Ralph and Jim,
Though, I don’t know you, I am thrilled that you are willing to offer what appears to be a well thought out review and plan for the Mobile Home Industry. This is a great forum to discuss this in depth as there are numerous creative individuals on this board.
I have some comments and some questions:
As David said in his post, you have presented a wonderful review of the history of the Mobile Home Industry covering the most recent ten years.
You have also given a clear description of the traditional, and now, “old” model of selling mobile homes and placing them in communities.
I’m not as clear on the new model you have presented as there appear to be two parts to it, both called models: The front-end model and the back-end model. Perhaps, if I understand it, there ARE two models which can operate independently OR interdependently. Is this correct?
Also, to help me understand this (these) models, please clarify some terms for me. I believe when you say a “community dealer/lender” you are referring to what is now commonly known as a Lonnie Dealer. Is this correct? I know that this may be just semantics but many people on this forum, like me, have become Lonnie Dealers. When you say “community” dealer or owner do you mean “Mobile Home Park (MHP)” dealer or owner? If my assumptions are correct, I believe your paper would be easier to read to most of us if you put “our” vernacular in parentheses.
Now, to return to the new model(s). The front-end model appears to be a description of a typical independent Lonnie Dealer model. The back-end model appears to driven by the MHP owner to buy homes, move them into his/her park and sell them in the park. This model is, of course, strongly promoted by Steve Case and Corey Donaldson, creators of this website.
There is another model you speak of in your back-end model, I believe, where the MHP owner actually funds the independent Lonnie Dealer allowing longer payback plans and “flexible use as it pertains to the homes”. I do not know what that last statement means. Overall, for the purposes of a white paper, I would like to see more clarification of the new model(s).
There are two issues not addressed in your paper. You mentioned that this plan is for “affordable” housing. There is no discussion of how manufacturers could contribute to making these homes more affordable. As you may be aware, most new manufactured home dealer sales are double wides (DW) to be put on land. The dealers are smart enough to buy up land and develop it for this very purpose. There is more profit in a DW just as there is more in a Cadillac than a Chevy. What the MHPs need are truly affordable homes.
What are needed are SIMPLE 2 & 3 BR homes without “Lifestyle” amenities such as inefficient garden tubs, fireplaces, etc. A basic 2 or 3BR 14 X 70 or 16 X 80 home that Lonnie Dealers (LDs) and MHP owners can buy factory direct at a reasonable cost.
Finally, Manufacturers and MHP owners need to address the “affordability” of energy costs to our typical consumer. This is particularly true for more northern climates. Liquid Propane (LP) gas has quadrupled in price in our area in the past three years. Although everyone will have to take a hit on energy costs in their daily lives, those with less means will be hit proportionally harder. Perhaps MHP owners need to face upgrading their infrastructure to 200 AMP service and purchase (using the new model(s)) all-electric homes, heat pumps, or otherwise energy-efficient homes.
Thank you again Ralph and Jim for endeavoring to create this white paper, it is a noble and timely task.
Heartland Investors, LLC