please, do it today if you can, but don’t let it fall off your radar.  You are in this Industry.  You have associates whose jobs depend on this Industry.  Think, we could grow 400%-1600% by some estimates, if these items are addressed successfully in Washington.

That should be all the incentive that you and everyone who works with you needs.  I guarantee you, that if Congress gets floods of messages, like this, or in your own words, we will see action in 2010. I personally sent this on our letterhead.

stars and stripes image001

==>  Here’s the meat Tony sent to U.S. Legislators.  Feel free to use it. <==

Dear Congressman/Senator

I am a resident of Glenview, IL and a member of the Manufactured Housing Institute (MHI), an industry trade association that is based in Washington, DC. I am writing you today as the publisher of Illinois-based Manufactured Home Marketing Sales Management trade magazine (www.MHMSM.com), the Industry’s premier news and views resource, with 30,300 readers in July 2010. Our readers include owners, executives, association leaders and management of companies with more than 500,000 people still working across the U.S.

I have been working in various aspects of the Manufactured Housing Industry since 1981. To my recollection, we have never faced so many challenges as an Industry, as we do now.

We need your help, please!

INTRODUCTION

Danny Ghorbani, president and CEO of the Manufactured Housing Association for Regulatory Reform (MHARR), has stated in interviews with us that the industry has many friends on Capitol Hill. In fact, he has told me personally that we are “a dream industry” and loved by many elected officials, because we provide affordable quality homes for people of low to moderate income; we do so without subsidies and can also serve people of any income with appealing, safe homes that cost some 30-40 percent less than conventional construction. In states such as Texas, manufactured housing has provided as much as one-third of all new housing starts, but due to financing and regulatory challenges, we have slipped from a high of more than 372,000 homes in 1998, to just under 50,000 new homes sold by manufacturers in 2009.

At precisely the time that our great nation needs more jobs and affordable, quality homes, our Industry faces serious challenges. Congress has given the industry great legislation such as the Manufactured Housing Improvement Act of 2000 (MHIA 2000), FHA Title I Reform and the GSE’s “Duty to Serve” underserved markets provision passed in 2008. Yet implementing this legislation has been a real issue.

There are voices in Washington who now say we should turn away from supporting home ownership, and turn instead to providing support for rental housing. Where is the logic in that thought? Someone has to own a home, be it a rental or owner occupied! Support for rentals is like saying we will pump money into the hands of those who have it – the landlords – rather than give millions an opportunity to own. Those millions could build equity and improve their lives if affordable housing is made available to them.

The problem with the mortgage meltdown was due in part to forces putting people into homes they couldn’t afford, due to terms and qualifying that were too lax or counterproductive to long-term ownership and economic interests. But the idea of home ownership should not be discarded because of a breakdown or abuses of the system. That would be like saying that we should jail honest citizens because some people commit crimes.

Rather, the answer is that we need to create jobs through the availability of affordable quality homes! The manufactured housing industry, which has served the nation for decades, provides the answer.

THE CHALLENGES

Before addressing specific issues, let me paint a picture for you of what America faces and why manufactured homes and factory built housing in general makes so much sense.

1 The U.S. population is growing larger.

Based on the middle-series projections, the nation’s population is projected to increase to 392 million by 2050 — more than a 50 percent increase from the 1990 population. See: http://www.census.gov/population/www/pop-profile/natproj.html

2 The U.S. population will be older than it is now.

In all of the projection series, the future age structure of the population will be older than it is now. The last of the Baby-Boom population will reach age 65 in the year 2029. By that time, the Baby-Boom population is projected to be only about 16 percent of the total population. See: http://www.census.gov/population/www/pop-profile/natproj.html

3 The U.S Housing stock is aging.

The median age of US Housing Stock is 36 years. See: http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-138 (July 1, 2010)

An early report shows that the median year American homes were built was in 1969.

Most American housing is located in metropolitan areas; www.huduser.org/periodicals/ushmc/fall00/summary-2.html

Age, Size and Equipment Characteristics of U.S. Households: More than 90 percent of the current U.S. housing stock was built before 1990. See:

http://eetd.lbl.gov/ie/pdf/LBNL-43640.pdf

When we think about the lower energy standards of those older housing units, and the fact that many homes are 70-100+ years old, there is no question that American housing needs updating.

4 The current economic instability means lower earnings for millions of Americans.

President Obama has twice gone to Elkhart, Indiana, where unemployment is among the highest in the country. Elkhart is also home to many manufactured housing producers. The promise of jobs that were made there could be kept by providing the necessary political and regulatory support for manufactured housing.

VIABLE SOLUTIONS

To me and thousands of others in our Industry, when we look at the facts, we see a picture that says this:

• The real driver behind the U.S. Economy for decades has been housing.
• We need housing for a growing population. There is likely to be a large demand for smaller houses and more affordable houses
• We need to replace housing that is aging or in poor condition, including 2 million pre 1976 mobile homes (i.e., pre-HUD Code).
• As the population ages, we will need more single-level and affordable housing
• Only manufactured and modular construction of homes can rapidly meet the needs of the nation during a disaster.
• We need jobs, we need manufacturing…
• …so we need manufactured housing now more than ever!

We in the manufactured housing industry have production; we have an energy-efficient and affordable quality product. We have customers; we have demand. So the problem is not in our industry – it found in various bottlenecks is in Washington, DC.

WHAT CAN CONGRESS DO TO HELP?

HUD’s Teresa Payne told the MHI members at our Summer Meeting in Washington, DC this past July 13-15th, 2010, that “Manufactured Housing Still Rocks!” See

http://www.mhmarketingsalesmanagement.com/blogs/tonykovach/manufactured-housing-still-rocks/

That said, here are issues that in many cases have been hampered in Washington, DC, that are crying out for Congressional action.

1. Financing is the key to any big ticket sale. Financing helps retailers sell more new homes, and proper financing would help consumers re-sell used manufactured homes. There are currently some 20,000,000 such home owners in the U.S. and cutting off financing to them is like trapping them in their homes, should they need or want to sell. The next two points could specifically address this critical need for the Industry and the millions of people it serves.
2. GSE’s “Duty to Serve.” Congress passed this in 2008, and the GSEs have stonewalled. Let me share an analogy. If a citizen fails to abide by the law, we get fined, jailed or perhaps strung up! How can the FHFA fail to move on getting the GSE’s to implement the will of Congress?  What is the consequence for ignoring the law?
3. FHA Title I reform. The standards and rules that FHA has put in place will allow only the largest lenders to do FHA loans, due to the high capitalization requirements. While there are efforts underway to move this ahead, Congressional intervention could speed the process.  Letters from the House and Senate to FHA on making the entry requirements for lenders on the Title I Program could make a difference!
4. SBA Floorplan lending. Congressman Joe Donnelley of IN is seeking bi-partisan support for a measure to extend and improve the SBA floor plan lending program. Without wholesale (floor plan) lending, many retailers, developers and community operators simply can’t purchase homes from factories to display for retail buyers to see them. Donnelley’s measure could aid the industry considerably in this practical need, along with giving similar support for the RV and the Automotive Industries. H.R. 5734. The companion bill was the Small Business Lending Fund Act of 2010, Sen. Mary Landrieu, D-La.
5. Passing the Energy Efficient Manufactured Housing Act. Senate Energy and Natural Resources Committee adopted the Energy Efficient Manufactured Housing Act (S. 1320). The House passed companion legislation (H.R. 5019) in May. This would help replace older mobile homes, – i.e., those factory-constructed houses built prior to the passage of the HUD Code for manufactured housing went into effect on June 15, 1976 – with new Energy-Star-qualified homes. This helps the most poor and elderly.
6. MHCC and HUD. MHARR has expressed grave concerns that the intent of Congress in creating the Manufactured Housing Consensus Committee (MHCC) is being neutralized by HUD. I’ve personally spoken with members of the MHCC, who echo MHARR‘s Danny Ghorbani’s concerns. If regulators are allowed to push forward any regulation without an effective voice for consumers and manufacturers, then regulators – no matter how well intentioned – can de facto wreck havoc on the Industry they regulate. HUD should have a clarification of the intent of Congress in passing the MHIA of 2000, which clearly spells out the fact that HUD must go through the MHCC process and can’t impose its will outside of and apart from expressed approval the MHCC process. Some regulatory issues now pending, include:

• RE: RIN 2502-A172 Manufactured Home Construction and Safety Standards, Test Procedures for Roof Trusses
• Docket Number FR-5295-P-01; RIN 2502-A183 On-Site Completion of Construction of Factory Built Manufactured Homes.

1. It should be noted that the intent of Congress was to make manufactured housing performance based, as opposed to a proscriptive code. This would allow for technological advances to move the Industry ahead, control material waste and costs and give the best possible product to the consumer. The MHCC process was supposed to foster that, but as noted, a discussion with a number of MHCC members indicates that HUD is now trying to effectively over-ride/neutralize the Committee, contrary to the intent of Congress in passing the MHIA of 2000. Let’s not hamstring American ingenuity.  A letter to HUD on this issue from your office would be helpful.
2. Federal Pre-emption of HUD Code Manufactured Homes. Pre-emption simply means that the federal HUD Code pre-empts local building codes. This was a marvelous idea that dated back to the original passage of the HUD Code by Congress back in 1974. Pre-emption – in theory – simplified and reduced those costs for construction that were mostly regulatory in nature. I say ‘in theory,’ because practically speaking, local jurisdictions often ignore pre-emption! Nor does HUD often impose its authority in those cases where pre-emption is ignored. Let me give another analogy to make this point. If the FBI shows up at a crime scene and asserts federal jurisdiction, the local law enforcement agencies have to stand aside. The same should be true with the HUD Code for Manufactured Housing! Local jurisdictions don’t attempt to over-ride HUD on fair housing laws, why does HUD allow it with respect Manufactured Housing? A letter to HUD asking them to enforce federal pre-emption may set the stage for more vigorous action by HUD when state or local jurisdictions ignore federal law regarding manufactured housing placements and related regulatory issues. The widespread use of the HUD Code could and would flourish if pre-emption and the points made above would be enforced.

MYTHS

There are many myths about manufactured housing that we have tackled in various “Industry in Focus Reports” by our Eric Miller.

• http://www.mhmarketingsalesmanagement.com/industry-news/industry-in-focus/723-hurricane-risk-prove-manufactured-housing-safer-bet

• http://www.mhmarketingsalesmanagement.com/industry-news/industry-in-focus/696-tornado-caused-more-destruction-to-conventional-construction-than-to-mobile-or-manufactured-homes

• http://www.mhmarketingsalesmanagement.com/industry-news/industry-in-focus/739-insurer-study-on-manufactured-homeowners-provides-insights

These require a free sign up and login, which is linked below:

http://www.mhmarketingsalesmanagement.com/user-registration

The point is that today’s manufactured homes are not yesteryear’s ‘mobile homes.’  They should no longer be treated as mobile homes, they should be treated on par with conventional housing!  America needs this industry, and you and Congress have an opportunity to support a jobs creation simply be supporting the items noted herein.

SUMMARY

I could summarize the news stories above by saying that insurance, university, government and other studies prove that today’s manufactured housing is stronger, smarter, safer, stylish and offers major savings. Today’s Manufactured Housing (as opposed to pre-HUD Code mobile homes, those houses built in factories prior to June 15, 1976, when the HUD Code for Manufactured Housing took effect) is in many ways superior to conventional construction. It is greener than conventional building can be. Size for size, manufactured homes are more energy efficient and less costly to maintain. Manufactured homes create jobs, and offers affordable housing to millions of Americans.

To show the potential appeal for today’s manufactured homes, you can visit our photo gallery at:

http://www.mhmarketingsalesmanagement.com/photo-gallery

The point is this. The Industry has lost dozens of manufacturing facilities. It has seen what once were its two largest HUD Code manufactured housing builders go into bankruptcy, along with many smaller manufacturers that have vanished. Had Congressional legislation been properly implemented, much of this could have been avoided.

In our July 2010 interview with Congressman Walter Jones (R-NC), he stated to us that

1. Congress can issue letters to regulators.
2. It can hold hearings.
3. As needed, it can pass legislation.

There are some items that need a vote or co-sponsorship of legislation that is ending. At the very least, House or Senate Members can send a letter saying, ‘What gives?”

We need some of each of these actions – from you, please.

Twenty million Americans who live in manufactured housing or pre-HUD Code mobile homes and the 500,000+ jobs the Industry represents are counting on your support. Please let your voice be heard and take action on any of the points outlined above.

Write your Congressman

Write your Senator

Thank you.

Respectfully,

L. A. ‘Tony’ Kovach

Publisher, http://www.MHMSM.com

tony@MHMSM.com

847-730-3692

Some inter-related topics today…

1

“Elephant in the room” is an English idiom for an obvious truth that is being ignored or goes unaddressed. The idiomatic expression also applies to an obvious problem or risk no one wants to discuss. See http://en.wikipedia.org/wiki/Elephant_in_the_room

If you have any connection professionally with Manufactured Housing, these Elephants in the Room impact your business and your firm’s bottom line.

A number of public comments have already been posted on the subject of Elephants in the Room, here at my previous Masthead blog post – see link below – and at the MHC Group on LinkedIn. Even more comments have come in privately, via phone or messaging. The original Elephants in the Room post is linked here.

The response has been strongly in favor of the importance of the topic.

That said, for accuracy and balance, I need to mention that one executive I respect cautioned me not to appear to be ‘stirring the pot’ on this issue. I assured him that is not our goal, that the original post stated quite the opposite: I am not criticizing anyone, simply raising a topic of general interest and concern.

What I failed to mention then, but will hasten to add now, is that we at MHMSM.com have declined stories that I felt would serve no purpose to the Industry or would simply embarrass someone. We are not muckrakers or a tabloid.

Our mission at MHMSM.com is to be pro-industry, period.

Being pro-industry means we want to see the Industry move ahead and grow. So at times, that means we will look at what may be seen by some as tough or sensitive subjects. We will invite feedback on ways we can deal with those challenges.

Financing is critical for our future, and so we all need to be objective about this subject.

Public comments can be seen on LinkedIn or posted on the blog above. A sampling of the private-to-me, and no-names-mentioned comments include:

• One manufactured housing lender who said that this very issue has been a trouble spot for their operation and kept it from growing. He thanked me for bringing it up for discussion.
• A chattel lender who suggested this is a key topic, one that needs to be addressed for the benefit of the industry and its customers. This gent was keen on hearing about the repo resale experiences discussed in my first post on the topic, linked above.
• I was also told that VMF and 21st would very much like to see this successfully addressed. No one ‘wants’ to wholesale so long as they have a better option. They have a significant stake in the game, and performance for them helps everyone in MH lending, directly or indirectly.
• A chattel finance exec shared an example of a specific repo reseller he knew that he asserts had 85%-90% recovery rates on repo’d manufactured home loan balances. Compared to the losses on homes being wholesaled, that was interesting and positive news!
• That person also noted that a savvy LLC operator who does self-financing should be able to recover 100% of their money on the outstanding loan balance at the time of repossession.
• More than one lender expressed interest in my prior experiences reselling/re-marketing manufactured home repossessions, which was mentioned in the post above. Time will tell where such discussions may go.
• Other comments have come from retailers (including a multi-location retail operator), some from community pros, and others involved in the Industry at various levels.

Based on this sampling, one may surmise the importance of this subject to the manufactured housing Industry, its lenders and customers.

Please read or re-read the post linked above; understand, discuss and share your views, concerns, comments and most important, your thoughts on solutions. The future of our Industry grows brighter once the pachyderms in the parlor are shown their way out.

Teeing up on INR

2.

George F. Allen has suggested that he will use the time previously slotted for the now scrubbed MHARR and MHI discussion at Phoenix during the upcoming International Networking Roundtable Sept 15-17, 2010 for an open forum on industry issues instead. Based on the initial feedback noted above in the need to improve the exit strategies for lenders and customers, this may be considered as a topic worthy of discussion at INR.

3.

Topic three, all inter-related: Enhanced Marketing, industry image building and increased sales.

Do you want to achieve record results for your operation? Do you want to grow you sales through increased marketing? Do you believe that there ‘ought to be a way’ for the industry to enhance the image and acceptance of manufactured housing?

Then come to INR in Phoenix. Listen to what Joe Adams has to say on this subject, I know I plan to hear his thoughts! Then, toss a coin and decide if you will sit in on my friend, Don Westphal’s important topic of the community series homes, or if you will sit in on my talk on how to generate 150 new calls a week at a single location. I wish I could hear Don’s presentation, but I can’t do two different things in two different rooms at the same time.

There is plenty of star power lined up for Phoenix, starting with Randy Rowe – of Greene Courte Partners fame, State of the Asset Class address, other top presenters, round table discussions and networking/deal making opportunities. Contact George F. Allen at Phone (317) 346-7156; FAX: 346-7158 or email: gfa7156@aol.com to reserve your spot. 200 max attendance. GFA tells me he is nearing the mark! # #

L.A. ‘Tony’ Kovach, MHM – publisher, editor and The Masthead blogger at
Manufactured Home Marketing Sales Management trade journal at
www.MHMarketingSalesManagement.com aka www.MHMSM.com
tony@mhmsm.com
847-730-3692

And remember! Tony also does contract marketing and coaching for industry clients. Marketing that doesn’t ‘cost;’ it pays off on your bottom line. Enough said! # #

Warning: This blog post is not for the faint of heart or for those who think they can skim and get it all.  As an Industry Pro, directly or indirectly, this impacts YOU every day.

In a recent conversation with George F. Allen, I mentioned a discussion topic that Finmark’s Dick Ernst and I shared in preparation for our INdustry in Focus interview with Dick about manufactured home financing.  During that conversation, Mr. Ernst used the memorable phrase, “elephants in the room.” Specifically, we spoke about the challenges that lenders and home owners face when resale time comes.  “That’s the elephant in the room, Tony, that we as an industry need to deal with.” was the gist of Dick’s revealing statement.

The president of a manufactured housing finance company and the senior VP of yet another lender I’ve recently spoken with concur.

As George and I spoke, he commented on the customer or secondary (resale) market side with, “I was going to say, you’re right, that is the second elephant in the room.  This is an important topic, Tony. Maybe you should consider doing a Linkedin or blog post on it.” GFA being correct, I agreed.  As a result of that advice, a lively Linkedin MHC group discussion has begun…

So here I am suggesting to an Industry pro like yourself that we need to take a long, hard look at how to change this avoidable and troubling dynamic.  We need a process that allows an MH customer or finance company to exit at least as easily from their manufactured home asset as someone might from a conventional stick built house.

Why?

Because as long as we have elephants in the room, those pachyderms will be pushing out of the room customers, investors, lenders, public officials and a whole host of opportunities that we otherwise would deserve!  We can be:

• Selling more homes.
• Have happier manufactured home owners.
• Get more MH referrals.
• Enjoy more, better, happier…these are some of the rewards for solving the ‘problem pachyderms’ issue!

The bottom line is you can make more money long term, and so can the Industry, once we face and fix this plaguing problem.

Yet some – perhaps many – who will read this may knee jerk in opposition.  Why?

Let’s take a look…

VMF and 21st stated in the MHI Summer Meeting with FHA officials that when they take in a repossession, they wholesale that repo 65% of the time.  Other lenders in the room were nodding or made sounds that indicated that Berkshire Hathaway affiliates are not alone.  Now they may make this ‘work,’ but at what cost? Higher rates on manufactured homes than conventional housing are certainly among the sad consequences.

Less lending availability is another avoidable consequence!

Why has the FHA set such a high bar on finance companies who will be doing FHA Title I loans?  Because of past industry losses in financing.

Why do the GSEs hesitate to lend on MH chattel, in spite of the Duty to Serve mandate from Congress?  Because of past industry losses in financing.

Why are so many MH communities doing in house financing?  To the tune of billions of dollars?  Because it is almost a necessity, due to past industry losses in financing.

Why does Ken Rishel and company teach community operators and retailers how to raise the capital and do legally compliant ‘captive chattel financing?’  Because there aren’t enough MH chattel lenders available without doing it in house.  I’d bet that Ken would also ad that because doing it in house is a profit center of it’s own…when it is done right!

Now, please don’t shoot the messenger for reporting what you already know.

The only way to deal with the elephant in the room that no one wants to touch is to look closely at the various dynamics and then do what it takes. If we as a manufactured housing professional, company or as an Industry want to climb out of the Industry’s financing limiting doldrums, we better deal with the issues head on!

When a MHIndustry lender is wholesaling off repo inventory 2 times out of 3, that means that some out there are ‘getting a good deal.’  But the ‘good deal’ to a community, retailer or wholesaler means a lender took a beating.  When the lender takes enough beatings, they may say, ENOUGH!  That leads to the skittish behavior of FHA and The GSEs on this subject.  Those losses on repos cause other financial institutions and potential lenders to look warily at the manufactured housing product, because Conseco/Greentree is not ancient history to them.

Now please don’t misread this.

For example, the government agencies have Congressional mandates.  They should serve manufactured housing as the law requires, period, end of story!  In my world and yours, if Congress passes a law, we obey. If you don’t like it, you work to change it. But if you and I simply fail to obey a law, then we get fined, prosecuted, jailed, or strung up.  I say, the GSEs and FHA should do as Congress mandated.  They should do so broadly, rapidly and effectively.   These agencies should find the solution to the elephants in the room issue as part of the implementation of the legislation that Congress created and the president signed into law.

This means that the FHA and the GSEs should find a way to make the programs sustainable and work long term.

We in the Industry, if we are smart, should help them.

That is what MHI and those Industry leaders were trying to do in DC a few weeks ago, trying to shed light with Vicki Bott and other FHA and HUD officials on ways to make their program work.  Because a sustainable program is a win for everyone!

But let’s go back to those who can’t resist doing that wholesale deal on a repo.

And let’s go back to those lenders who shed their inventory at bargain basement rates.

Knowingly or not, each are contributing to the long term history in the financing/resale realm that has plagued our Industry, those elephants in the room.

Before writing this, I also spoke with a wholesale repo buyer, who effectively said:

“If they are going to sell me a home at these prices, why would I say no?”

I admit, that has to be tempting.  But a number of points come up in analyzing this long term, and you can think of them as well or better than I.

Now, please note, the wholesale buyer has learned how to move that inventory.  So why can’t the lender do the same?

I spoke with a long term MH lender, who effectively said:

“I have x homes and x millions tied up in inventory in just the x market.  The regulators are checking our files right now.  We want to continue to do MH lending.  But every time a ‘park’ (his term) bills me for lot rent, every time a park fails to help resell a home at retail, every time a home sits and sits instead of resells for a good price, every time I have to move a home in order to get it sold, it puts that much more pressure on our manufactured home financing program.”

Do we need to lose another lender(s) before we learn our lesson?  Hello?  If we are the ‘survivors’ of the Great MH Lending Meltdown that started around the turn of the century, who needs coffee?

Now all of these are actual or paraphrased comments from real people who didn’t ask to be named for obvious reasons, and each one is revealing.

To the future potential of the MHIndustry, these viewpoints and their implications are chilling.

Let’s imagine for a moment, that FHFA, in the aftermath of the tidal wave of comments they received last month, relented.  Let’s say they put a program in place that really met the intent of Congress in the Duty to Serve legislative provisions.  Let’s further imagine that FHA modified their threshold for Title I lenders, lowering the amount and making more capital thereby available to the Industry.

Then let’s image that nothing has changed about the resale/remarketing issue.  What would eventually happen?

They’d take their lumps for a while, then go back to Congress and understandably say, “we told you so!”

So now ladies and gents, we better tackle this once and for all.  We should not only work on Congress and these agencies to get the financing we need, but also work with them to make sure that repos don’t result in big losses.

That is just long term, common sense.

That said, one gent told me recently that in our Industry long term may be 10 minutes to 10 days.  “I’ve got the end of the month coming up, and have to get this deal done!”  Oye, vez.  We have to think 10 weeks, 10 months and 10 years ahead too.  A dozen years have gone by since we sank from nearly 373,000 shipments to under 50,000 last year.  We are inching up this year, and that is good.  It reminds us that we can grow again.  But if we don’t buckle down and do ALL that it takes, we will have a shorter and shallower bubble than we had in the roaring 90s.

Or, we can have the best years the Industry has ever had.  The choice is in our hands.

Let us shift gears and briefly look at an example that may lead to a solution.

Back in the late 80s (and again in the early 2000s), I was in a leadership role of  a successful resale programs for various manufactured housing lenders.  We:

• set up a structured approach that reduced their losses, accelerated their resale time line and got assets back on the books at prices that were close to new ‘repo fighter’ home prices then.
• There were legal and systemic limits that kept us from selling repos for even more, but I am here to say, we could have sold those homes for more money had the financing system allowed for it.
• We didn’t buy repos ourselves, meaning we didn’t compete against the lenders repos with our own inventory, as to me that seemed like a conflict of interest.
• Our team did repo sales for lenders, period!  We got paid commissions, and we earned a lot of those.  We also received got paid some spiffs and other incentives, all above board, that were part of our agreement.
• We looked at issues and we dealt with them in the best fashion possible to control costs for lenders and limit their losses.

Late 80s MH Industry Article collage, recounted results helping lenders save money on repos.

It wasn’t perfect, but it worked a lot better for those MH lender clients than they had elsewhere in that state.  We know this because they said so, and backed it up by bringing us ever increasing levels of inventory, and then asked us to expand into different markets in other states.

Foremost Insurance Kudos Letter to our Repo Retail Center

That was then.  Maybe there are similar efforts out there now, but:

• where are they now?
• If they are out there, why are key MHIndustry lenders still wholesaling 65% of the time?
• If they aren’t out there, why aren’t MHIndustry lenders creating a program that works for all long term?

Ladies and gents, this isn’t rocket science. This is about discipline, solution orientation and will power.  Other industries face this issue and make it work.

We…

Can…

Too!

I don’t quote sources unless they wish or agree to be quoted or have spoken in public.  So  privately to me or via posted comments, I am hereby inviting industry members to comment on the elephants in the room.

Please share your experiences and viewpoints.  Please agree or disagree.

Heck, let’s have a debate here if you want to, that is what posted comments are for too.

We as MH professionals, companies and as an Industry have to move the resale/re-marketing subject ahead.

We don’t need endless meetings and another task force that later disbands, for whatever reasons.  I am not criticizing anyone, but I am challenging every stake holder to think this through and resolve it for the long term benefit of all involved.

Some MHCommunity operators do a good job at this.  If they can, others can too.

How do you solve a big problem?  You face it squarely and deal with it honestly.

How do you eat an elephant?  One proverbial bite at a time. # #

_________

End Note:

A few The Masthead blog posts ago, I touched on this topic lightly.  It was part of the broader subject of what are our Industry’s strengths and weaknesses are.  That post referenced how we could be doing 200,000 to 800,000+ new annual manufactured home shipments a year!  Not someday, right now. If you missed that prior post due to vacations or whatever, you might want to read or re-read it.

I was thinking back to the repo glut of the late 90′s and early 2000′s.

• Do we miss selling 372,000+ homes a year?
• Do we miss having full communities?
• Do we miss building new MHCs or fee simple developments?
• Do we want factories that are at or near capacity?
• Do we miss having more retailers?
• Do we miss more lenders, vendors…

Please read, or re-read this blog post linked below.  It outlines the path for MHIndustry  business growth today.

http://www.mhmarketingsalesmanagement.com/blogs/tonykovach/manufactured-housing-industry-growth-potential/ # #

_________

L.A. ‘Tony’ Kovach, MHM

Publisher, MH Marketer and The Masthead blogger

Manufactured Home Marketing Sales Management trade journal at www.MHMarketingSalesManagement.com aka www.MHMSM.com

tony@mhmsm.com

847-730-3692

Another New Record! 30,300 readers here in July 2010 know what’s right! That’s 3700+…

…more readers than July.

We have THE MOST:

• top-featured writers,
• industry news including exclusive PODCASTS of NEWS AT NOON–fast, insightful business and market reports you can benefit from every biz day. Sign up now free and enjoy.
• Plus exclusive INdustry in Focus Reports.

More great features…read all about it below.

All across the country schools and businesses are closed for vacation, while state legislatures are adjourning and federal government offices are taking a recess – BUT here in the Manufactured Housing Industry, we completed one Call to Action…

• By August 5: LET’S GO GREEN! YOUR assistance was needed to support MHI’s call to ensure that the Senate Energy and Natural Resources Committee favorably reports the Energy Efficient Manufactured Housing Act (S. 1320) sponsored by Sen. Jon Tester (D-MT).

…and THERE ARE STILL TWO TO GO:

• By August 23: LET’S EXPAND EXISTING MARKETS AND OPEN NEW ONES! YOUR assistance is needed to support the On-Site Completion of Construction of Manufactured Homes published by HUD on June 23, 2010, with key clarifications and modification proposed by MHARR.
• By September 30: LET’S UTILIZE SOME AVAILABLE MONEY for Retailers! YOUR assistance is needed to contact members of Congress and ask them to support the Dealer Floor Plan Program Extension and Improvement Act of 2010. This can benefit retailers, communities and manufacturing.

THE MORE WHO RESPOND, THE GREATER OUR IMPACT WILL BE!

The Revolution Spreads! Here’s the action one company is taking. Because the Home Idea Factory and Lifestylist® Suzanne Felber (www.LifeStylist.com) are committed to the growth and success of our industry, they took action to send out this message to their readers:

“I got the best gift in the mail the other day – a copy of The Manufactured Housing Revolution – a new book that was edited by L.A. ‘Tony’ Kovach. It was really exciting to see the article I wrote, “I Only Decorate Houses I Want To Sell,” was included in the book and we had a quote on the back cover! Tony really has been helping spread the word about why factory built housing is the preferred form of construction on his www.mhmsm.com site, and putting some of the better articles from his site in book form was a great idea. You can get a copy of this at:
http://www.manufacturedhousingrevolution.com.”

You are either going to catch this wave or miss it. Show YOUR commitment! Get copies for yourself and your organization today, and join the Revolution! Spread the word!

Note: this book is also reviewed in George F. Allen’s Feature Article in this issue (see below).

Be sure to tune in to Erin Patla’s redesigned Podcasts of the Factory-built Housing News at Noon–including Industry–specific Markets news-and well as Podcasts of our outstanding Featured Articles; Eric Miller’s ground-breaking, exclusive INdustry in Focus Reports, and your favorite industry experts and related pros who return to bring you this month’s new Featured Articles. The accent is on more green – in financing, income and energy-efficient products and practices.

Featured Articles
and Reports for August 2010

Once again, we bring you “All the Best:” Top-Talent professionals from A for Adams to Z for Ziglar! Let’s get started with your big August line up…

Joe Adams – Marketing
• A Journey in Successful Marketing: Identifying and Correcting Ten MH Marketing Mistakes. If you think the role of marketing is to make sales – wrong. Think again.

George Allen – MH Housing Book Reviews
• New Manufactured Housing Book Reviews! Are you the first or the last to know about these must-reads?

Chad Carr – Management
• Pillar Four-Getting the Numbers Right. Do you know the ten steps you need to take to make sure you know exactly how much money you have and where it is to sustain profitable operations?

Tim Connor – Management
• Empowering Employees. Will empowering employees improve performance and increase organizational effectiveness or create stress and havoc?

Tim Connor – Sales
• Common Sales Myths. Do you know the five “truths” that actually sabotage your MH sales success?

Nadeen Green – Legal, Fair Housing
• Fair Housing Is Not All Black and White. How can iguanas, “hellos” and food stamps put your MH community at risk?

Mike Hourigan – MH Business Practice
• When you think about it: A novel approach. Are you “flying the plane” of your MH business or crashing it?

Susan Knowles – MH Community Service Provider Resources
• Why Settle? Exploring your MH community’s service provider options. Feel like there is just something missing from your relationship with the cable company?

L.A. ‘Tony’ Kovach – MH Industry Reporting
• Builders of Mods and HUDs-Can They Get Along? Yes or no? Build up the industry or tear it down. Choose your future.

Stephen Lefler – Energy-efficient MH homes and appliances
• Plunge into the “Green” Pool. How can the manufacturing and modular home building industry surpass the conventional home builders during this economic window of opportunity in the house construction business?

Greg McClanahan – Soft Skills and Personal Development
• Everything You Do Matters. How do butterflies affect the future of the Manufactured Housing Industry?

Eric Miller – MH Industry Reporting
• Fleetwood Enterprises Liquidates, Products Live On. Is the MH Industry giant totally gone?

Eric Miller – MH Industry Reporting
• Legacy Housing, LTD Aims at Quality, Affordable Homes Sold by Independent Retailers. “This will make you proud to be an American when you see how everything comes together.”

George Porter – MH Historical Perspective
• Vanishing Americana. Are you aware of the colorful origins of the MH industry and the families that disappeared when the early homes did?

Kenneth Rishel – MH Industry Finance Commentary
• Credit Matrixes can be a Plan for Success or a Plan for Failure. What kind of credit matrix can create sustainability?

Dave Shanklin – MH Industry Financing
• California Expects More Banks to Provide Loans for Manufactured Homes in Communities. Is there evidence of new stability for the MH chattel finance industry?

Bob Stovall – Online Marketing
• Online Marketing 1-2-3, Part 2 – eMail Marketing. Knowing the “do’s and don’t's” of email marketing can make or break your business.

Don Westphal – MH Community Planning
• Going Green? Green is good – financially and ecologically.

Zig Ziglar – Motivation & Inspiration
• Zig on… Problems vs. Opportunities. What can you learn from boxing-great Gene Tunney?

If you want to grow your results, stay informed and get ahead, make us your top stop online every work day, or catch up on weekends like thousands already do!

The Honorable Congressman Joe Donnelly can certainly be described as a friend to the manufactured housing industry. As just some of the evidence for this, consider the following:

• Two months ago, Donnelly (D-IN), put forward the Manufactured Housing Week resolution in Congress:
• On June 2, 2010, Congressman Donnelly hosted the manufactured housing finance summit in Elkhart, IN. This lead to a productive FHA finance meeting during the recent MHI Summer meeting, extensively noted here and in our exclusive Dick Ernst MHIndustry finance Interview.
• More recently, Donnelly is working for legislation to make floor plan financing more readily available for manufactured home retailers, as reported by our MHMSM.com INdustry in Focus Reporter Eric Miller.

It is also a fact that Donnelly has also supported Obama Administration initiatives, such as the massive health care bill that millions of Americans opposed, but was signed into law despite a strong and still growing opposition due to economic and other concerns.

So it is with some interest that we view Congressman Donnelly’s recently-launched TV ad, which touts his support of legislation strengthening U.S. Border security, and specifically distances himself from President Barack Obama and House Speaker Nancy Pelosi:

This later issue doesn’t impact manufactured, modular or prefab housing directly. But we are all Americans, and what happens to our great nation impacts our Industry as well. Immigration, economic, regulatory and financing policies impact us as individuals, and thus our businesses and our Industry.

Against this backdrop, MHI PAC and Industry members are gearing up for this upcoming mid-term election campaign season.

We need to carefully consider the records, votes, positions and actions of Congressman, Senators and others as it relates to our Industry. We need to consider what the records of Industry friendly Congressman, such as Joe Donnelly, and consider carefully their opponents and who we will support with our energy, time and treasure.

The manufactured housing Industry is facing a series of defining moments. Our new MHMSM.com issue goes online this week. In this August issue, there is an article that will deal with that potential. That article and an upcoming The Masthead blog post that will follow it, reveals:

• We have the opportunity to grow and earn more than ever before in our Industry’s history.
• We could grow our Industry’s new home sales 400% to 1600% in 12 months, by following common sense and doable steps.
• We have to be willing to do what it takes to tap that potential, to improve and grow like never before!

Sound business and political actions are needed to achieve our potential. I know how challenging it can be to keep up with all that is going on, but we have no choice if we desire to move ahead. Tune out or turn down distracting background noise, get and stay focused. It is the only way to succeed.

Day by day, let us stay informed and then do what it takes to achieve the potential our great Industry offers each committed member! Some will fail. Don’t be among them. Do what it takes, and you will soon see a day that today you might only dream about. # #

L.A. ‘Tony’ Kovach, MHM – editor and The Masthead blogger at
Manufactured Home Marketing Sales Management online trade journal at
www.MHMarketingSalesManagement.com aka www.MHMSM.com
tony@mhmsm.com
847-730-3692