Industry Voices By Savvy Insightful Passionate MH Professional

Industry Voices By Savvy Insightful Passionate MH Professional

About Exhaustion – Memo in Reply to Marty Lavin, Esquire

Marty, thank you, my new best friend (whom I’ve yet to meet) for accurately quoting from my book. I paste in here for those who’ve not followed your train of thought in your recent column Exhaustion Sets In, just what you said:

“I sought the answer from his book [DEULING CURVES The Battle for Housing] to my “How will it be financed?” and found in his multiple step program to improve the industry the following on finance:

Accept the penalty of chattel financing or leasing and use it to include such necessities as skirting and exterior storage. Repos should result only from family disasters and crooks. Even better financing – even from local small-town banks – will come with a proven track record. Good affordable homes need no subsidies. Earn a solid reputation from performance rather than waiting for the government to enforce its arguable notions of engineering and financing.”

Very little to argue with there, but will that guide us back to 150,000 to 250,000 HUD Code homes? Annually? I wouldn’t hold my breath.”

Marty, we are in accord! Not only on those few words repeated above, but in the essence of your thoughtful piece. It should be read carefully by all those still working to build our industry.

And yet …

And yet, I detect a note of pessimism in your writing, while I am optimistic. Perhaps we have a problem of definition?

I was once VP of Strategic Planning for an optimistic (and very successful) fellow, who called me his “pee’er on parades.” “RJ,” he queried one day, “Why are you such a pessimist?”

“Why Jack, in my family, I’m considered a raging optimist!”

“Well, I’d sure as hell like to meet the rest of ‘em!”

So Marty, there are degrees of optimism, and I guess I’m a little north of you on the scale, while remaining in fundamental agreement.

My new buddy David Funk? Now, there’s an optimist!

When David asked me to write a book on manufactured housing, Marty, I gave him your spiel, in spades. That was two years ago.

David is a relentless optimist who rubbed my nose in a few realities and got my mojo going again.

I’ve recently seen David’s developments and if he were to ask me for a loan, I’d whip out my checkbook. But darn it, he doesn’t seem to need a loan, and if he did, I expect he’d just call his banker and it would be done.

His MH tenants also appear to be prosperous and happy. David’s buying manufactured homes, but not at rate that will get that trend line headed toward 200,000 units per year. He’s buying them at the rate he can find good MH prospects and stable, profitable sites. And he’s doing so in an area where decent stick homes can be purchased at a price competitive with the manufactured homes he purchases.

David has found an edge. A niche that he can profitably exploit and make a buck, while providing good homes for good folks of moderate income. Finance is not a problem.

And he’s not alone. Warren Buffet is pulling off a similar trick, on a somewhat larger scale.

So we come, Marty, to one point of disagreement. Who says we need 200,000 homes per year for a viable industry?

Sure it would be nice, and sure there’s a market for that many manufactured homes, but let me ask you a question. If the good fairy granted the industry’s wish for reasonable financing for a couple of hundred thousand homes, Mr. Pessimist, would that be a good thing? Or bad? Do you see the discipline out there to use that financing wisely? Or are you thinking, as am I, “Oh man, just what we need, another cycle of boom and bust.”

No Marty, we don’t need an infusion of loans. We need an infusion of leadership.

We need someone with money in the game, who’s betting the company on the future of the industry and has a vision and a simple clear message. Someone who can say, “Here is the path to industry success; follow me,” and get most of us to nod in agreement, changing course accordingly.

That won’t be you, Marty, and it won’t be me. We’re voices of the past. Neither will it be Doctor Funk, whose bet is too small. Maybe no one will step up to the plate, and if that turns out to be the case—if the industry continues the fragmentation that has characterized it from the beginning—then please accept my apologies. Your pessimism is justified and my optimism is not.

Now, let’s say the good fairy were to grant my wish. What might that shiny and charismatic leader put forward as a direction for the industry? That, of course, would be for him or her to decide and I only added the last couple of chapters to my book at the insistence of some of my editorial advisors. My advice surely does not count for a whole lot.

But let me say this. If (big if) a leader could get us pulling together, surely an American industry that can produce good housing at half the cost of its competition should be able to find its way to success. ##

Bob Vahsholtz

float: left; margin-top: 8px; margin-right: 10px; margin-left: 10px;kingmidgetswest@gmail.com

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