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by Shawn P. Mullins

Shawn Mullins photoEvery so often I am reminded of the story of the monkey who reaches into a jar for a shiny object. The monkey picks up this object and in doing so makes a fist with his hand. The only problem is that the monkey cannot get his hand out of the jar when making a fist. Now in the mind of the monkey, the only solution to the problem is to let go of the shiny object and thereby forfeit his reward in exchange for getting his hand out of the jar. Although there is a better solution – turn the jar over and let the shiny object fall out – all he knows is that the shiny object is in his hand and he isn't going to let go of it, regardless of what other options exist. In the end, he gets neither his desired reward, nor any lessons learned.

So it is with this concept in mind that I wonder, are we perhaps forcing our buyers into a similar mindset and no-win scenario? Most buyers have a budget for what to spend on their home and this budget is partly a result of what they can qualify for on the loan. Sounds like a reasonable enough scenario. Where it gets difficult however, is when the buyer's list of options exceeds their qualification criteria. The result is a buyer who feels forced to choose between the flash, bells and whistles of granite countertops, tile floor or other décor amenities vs. nuts and bolts options such as 2x6 walls, higher grade insulation, better windows, high efficiency HVAC, etc.

Our reality is that most customers, when they can't see, touch, feel and become visually aroused over a product, are much more willing to exchange that product for one that does excite them visually. It is this mentality that creates scenarios where customers buy inferior performing products simply on the bases of the flash and sparkle these products display on the outside. As a retailer, are you so anxious to get the contract signed that you miss the opportunities to show your customer how they can have both the flash and the substance? Consider yourselves for a minute. If I were to show you how you could buy a $100,000 home with the exact same down payment, loan ratio qualifications and net PITI + operating expenses as say a $90,000 home, wouldn't you want to know how? Wouldn't you want to take advantage of what that extra $10,000 could buy you in upgrades?

This is possible through an instrument commonly referred to as an Energy Mortgage (http://www.resnet.us/mortgages). There are basically two types of Energy Mortgages, Energy Efficiency Mortgage (EEM) for new construction and Energy Improvement Mortgage (EIM) for existing properties needing energy efficiency upgrades. Most major lending and underwriting institutions offer these types of mortgages, including: HUD, VA, Freddie Mac and Fannie Mae. These mortgages take advantage of a process that does the following:

  1. Isolates energy efficiency features that are above minimum current code.
  2. Models a home's energy use with and without these features.
  3. Quantifies the dollar value in terms of energy/utility dollars (per geographic region) of having or not having these energy efficiency features installed.
  4. Certifies that the cost to install such energy efficient upgrades, including interest and the time value of money is less than the annual and monthly net savings to a homeowner in their energy bills.

Because of this detailed process and third-party certification, lenders offering EEMs and EIMs will waive the effect of any additional down payment or qualifying ratio that would normally be imposed by adding these options into the price of a home. Therefore, while it is true that a homeowner's monthly payment will increase because of the higher principal balance, their total house payment plus energy use costs will be equal to or less than if they had not installed the energy upgrades. In my experience, it is almost always a "less than" scenario, which means the buyer is actually making money on the deal.

Part of the qualification process does involve a third-party HERS rater (Home Efficiency Rating Systems rater) in order to qualify the improvements. Depending on your region, the size of the home and how competitive your market is, the cost for this rating will typically fall between $300 and $600. I would expect most manufactured housing product ratings would easily fall below the $500 mark. This is especially true if you can develop a relationship with a particular HERS rater and thereby get some preferred pricing. It is important to know that the cost for the HERS rating can also be rolled into the mortgage. Being a HERS rater myself and having worked with several such EIM transactions, I can tell you that they are a very under-utilized product. Most people aren't even aware of them. Once they see how easy it can be to "have their cake and eat it, too," they are easy converts.

From a practical perspective, I see these loans as a significant retail opportunity. There is no reason that a retailer could not take any new home, of any specification and any price point and separate out the basic home from the upgraded home. With this approach, the retailer now has the tiered pricing and options necessary for the HERS rater to model the energy efficient upgrades. Over time you may very well find a model of home that sells well and consistently qualifies for the EEM with a given set of upgrades. Now how easy would that be to turn?

So the next time a potential buyer walks into your store, you can hold back these costs from their loan pre-approval amount and let the buyer spend this money on granite countertops, wood floors, upgraded lighting, furniture packages or even just to upgrade to a bigger home. The 2x6 walls, upgraded insulation, upgraded HVAC, upgraded Energy Star appliances, etc. are now tacked on top of everything else in a sort of VIP package.

I'm sure any other HERS raters out there will be quick to point out that what I have described herein is a very simplified perspective of the process. That is exactly the point. From a consumer or retailer point of view, this is not all that cumbersome. The rating itself is a technical and involved process, but that is specifically what the rater is getting paid for. A good rater will know what is a reasonable cost for a specific energy efficiency upgrade and what the likelihood is that such an upgrade will result in a positive impact on the rating. If for some reason the rating doesn't calculate out the first time, the rater can combine different elements until it does. If you need help finding a rater in your area, go to http://www.resnet.us/trade/find-raters-auditors.

As to my final point of today's discussion – start this process early! As soon as your buyer is confident on their model selection and specifications, and you have some type of a pre-approval, you want to get your HERS rater involved. He or she can do a preliminary rating off of floor plans and building specifications, thus allowing time to tweak the home's configuration if necessary. If you wait until the end of the process when the home is about to be delivered, you very well may have turned an opportunity into a liability. With just a little forethought we can all be green and make some green in the process – legitimately!

###

Shawn P. Mullins has worked in the manufactured buildings industry for over 22 years. Over the course of his career, he has held various leadership posts including: Engineering support and management, Estimating Management, and Operational support positions. His product experience covers a wide spectrum including: HUD, IRC, international and man camps, ANSI, light commercial, etc. Mr. Mullins currently holds a BSBA/Operations Management degree and is currently pursuing a MBA with a focus in Project Management. Industry-held positions include Board of Directors, and Government Relations & Zoning Committee membership for the Arizona Housing Association. Other industry-related pursuits include Owner & Principal Managing Member of Earthwise Engineering LLC, an energy-efficient design, consulting, and HERS-rating company. Mr. Mullins welcomes comments, feedback to his articles and industry connections via This e-mail address is being protected from spambots. You need JavaScript enabled to view it or www.earthwise-engineering.com

Daily Business News Briefs

Modular Housing may Meet Affordable Housing Needs

Modular Housing may Meet Affordable Housing Needs

State College, Pennsylvania community members, gathering to discuss the need for affordable housing in the area, suggested modular housing as a means to meet the challenge. A woman who lives in a subsidized housing community says she spent a long time trying to find suitable lodging. “This was the only place we could find in [...]...

18 Apr 2014

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Stock Markets closed Today

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18 Apr 2014

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Sun Communities’ Lawsuit against Resident Dismissed

Sun Communities’ Lawsuit against Resident Dismissed

A lawsuit filed by Southfield, Michigan-based Sun Communities, Inc. (SUI) against the owner of a manufactured home in Southwood Village Mobile Home Park alleging the owner did not give Sun an opportunity to match an offer or be the highest bidder has been dismissed. While both sides are barred from discussing the case with the [...]...

18 Apr 2014

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Drew to Release Q1 Financials

Drew to Release Q1 Financials

Elkhart, Indiana-based Drew Industries, Inc. will release its first-quarter 2014 financial results before the market opens on Thursday, May 1, 2014. As marketwatch.com reports, the company will host a conference call later that morning at 11 AM eastern standard time to discuss the results and other business matters. Participation will be limited...

18 Apr 2014

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More Underwater Property Owners Breathing Air

More Underwater Property Owners Breathing Air

In the first quarter of 2014 9.1 million U. S. residential properties representing 17 percent of all properties with mortgages were seriously underwater—defined as the loan amount 25 percent higher than the market value–down from 26 percent one year ago, and a drop from 9.3 million residential mortgages representing 19 percent of all p...

18 Apr 2014

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Legislature may Block Sales Tax on Manufactured Homes

Legislature may Block Sales Tax on Manufactured Homes

The Missouri state department of revenue is set to start collecting sales tax on the sale of manufactured homes due to a recent state supreme court ruling. According to missourinet.com, manufactured homes (MH) are considered personal property, which is subject to sales tax, much as an automobile. There are 217,600 MH in the state, about [...]...

18 Apr 2014

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Former Manufactured Home Sales Employee Arrested

Former Manufactured Home Sales Employee Arrested

The Lake Wales, Florida Police Department has taken Melissa Platt Ginther into custody for allegedly embezzling over $250,000 from Central Florida Manufactured Home Sales. Business owner Pam Thompson contacted authorities who discovered during the course of an investigation that Ginther was said to have falsified documents from 2010 to 2013 in an...

18 Apr 2014

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Skyline Corp. Loses most of Yesterday’s Gains

Skyline Corp. Loses most of Yesterday’s Gains

The three major indexes diverged in today’s trading, as the Dow Jones Industrial Average slipped and the Nasdaq and S&P nudged up slightly. The Dow dropped -16.31 points, -0.10 percent, to close at 16,408.54. The Nasdaq gained +9.29 points, +0.23 percent, to end the session at 4,095.52 while the S&P 500 moved up +2.54 points, [...]...

17 Apr 2014

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Equity LifeStyle Properties Hit with Additional $95.8 Million Damages

Equity LifeStyle Properties Hit with Additional $95.8 Million Damages

Updating a story MHProNews.com posted April 15, 2014 regarding a California court’s $15.3 million compensatory verdict against Equity LifeStyle Properties (ELS) brought by residents of California Hawaiian manufactured home community in San Jose, the same jury has awarded the plaintiffs $95.8 million in punitive damages. As regards the damage...

17 Apr 2014

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Former Detention Center may Become Modular Housing

Former Detention Center may Become Modular Housing

Due to new state regulations that would have driven up the cost to operate the St. James Parish Youth Detention Center in Vacherie, Louisiana, the facility has been unused since June 30 of last year, and the Parish Council has put it up for sale for $2.5 million, according to theadvocate.com. Recent inquiries have centered [...]...

17 Apr 2014

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Housing Starts Rise Modestly

Housing Starts Rise Modestly

The National Association of Home Builders tells MHProNews.com housing starts rose 2.8 percent in March over February to a seasonally-adjusted annual rate (SAAR) of 946,000, up from 920,000 last month. According to statistics released by the Department of Housing and Urban Development (HUD) and the Census Bureau, single-family housing starts rose 6...

17 Apr 2014

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Featured Articles and Reports - April 2014 Vol. 5 No. 7

Prev Next Page:

Your Business Image Matters, and Technology can Help!

Your Business Image Matters, and Technology can Help!

by Brad Nelms Professionalism is an important element for success in any business, including all elements of manufactured housing (MH).  If you doubt that, imagine an hypothetical MH community (MHC) owner... Read more

MARKETING

Get Your Business To The Top Of Google... ...Guaranteed (!?)

Get Your Business To The Top Of Google... ...Guaranteed (!?)

I know what you're thinking.  This sounds too good to be true, right?  Must be a scam, right?  Actually, it's not.  What business wouldn't want to appear at or near... Read more

MARKETING

Three Takes on Tunica 2014!

Three Takes on Tunica 2014!

by Maria Horton, Tammy Fonk and L. A. 'Tony' Kovach After returning home to a swarm of earthquakes in Southern California, I must admit that the rain, thunder and lightning that... Read more

MARKETING

The Newest Chapter in the “Only in California” News

The Newest Chapter in the “Only in California” News

by C. William Dahlin, JD There are many jurisdictions within California that have forms of rent control for mobile home parks. This phenomenon of price fixing has infected many locations within... Read more

COMMUNITY MANAGEMENT & FAIR HOUSING (LEGAL)

Where Are You From?

Where Are You From?

by Nadeen Green, JD Four such innocent words comprising a simple question. And this is a question I have asked of others many times. Travel for work throughout the U.S. in... Read more

COMMUNITY MANAGEMENT & FAIR HOUSING (LEGAL)

The Impact of Dodd-Frank on Manufactured Housing

The Impact of Dodd-Frank on Manufactured Housing

by Harold D. Hunt, PhD New rules mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) took effect on January 14th and are expected to have a significant... Read more

FINANCING

Dirty Laundry

Dirty Laundry

by Stacey Epperson What is it about dirty laundry we don’t want anyone to see? Mine finds its way to my 50 year old Maytag washer every day. This relic is... Read more

GENERAL MANUFACTURED HOUSING INDUSTRY TOPICS

Controversial New York Times article on 'mobile homes' and 'trailer parks' …

Controversial New York Times article on 'mobile homes' and 'trailer parks' lands Frank Rolfe, Dave Reynolds and Mobile Home University in the Spotlight

by L. A "Tony" Kovach In the aftermath of the controversial New York Times article - The Cold, Hard Lessons of Mobile Home U by Gary Rivlin - has many... Read more

GENERAL MANUFACTURED HOUSING INDUSTRY TOPICS

Crucial Communications

Crucial Communications

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GENERAL MANUFACTURED HOUSING INDUSTRY TOPICS

Let's Be Positive!

Let's Be Positive!

by L. A. “Tony” Kovach Let's all put actions to our words! When we say, “let's be positive,” the vast majority of what MHProNews has published from our beginning in... Read more

GENERAL MANUFACTURED HOUSING INDUSTRY TOPICS

A Cup of Coffee with...Chet Murphree

A Cup of Coffee with...Chet Murphree

1) Who, What and Where: (Your name and your formal title at Deer Valley Homebuilders). Chet Murphree, Vice President, General Manager, Deer Valley Homebuilders, Inc.. Read more

GENERAL MANUFACTURED HOUSING INDUSTRY TOPICS

Strategic Thinking Myths

Strategic Thinking Myths

by Tim Connor, CSP I am frequently amazed at how many intelligent, talented and well meaning executives and business owners often have blinders on that prevents them from accurately seeing their... Read more

MANAGEMENT

Self-accountability - The Single most Important Trait Necessary for Enduri…

Self-accountability - The Single most Important Trait Necessary  for Enduring Success

by Tim Connor, CSP There are many traits that when embraced can contribute to enduring success. At last count when it comes to success, I found over; 2500 books, 3 million... Read more

PERSONAL REFLECTIONS, MOTIVATION and INSPIRATION

ZigOn Handling Critics

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by Zig Ziglar I'm comfortable in saying that anyone who has ever done anything of significance has been, at one time or another, unfairly criticized by those who believe they deserve... Read more

PERSONAL REFLECTIONS, MOTIVATION and INSPIRATION

Gauging the Customer’s Intent

Gauging the Customer’s Intent

by Tim Connor, CSP Intent and intention seems to be a hot topic these days. Wayne Dyer has a book on the power of intention, Brian Klemmer has a book on... Read more

SALES

Be The One and Only in Your Market

Be The One and Only in Your Market

by Scott Stroud One of the Top 5 Questions you as manufactured or modular home pros should be asking yourself now is: Why should your potential customers – buyers, renters, tenants,... Read more

SALES

Upcoming Events

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MHLIVINGNEWS.COM FEATURED HOME OF THE WEEK

Classifieds

Press Releases

Register Today and Save for the 2014 Nat…

Register Today and Save for the 2014 National Congress & Expo for Manufactured and Modular Housing April 29 – May 1, 2014 - Creating Opportunities – Building Success

You won’t want to miss the 2014 National Congress & Expo for Manufactured and Modular Housing to be held on April 29 – May 1, 2014 at Caesars Palace in Las Vegas, Nevada. The Congress & Expo is the largest annual gathering of industry leaders featuring outstanding speakers, workshops, exhibits, and networking opportunities! For information on exhibiting, please visit http://www.congressandexpo.com/2014/exhibitors.asp to view the floor plan, booth prices, the list of 2014 exhibitors and to reserve your booth space. For detailed information on this important industry event, information on hotel reservations and to register, visit www.congressandexpo.com. Due to the high demand for event registrations and to allow more registrants to take advantage of the discounted rates, the early-bird rates for registration and the special Caesars Palace hotel room rate of $119 per night...

the MHMSM Team 15 Apr 2014 Corporate Press Releases

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Green Court Partners Name Matthew J. Pyz…

Green Court Partners Name Matthew J. Pyzyk and Chad V. Gardner Vice Presidents

Lake Forest, Illinois, March 20, 2014 - Green Courte Partners, LLC, a private equity real estate investment firm focused on building industry-leading companies within niche real estate sectors, announced today the promotions of Matthew J. Pyzyk and Chad V. Gardner to Vice President. Matthew J. Pyzyk joined Green Courte in June 2012 as a Senior Associate.  During his time with Green Courte, he has served in various capacities within the acquisitions and asset management teams for Green Courte's land-lease/manufactured housing communities and parking strategies. Most recently, Mr. Pyzyk has been principally focused on acquiring properties for the firm's growing land lease/manufactured home communities platform, American Land-Lease, Inc. As a Vice President, Mr. Pyzyk will continue his efforts to acquire land-lease/manufactured housing communities and focus on investment opportunities within the Florida, Desert and Northwest US markets. Prior to joining Green...

the MHMSM Team 20 Mar 2014 Corporate Press Releases

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2014 Legal Briefing Breakfast For Manufa…

2014 Legal Briefing Breakfast For Manufactured Housing Communities/Parks

Click here to register! Seating is limited. Please RSVP no later than Thursday, March 21, 2014 .  Questions: Contact Barbara Ericson Direct Dial: (657) 622-4714 or bericson@hartkinglaw.com

the MHMSM Team 14 Mar 2014 Corporate Press Releases

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2014 Tunica Manufactured Housing Show Lo…

2014 Tunica Manufactured Housing Show Looms

Our registration web link is: http://www.prereg.net/2014/tmfs. 2014 Tunica Manufactured Housing Show Business Building Seminar Series!

L.A. Tony Kovach 04 Mar 2014 Corporate Press Releases

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Updated News! 2014 National Congress & E…

Updated News! 2014 National Congress & Expo for Manufactured and Modular Housing to be Held on April 29 – May April 29 – May 1, 2014 – Creating Opportunities – Building Success

The 2014 National Congress & Expo for Manufactured and Modular Housing will be held on April 29 – May 1, 2014 at Caesars Palace in Las Vegas, Nevada. The Congress & Expo is the largest annual gathering of industry leaders featuring outstanding speakers, workshops, exhibits, and networking opportunities! With the theme of Creating Opportunities – Building Success, the 2014 National Congress & Expo for Manufactured and Modular Housing will move back to Caesars Palace with a low room rate of $119 per night. Caesars Palace provides excellent meeting facilities for the Congress & Expo and easy access to some of the best restaurants, shopping and entertainment in Las Vegas. For more detailed information on this important industry event and to register, visit www.congressandexpo.com. The early-bird rates for registration and the special Caesars...

the MHMSM Team 07 Feb 2014 Corporate Press Releases

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Eastern Ohio Home Show (produced by the …

Eastern Ohio Home Show (produced by the Ohio Manufactured Homes Association)

  Friday, May 16th - Sunday, May 18, 2014 MAPS Air Field and Museum, North Canton, Ohio (adjacent to the Akron/Canton Airport) Deadline for the home display & indoor exhibitor space is February 15, 2014! With 15 homes already committed, OMHA anticipates 20 or more fully furnished and landscaped homes for display to the public. 26 indoor exhibitors from all over the country have already purchased exhibit booth space including lenders, MH communities, retailers and service/suppliers. Local businesses and organizations throughout eastern Ohio have also asked for booth space and other show involvement. Indoor booth space is limited to 40 booths.  Interested exhibitors should register soon to ensure availability.  The Show will consist of an Industry/Dealer Day open to those in the Manufactured/Modular industry, local and state officials and community leaders followed by a three day Public Show. Homebuyer lending...

L.A. Tony Kovach 04 Feb 2014 Corporate Press Releases

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Jobs

Community Manager/Maintenance Manager Positions

We are currently looking for go-getter individuals and couples to manage and maintain our 4 star, family owned and operated, communities located in the major metro Chicago and St. Louis...

the MHMSM Team - avatar the MHMSM Team 18 Mar 2014 Community Operations

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Community Manager/Maintenance Manager Positions

We are currently looking for go-getter individuals and couples to manage and maintain our 4 star, family owned and operated, communities located in the major metro Chicago and St. Louis...

the MHMSM Team - avatar the MHMSM Team 18 Mar 2014 Management

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General Sales Manager/ Manufactured Homes

General Sales Manager/ Manufactured Homes

Opportunity – General Sales Manager for a new regional manufactured home sales center located in Belle Vernon, P.A.  Looking for someone who is looking for a GREAT career move! We are...

the MHMSM Team - avatar the MHMSM Team 04 Mar 2014 Community Operations

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Base + Commission = $100,000+ annual

Medium Sized Family owned and operated business Well established over 40 years DST Program (Dynamic Sales Training) simplifying modern technologies to enable YOU to reach your full potential, create wealth, and have...

the MHMSM Team - avatar the MHMSM Team 17 Jul 2013 Sales

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Regional Manager

POSITION SUMMARY An employee in this position is responsible for property management program for each manufactured housing community. The employee is expected to have a thorough knowledge of all aspects of...

L.A. Tony Kovach - avatar L.A. Tony Kovach 08 Jul 2013 Community Operations

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Earn up to $75,000 a year

Earn what you are worth, through true base salary, bonuses, commissions and benefits. Must be: Good communicator. Good listener. Dependable. High integrity. Solid, verifiable references. Basic computer skills on normal office software. Team player. Appropriate vehicle that is properly...

L.A. Tony Kovach - avatar L.A. Tony Kovach 28 Dec 2012 Sales

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MH Industry E-Publishing and Video Reporter/Editor Wanted

MHMSM.com plans to dive into the world of video reporting and interviews.  This will be a compliment to our current audio podcasts and e-publishing via blogs and feature articles. The right...

the MHMSM Team - avatar the MHMSM Team 07 Jul 2011 Reporter

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WordPress/Joomla Administrator needed

MH Marketing Sales Management (MHMSM.com) is an online national trade journal for the manufactured housing industry. We are a virtual team: our founder/publisher is in Chicago (Northfield), with other members...

the MHMSM Team - avatar the MHMSM Team 24 May 2011 IT and Web Development

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Sales Person for Manufactured Housing Sales Center

Sales person: Manufactured Housing sales center in Western Nebraska looking for a lot manager/sales person. Must be self motivated, organized, and had success in the industry. Sales lot...

the MHMSM Team - avatar the MHMSM Team 21 Apr 2011 Sales

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WordPress/Joomla web development assistant

MH Marketing Sales Management (MHMSM.com) is an online national trade journal for the manufactured housing industry. We are a virtual team: our founder/publisher is in Chicago (Northfield), with other members...

the MHMSM Team - avatar the MHMSM Team 17 Feb 2011 IT and Web Development

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