Wrap up Report on the IMHA 2011 Power Symposium for Manufactured Home Community Operators

by L. A. 'Tony' Kovach

"Knowledge" is Power. Develop more strength to deal with our tough economy at the 2011 Power Symposium. It's a full day of marketing ideas, regulatory education, legal answers and financing options — all ways to help you make and keep more money in this continually changing industry.” - Mark Bowersox, Executive Director, Indiana Manufactured Housing Association (IMHA).

With the above introduction, Mark and his fellow IMHA staff members attracted some 60 land lease community owners and interested manufactured housing pros to their October 2011 Power Symposium.  Moderated by George F. Allen, the Symposium focused on practical answers to real world problems today. 

Let's take a look at what made this a successful event, by recapping some of the speaker's topics and take aways.

After breakfast, welcome and introductions, the meeting began with "Attracting Credit Worthy Customers.”  We will circle back to this topic later.

Next, Indy Mac McClanahan and Mark Wisely presented on the topic "How to Increase the Value of Your Community and Prepare it for Sale.”  The sequence of the topics above were like book ends on a shelf!  Mac and Mark focused on such key value builders as:

They dealt with why the 'cash cow' days of manufactured housing community ownership were over, but how to make today's market realities work for the community owner, especially those wishing to prepare their community for resale or refinancing.

One of my favorite take aways from their presentation was near the close, where Mac contrasted above and below the line attitudes in business operations. 

Ownership

Accountability and

Responsibility vs.

--------------------------------------   

Blame

Excuses and

Denial

Personal Property Financing (also known as — a.k.a - chattel financing or 'home only' financing was a panel discussion featuring Dick Ernst, Financial Marketing Associates / San Antonio Credit Union (SACU is the parent company to CU Factory Built Lending), Carl Becker, Newton Becker Bouwkamp Pendowski; Eric Oaks, Oxford Bank & Trust; Ken Rishel, Rishel Consulting.

The lenders presented their firm's respective programs that are geared toward 'in house' or captive finance operations.  To over-simplify, Dick Ernst explained how SACU's program was a simple way to enter or stay in the captive finance business easier, by taking most of the risk and pain out of opening or starting a program for community operators to use to sell and finance new or used homes in a fashion that is SAFE Act and other laws legally compliant.  Ken Rishel, by contrast, explained how their more involved program teaches community operators to learn how to open or run a 'related' or captive finance operation that is legally compliant, and that properly run, will generate profits for a community operator.  Attorney Carl Becker provided insights on rent to own, its risks and rewards.  

While everyone on the panel brought insights and value to attendees, here, I have to commend Eric Oaks from Oxford Bank and Trust.  Eric began by saying that he wasn't presenting to draw customers, he was there to share insights and values as an IMHA member to IMHA members.  Eric went on to explain that while many find the flurry of legal issues to be scary, he wanted to reassure attendees that the 'game was still the same.'  To paraphrase, 'Think of manufactured home community operations today like a football game.  It is still the same game.  We just have some new rules we must play by, and we can still play to win.' 

This is a message that needs to ring out well beyond Indiana's borders!  Too many are too scared to try to do the steps necessary to address the problems that face our industry.  Eric's message was simple and thus powerfully motivating.  We have real challenges in these new rules.  But learn them, use a program that makes sense for your manufactured home land lease community and then put it to work to fill sites and make money.  

By being legally compliant, there was nothing to fear.

It should be noted that Oxford recently earned regional recognition as having 95% customer satisfaction among banks, quite an accomplishment indeed.  

The final segment was Ask the Attorney, with Carl Becker, Newton, Becker, Bouwkamp and Pendowski law firm.  The discussion and Q&A included topics such as: "How can I legally evict an undesirable resident?” "What is the process to obtain title to an abandoned home?” "What restrictions are there on rent increases?” and many more.  

Let me underscore the value of association membership with this segment, or any of the others named in this column.  The cost for having such questions answered by an attorney working for your community directly would be more than the cost of a year's membership!  Let me rephrase that this way, you will SAVE money and can avoid legal hassles by being an active member of your state association.  Your membership gets you access to such meetings at a discount, plus gives you lobbying power that would cost you far more to do on your own.

Each of the above was well received and the post presentation discussions I heard indicated satisfaction with the meeting and information learned and shared. 

Finally, let us take a brief look at my presentation topic,"Attracting Credit Worthy Customers.” 

This was the first time to do this particular topic for an association group, and the reception was a good one. The talk dove-tailed with the others that were on the agenda in numerous ways, as this recap and example that follows will demonstrate. 

Why do we do self finance or rent to own at all?

In my personal view, while I believe in no doubt importance for having a captive finance (or rent to own, lease to own, etc.) operation in manufactured housing communities today, too many have missed the boat on what we as an industry must learn how to do better.  In April at MHI's annual Congress in Las Vegas, the attendees there and I heard a panel of lenders say words to this effect: there is no shortage of chattel (home only) lending capacity for manufactured home buyers with good credit, income and a realistic down payment.

Let's repeat that, there is NO SHORTAGE OF PERSONAL PROPERTY FINANCING for customers with good credit!

We hear way too often that what keeps our industry in the toilet in shipment numbers, occupancy, etc. is a 'lack of financing.' While I understand the statement, it isn't accurate.  We have financing for good credit customers, but for those with sub-600 credit scores, you are going to have to finance those yourself, perhaps using a program such as Rishel's or San Antonio Credit Union's.  

As this article linked here proves, most of the U.S. has good credit that would qualify for our manufactured housing loans!

What our objective should be is to attract those customers to our sales centers (in community or boulevard style manufactured home retailers).   After years of working in communities and at 'street retail centers,' I've learned first hand that virtually ANY location can rapidly improve the quality and volume of its good credit customers.  

Attracting good credit customers, who can either pay cash or get third party financing takes planning and good execution.

That plan, along with real world examples of how it has increased sales and occupancy, was shared with dozen's of attendees who saw its value, and responded appropriately. 

Let me thank and commend the IMHA's members for having me cover and present at their event.  Hats off to Mark Bowersox and to all who presented made the event a success for those who came.  # #