It sounds like the government has been pushing back on mobile home manufacturers given the exorbitant interest rates that are being charged to those financing purchases of new homes (including the MHP owners who do rent to own) and people are realizing that there is no reason to buy a $100,000+ mobile home which gets depreciated over time when one can buy a “real” $120,000 home with a plot of land that goes up in value. I have also heard from a number of sources (hearsay) that there has been a steep decline in people buying new homes in the past few years and that once the current homes get old there really aren’t going to be many more people buying new homes. The concern is that this will cause many of the mobile home manufacturers to go out of business and negatively impact MHP owners.
Anyone have any thoughts on these concerns?
Also sounds like MHP manufacturers are starting to get some bad press:
The cashe of mobile homes was at a high point when all the rich guys had them way back in history, back when the prices were out of reach of the common guy. The people who could pay $100,000 on a mobile home are not the standard MHP resident and most park owners would be throwing money away placing a new home priced over $30,000 in their park. The modern MHP is the first step in affordable single family detached dwelling, and the press likes to get readers all worked up over little information, usually false pretenses and sometimes all out lies. Fair and balanced press hardly exists these days, and most likely is a myth of the past.
Actually mobile home purchases are more often the only step for this demographic. They are not participants in the social latter they are observers. Unlike stick built homes mobiles are a depreciating asset which prevents the owners from ever advancing beyond this ownership and generally locks them in for life. This applies of course only to the typical MHC which is kindly (wink, wink, nod, nod) referred to as affordable housing. There are many upscale community’s which are at the other end of the resident spectrum.
Owners of communities simply accommodate the market. In my market it is impossible to purchase and set a new mobile for under $90,000 but we manage by adjusting and catering to a different demographic. Communities that do not change with the times attract only bottom feeders and wallow in crime and poverty.
There now appears to be a bigger swing toward manufactured as opposed to mobile homes. Whether these homes will ever see popularity in leased land communities is questionable but mobiles will likely always be available in some form or other.
Mobile home park owners are buying new mobile homes. The thousands of park owners across the United States, all have a vested interest in keeping their lots full of homes. Big company’s like Sun Homes, or Frank and Dave are purchasing new homes. Luckily for guys like me who buys used homes, this equals used homes in the future.
Even if some manufacturers went out of business, its not like NO ONE would be making mobile homes.
The used 80s and 90s homes, potentially have decades of use left on them. Also there are more parks closing each year then there are being built new. Therefore, many of the homes in the parks that close often get moved to other parks.
I have owned parks for 13 years. Over the years I have had worries about the lack of new homes being built. However as the years have played out, I see that I have nothing to worry about. I think the majority of the homes in my parks currently, will last my lifetime, and I’m only 32.
People need and want our product. When there is need and demand, the money and details will take care of themselves. Our Industry is fine.
One of the POHs in one of our communities is a 10x54 1960 New Moon. You can find it filed under the vintage section on any site related to the history of manufactured housing. It’s currently rented for $550 per month. Additionally, over the years it has had a new roof, HVAC installed, and is all electric. It perfectly serves the needs of this tenant in a market where a similar sized class-C apartment rents for $850 and has no yard. Stories like this shouldn’t scare anyone off of the viability of a MHP investment. Our industry is not tied to the manufacturers.
On a side note, the main feature of this article bought their mobile home in 1997. However, this is a slam piece on Warren Buffett… I find it a little odd that this was the example they chose to feature considering Buffett didn’t own Clayton Homes in 1997.
That article was written by “The Center for Public Integrity” and then submitted to the Seattle Times. They are a group that writes slam articles for hire. Read this about them
They are basically funded by George Soros and other misguided liberals who mask their slam articles as being actual journalism – which they’re not. There is a ton of information on CPI on-line and none of it is good. In this slam piece, they are basing their assumptions on three or four hardscrabble families out of hundreds of thousands of decent customers that Clayton has financed – that’s not a fair sampling at all. It appears that you could literally write CPI a check to write about anything you want to slam and they’ll do it. Essentially, somebody in the liberal world hates Warren Buffet and paid them to write an article that was negative on him.
We must keep in mind at all times that the media is not in the business of reporting the news they are in the business of selling the news. Their aim like any other business is only to make money. Todays viewers and readers care nothing about everyday real world news. The 5 Ws have been replaced by the 5 Ss, sex, sensationalism, shootings, scandals and slander.
And I would add that George Sorros is one of the lowest forms of human scum bottom feeders on the planet. He is a convicted felon and has been known to manipulate currency nearly bankrupting countries just for financial gain.
Our media portrays him as a philanthropist. He should be deported back to Hungary.
Mr. Buffett is a liberal just like George S. althought Warren has been more tolerant of American values. Warren’s dad was a local store owner in Omaha that also served in congress who was a true ethical, conservative who did not seak the goddess of money. Please remember the hate that follows any company Mr. Buffet takes over–jobs are loss but his profits increase. Mr. Buffet if he cared could easily give loans to park owners and new mobile home owners for less than 3% and Clayton Homes would still be rolliong in the money. Mr. Buffett will always do what is best for Mr. Wonderful and builting mobile home is only about money–net helping our fellow American having a better life and future. Have a happy Thanksgivings!!!
I can appreciate Mr. Buffett not being interested in providing hand outs to others. I know I have worked very hard for what I have and see no reason to give to others simply because I have been successful. If someone wants a better life they need to work hard to earn it. Charity is OK if someone wants to offer it but I believe it encourages people to be lazy and dependant on it. I am not a supporter of charity, social programs or anything else that people do not have to work to earn.
Amen Greg… Amen. I did thirteen deployments to Iraq/Afganistan and the fruits of my defense of this country are the capital I’ve invested into the parks I currently own. Coincidentally, the education I received in this venture wouldn’t have been possible without folks like you all on the forum. I’m gearing up for number fourteen to happen right after New Years and I’ll be damned if I feel sorry for anyone looking for a handout.
For me, this type of article sickens me. The US and Canada is a bastion of opportunity for those who have the guts to seize it. Personally, I used to live in a park as a child. Now I personally own two and the group I’m partnered with controls eight. Pissing and moaning about your misfortunes is a very unattractive quality and should be scorned instead of celebrated. Anyways, hope everyone enjoys the Holiday Weekend! May we all make it through the weekend with no roto ruter!
As others have stated, the article you are referring to was very slanted, and deliberately incorrect in some places. I was “quoted” in that article as an industry expert on chattel finance, but unfortunately, I never offered nor stated any numbers on repossession rates specific to 21st Mortgage or Vanderbilt, and made repeated requests for corrections of what was actually said and discussed. While they withdrew any mention of me in future article, they never apologized or acknowledged the inaccuracies of what they originally wrote.
That should tell you something about the credibility of the article.
There are many factors that determine what an interest rate needs to be. These factors were covered in the Chattel Finance Newsletter earlier this year. The interest rates that are reasonable for a $150,000 home loan made to someone with A credit are going to be lower than a $40,000 chattel loan on a manufactured home to someone with impaired credit. That does not mean those higher interest rates spell major problems for the industry. My first lending company in 1975 had rates as high as 18% for some borrowers and as low as 6% for other borrowers. That did not stop (or even slow up) our retail company from selling homes to fill the community’s lots. Today, thanks to the Dodd-Frank Act lenders are effectively capped at 8.5% over APOR (which at the moment means 12-13%). The net effect is almost no lending by outside lenders on loans under $25,000. Many community owners are solving this problem by establishing their own finance companies, or entering into complex joint venture agreements to provide consumer financing.
Don’t believe everything you read, especially what appears on the internet. The industry is not going away - it is getting stronger
Charles, my youngest was just accepted to the Naval Academy. He wants to be an F-35 pilot. Who knows, perhaps he’ll be providing cover for you some day.
Send him my congratulations! As I’m sure you are fully aware, it is a very tough process just to get accepted into the academy. My uncle graduated from there about 30 years ago and spent most of his time in the Navy as a fighter pilot. He loved every minute of it!
Thank you. I had absolutely no idea how hard the process is to get into a service academy. They literally are the most selective of all colleges. We meet with our congressman this week to discuss the nomination. He has a letter of assurance so he’s guaranteed a spot, we just need to figure out where the nomination is coming from.
I’m obviously very proud of him and of course a little worried with the world the way it is these days. He has worked his ass off. 5.7 GPA on a 4.0 scale, captain of the basketball team (hence my screen name coach, until HS I was his only coach ever)
Sorry, don’t mean to brag but to hell with it, I’m damned proud of him.