Issue link: http://read.dmtmag.com/i/620649
JANUARY 2016 22 THE JOURNAL Ask Eddie BY ED HICKS DEVELOPMENT MARKETING I am considering development of a new Seniors Independent Living community using factory built manufactured homes (m/h) in an area where there are few communities with post 1976 style homes and managed facilities. What will my "barriers to success" likely to be? Travis, S. New Rochelle, NY It will help greatly if there are some other com- munities near your planned development in which there are a significantly large percentage of post 1976 homes, and in which the residents have "pride of ownership" in keeping up their homes and homesites, and the landlord is equally as in- terested in fairly and competently managing the community. In some places, where the history of m/h land lease communities is not a pretty story, overcoming their negative image on area residents could initially be an "uphill" battle. Depending on the age and condition of other nearby m/h land lease communities, you may first be saddled with the tough marketing job of letting your prospective residents know that these types of communities are not all "trailer parks", or even the newer "mobile home" parks. The home units in them are neither the so-called "trailers" of years past or even "mobile" homes, since 99% of them are never moved from their original point of in- stallation, except in the case of a change of land use, fire or other forms of unintended destruction. It's also going to be necessary to explain how manufactured homes, including HUD Code and Modular (IBC) factory built homes may exceed but in all cases at least match the construction standards for site built homes. The advantages of course are not always apparent by looking at the exterior of the home. Although some architec- tural features are somewhat limited, the length and width of the sections or the roof pitch for ex- ample, the important construction standards are not. For HUD Code Built homes, these standards may be minimal in terms of room sizes, ceiling heights, etc. but not in terms of electrical and plumbing, heating and cooling, or light and ven- tilation. Nothing other than the additional costs for implementation limit the factory from building homes to exceed standards, and in many markets especially those which are designed for seniors, the factory built home provides construction features which often exceed those of site built or even IBC homes. And, many may not know that a HUD code home placed on a "permanent foundation" and conveyed to the residents as "real property", sub- ject to property taxes as a land-home combina- tion, is eligible for most long term, 30 year financing programs. So where are the disadvan- tages for a purchaser? Actually, none except for those who somehow continue to believe that a home built in a factory somehow isn't up to the standards of a site built home. Although the terms for financing a m/h for a buyer are still not on a "par" with site built homes, there may be hope on the horizon. Recent at- tempts to enforce their "duty to serve" mandate which is an integral part of the charter of all Fed- eral and Government Sponsored Lenders although somewhat stalled in committee, eventually should provide leveraged equilibrium between site built and factory built housing for homebuyers. Advantages of owning a home on a leased homesite in many market segments have not yet been fully understood. For seniors, for example, perception of "not owning' the homesite may be fewer and less important than they may be for younger, family, upward mobile home buyers. Leasing may provide for better community and resident management, and minimize any loss of values due to enforcement of residents commit- ment to community mandated guidelines for liv- ing, or rules and regulations. The right of a land lord or management entity even if owned by the residents such as. In a coop- erative or condominium homesite community, homeowners association to "evict" non complying residents is much more powerful tool than merely filing a lawsuit and obtaining a lien on the prop- erty, is less expensive, easier to effect, and much more effective. And retaining any increased eq- uity in the value of a home is retained for those communities in which management is effective in enforcement of any resident non-compliance. Residents of these types of communities tend to manage their homes and homesites with real "pride of ownership", since as the value of the community increases, so does their home. Resale values? Many have been told there is an auto- matic depreciation in value. Not necessarily true. Homes on leased homesites in well kept up and managed communities see home values increasing at rates equal to or even higher than surrounding site built homes. Homes I sold back in the 70's for $65K to $85K are reselling today for $350K to $500K depending on their community. With minimal maintenance, and smaller but homes which are better built than most site built, lifestyle and recreation become easier to accomplish, es- pecially in those communities which may either in- clude or are close to amenities such as golf courses, lakes, the seaside or mountain retreats. I must admit my prejudice. Since retiring a few years ago, I too live in a high quality factory built home within a seniors community with a commu- nity center, pools and spa, lakeside access, and a controlled access security gate. It's a small town lifestyle where everyone knows what most every- one else is doing, to our mutual benefit. We all watch out for each other. No noises common walls, no stairwells or elevators to spoil our soli- tude. I can be as independent as I want to be without worrying about someone knowing I am here. And it doesn't cost an arm and a leg. My manufactured housing independent living fits my budget. The landlord takes care of my lawn and homesite, and I take care of my home. It's a lit- tle smaller than the one I had before, but that alto makes it easier to clean and manage. Edward "Eddie" Hicks, lic. RE Broker, and Lic. Mort- gage Broker has been a manufactured housing com- munity developer and industry consultant, retailer and home manufacturer since 1963, and is currently a manufactured home resident of a seniors Age 55+ m/h condominium homesite community in Central Florida: Hidden Harbor on Lake Harris. He He may be reached at (813) 300-6150 and at easteddie@aol.com His websites are: www.mobilehomepark.com www.factorybuilthome.com T J