Issue link: https://read.dmtmag.com/i/72467
DEVELOPMENT MARKETING Ask Eddie BY ED HICKS The few HUD Code home manufacturers left are building excellent value housing, with some pretty innovative floor plans and home designs within the limits of transportation limitations of course, at excellent prices. Is that enough? With the notable exception of seniors, most of our industries traditional home sales into LL- Communities have been to buyer/residents using chattel mortgage financing with minimal down payments and fair to poor credit. That hasn't worked well in recent years largely because of the relatively high rate of loan defaults. And with past industry abuses, we have largely been abandoned bymany investor sources. With the exception of the FHA Title I program, there is no secondary market for our lender's notes. Unless we improve the financial and credit sta- tus of our home buyers, were are going to be stuck in this pattern, forever. To survive, we must therefore find a way to greatly improve our image with the general pub- lic, and appeal to buyers with better credit pro- files, using current viable underwriting terms by responsible lenders, and quit "belly-aching" about not being able to get loan approvals for the many "bottomof the barrel, site built housing re- jects" and seriously "credit challenged" buyers. Although not well understood yet by many re- tailers, chattelmortgage financing for homes have greatly improved with the implementation of the HERA revisions to the FHA title I program, and other viable programs which are available by re- sponsible lenders. The undeserved, poor state of our image with the general public, which spills over to local politicians who control zoning and land use for new communities is a serious problem. It is ap- parent to some others that there is little that we who are a part of the industry can do about this without a massive infusion of capital for institu- tional advertising. Or in the alternative, as I have so often suggested in the past, we should consider initiating a much lower but as effective "product placement" strategy which would in- volve support from writers, producers and direc- JULY 2012 26 THE JOURNAL tors of TV and Internet production. When the public fully understands the truth about myths such as: home depreciation, lower- ing neighborhood home values, types and quality of residents, construction quality, fire safety and windstorm safety, etc., the general public is going to continue to "shun" our quality, afford- able homes, especially in quality managed land lease communities. Wemust accept the fact that wemust appeal to financially stable home buyers with good credit histories, and not rely on credit challenged buy- ers. Instead of hiding them on the back of the sales center we need to be building interest in one of the best home values in America: the single section home, and smaller doubles, both of which are truly affordable. As nice are they look, except in rural areas, and in seniors communities it is useless to build and try to sell sell expensive, unnecessarily "gim- micked up" multi section HUD code homes, which try to emulate site built homes, but are far from affordable. They make good "getters" for boulevard retail sales locations, but with the ex- ception of a few markets, don't represent a sig- nificant number of home sales. Boulevard retailers who essentially abandoned land lease community home sales in the past 15 years, need to revisit their sales programs, and learn how to sell the many advantages of living in amanufactured home in a land lease community, when compared to living in high density cheap apartments with all their disadvantages. it's hard to believe that once the facts are known, m/h show up as much a better housing alternative. Non-credit challenged would be, apartment residents should be a our major target types of buyer/residents In the case of the revised FHA Title I home financing program, 5% down pay- ments are often not much more than first, last, and security deposits required by many apart- ment. The additional income tax deductions for interest paid, and the potential for a return of eq- uity upon the sale of their home, places m/h liv- ing at a premium over apartment living. Much of the general public form their attitudes fromwhat they see and hear on TV, and fromso- cial networks. Institutional advertising has not al- ways done the job of significantly changing public opinion. Popular sitcoms, and reality based shows and opinionated politicos can. Remember Dem- ocratic party strategist James Carvilles obnoxious comment about dragging a $50 dollar bill through a . . . ? (insert a pejorative term often used by political ignoramuses) Real positive improvements in our image with the general public which can pull us out of the doldrums, won't come from within our industry bymerely improving retail sales techniques. They will come from without when the general public has a clear picture of the positive realities of m/h community living, and begin to consider of our unique type of housing seriously when evaluating their housing needs. If we are effective, we will drive a much larger percentage of prospective home buyers with bet- ter credit credentials to our sales centers, on the boulevard and within communities, than in the past And for those of you out there who think we can raise the large amount of capital required from within our industrymembers for amassive, effec- tive, institutional advertising program, think again. It ain't gonna happen. In my opinion, There aren't enough"deep pockets" in the industry will- ing to fund such an effort. Perhaps a smaller effort in a different direction by thinking smarter, and usingmore subtlemeth- ods enlisting the entertainment side of mass media, and new social marketing techniques, in my humble opinion, we can and must with min- imal capital, find ways to accomplish meaningful positive changes with the general public. T J Edward Hicks, Principal Consultant. CRG, Inc. 45 years in Modular&HUD code homes manufacturing, retailing, com- munity development, financing and brokerage. www.factory- builthome.com, www.mobilehomepark.com www. FHA207m.com. 813 661-5901