I think it was Bob Dylan’s third album that had the lyrics, Oh The Times They Are a-Changin‘. This is as true today as it was when Dylan first sang it.
I’ve spoken this past week with 4 well placed manufactured housing finance pros, not counting emails from others. While each had a unique take, one thing they seem to agree on, we could boil down to a message Marty Lavin has already put into print.
Wall Street knows our Industry well. They know our statistics. They know our loan performance results (or the lack thereof). They are not about to be ‘fooled’ again.
No more Greenseco.
Don’t shoot the messenger, please, but one gent told me that it was ‘easy money’ that filled manufactured housing communities. That easy money is gone. We now need to attract credit worthy customers to communities and retail centers, as we shared recently in The Cutting Edge in online marketing and sales blog.
Accomplishing that requires making real, positive changes.
I’m inviting more and more Industry lenders and other Industry business and association leader’s to sound off in our Industry Voices guest blog. We need more people sharing their ideas – perhaps YOUR ideas – on what is necessary to turn business performance and thus industry performance around.
Because it is a foolish dream to think that easy Greenseco style money is returning. Those doing owner-financing can make loans to 550-590 credit score customers if they want to, but the Feds, Wall Street and savvy investors will make sure the Greenseco fiasco won’t be repeated. These pros tell me that anyone who tells you something different is mistaken or is selling something.
Now about writing. Professionals are busy, I understand that, and some just don’t have the desire to write in the first place. But until large segments of the Industry understand the imperative to change, we are going to continue our downward slide.
You need to hear these pros who speak to me address you in their own words. That is the ideal. That is what the Industry Voices guest blog is all about. Until more leaders take the time to write, I will do my best to share with you what they and other industry professionals share with me.
Monopoly money from Greensceco is gone. The FHA has also said they won’t take it in the shorts again at a semi-private DC meeting last year. Loans have to perform.
When a repossession occurs, Industry pros have to step up to the plate and help the lender out. Lenders tell me that those who do, will be remembered. They also say, that those who don’t will also be remembered. Now why is this important? Are lenders looking for a free ride?
MH chattel lenders are very willing to pay a reasonable commission and true costs to facilitate a sale. What they can’t do is continue to lose 50% or more on a loan when a repossession occurs. How can professionals seriously want more financing, when some treat lenders at repo time so badly?
We need to help lenders exit from a repossession in the normal way that it happens in the normal real estate world. Taking care of our Industry lenders is taking care of the present and future life-blood of our Industry.
MLS
Lenders and home owners need a re-marketing tool. Lack of cost-effective re-marketing is one key factor that is killing our Industry’s opportunities for growth.
In theory, the Industry already has a Multiple Listing System (MLS) type system, as Data Comp’s Dan Rinzema points out in an article by him in our upcoming September issue. What most may not realize is that other efforts at creating an MLS system are looming on the horizon. There are plenty of tools out there such as Manufactured Home Source, MHVillage to list and sell homes. New competitors to these well know firms have been created and will soon or already have been unveiled.
As an AZ retailer I spoke with recently said, what we now have (MHV-MLX) is so underutilized it may as well not exist. I’ve certainly spoken with others who say the similarly from their part of the country. While I understand the point the AZ retailer made, where we disagreed was the following. The lack of use of the MLS we have doesn’t make it bad, it simply means that any MLS system must be promoted, promoted and promoted again until it becomes second nature for our industry to use.
Because change doesn’t happen without someone ‘selling’ or promoting the change. That will take some time, money and a long term commitment on the part of those promoting an MLS.
What we should all realize is that an MLS is critical. Green Courte Partners Randy Rowe’s keynote speech last year correctly called for it as part of a 5 point plan for Industry recovery.
Lending and MLS are just two factors, there are more that need addressing if we are to attain our potential.
Without solid, positive change, we will see more and more industry members die out. That is not fear mongering, that is a statistical fact! Think about the dramatic fall of so many manufacturers, retailers and a growing number of manufactured home communities with high vacancies, more of which are in forbearance or foreclosure.
Two Words
Long before launching the MHMSM.com – MHProNews.com – online trade media, I published an article in the Merchandiser Magazine that we later reprinted here. Two Words explained just why I think the INDUSTRY will survive!
But will you and your company make it? Will you be part of the bright future some housing experts like Dr. David Funk or Chuck Shinn predict?
In the body or in a business, pain is a call for change. The Industry’s survival doesn’t mean you and your business will make it. A struggling factory, lender, retailer or community’s business pain is a clear message telling business leaders to change.
The rich and famous companies can always find the capital and ways to adapt. It is the mom and pop to mid-sized players that need to find creative ways to adapt and grow. If not, they will follow the bulk of the MH Retailer base who have already vanished in the last 12 years.
Herpes or owning the typical MHC?
A successful professional told me recently they would rather have a case of herpes than own the typical manufactured home community today. Those are strong words! They came from a community owner. It doesn’t mean he doesn’t believe in the industry, quite the opposite! He believes the typical community will (paraphrasing) turn back into a pasture or will become a big box store.
This community operator admitted there will be exceptions, but without good marketing, professional management/ selling, resident satisfaction, attracting good credit customers, we will see more communities fail.
Change must happen.
Not just problems, let’s talk SOLUTIONS.
I don’t believe in talking about problems without proposing solutions. In concert with MH execs and business owners from coast to coast, we developed a plan that can make a difference. This plan can work for the single location mom and pop plus all businesses that are larger. They key is involving pros who care enough to do what it takes. You can read the comments from those who have seen the MH Alliance/Phoenix Plan here.
For your own sake, please set aside the time to take a seriuos look at this plan. Once you have seen it, if you have a better one, one that deals with the realities of the Industry, propose it.
But until you’ve seen what it took months to craft, you are in no position to judge its merits. All you can do is think about what others have said, including more than one who opposed it, UNTIL they SAW for the MH Alliance/Phoenix Plan themselves start to finish.
I’m not Dr. ML King or any of the great orator’s – past or present – who will give you a soul stirring speech that will make you want to cheer, charge ahead and give your all. I’m a fellow who goes to his desk, day by day, the same as you do.
But I believe in our Industry and its potential future. We have a great product. We can be proud of it, especially when we back it up with great professional service. We need more than just an image and marketing campaign. We need a campaign that is tailored to fit YOUR market (not a one size fits all).
We need a plan that will get to the heart of what is wrong with our struggling industry (some say, failing) business model. That is what the MH Alliance/Phoenix Plan is all about – getting to the root causes of issues while giving us a tool to market and sell more homes through image building.
Associations and Leadership
I considered doing my blog today with a focus on associations, because I’ve seen and received more ‘anti-association’ messages of late. I may share excerpts from those comments in a future post. But I will cut to the chase and say my firm belief as before, we need manufactured housing industry associations. We need association leaders giving their best to move us ahead, not warring and feuding and watching our industry cycle down.
Many association pros are most assuredly doing their best to advance us. I salute all those who do!
One lender told me this week that as much as he enjoys going to MHI meetings, we need platforms like MHMSM.com to get the message out to the masses of Industry pros. Too few people can or do attend an MHI meeting, he said. There has to be a way to inform, inspire and improve greater numbers of MH professionals. The way to do that is the internet, and thanks to our sponsors, writers and readers like you, we are already doing it here.
The Imperative for real, positive Change
By implementing a plan for positive change, we can capitalize on the market changes that should favor manufactured housing.
If we do, we can become the dominant form of new U.S. housing construction, not second or third choice in housing. Dylan said it, Oh, The Times They Are a Changin’ – will you join the movement for positive change? ##
by L. A. “Tony” Kovach
Connect with me on LinkedIn
http://www.linkedin.com/in/latonykovach
