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Michigan Sets Standard for Modular Infill in Urban Areas

Champion Homes Modular Grand Rapids Michigan Infill

Vacated City Parcels Get New Life, Potential Homebuyers Get Affordable Options

Champion Modular HomesA Michigan company that began as a pilot project with modular housing under the auspices of a county land bank contract is shaping up to be a national model for city infill and affordable housing for some of the country’s most difficult and expensive places to buy a home.

“One of the largest housing challenges facing the United States is the lack of inventory,” said Todd Van Eck, a partner with David Allen in the newly incorporated business, called InnovaLab. “The lack of inventory in the urban setting has caused pricing to inflate at a rate that makes owning a home a real problem.”

The lack of inventory in urban communities and service-based communities is a crisis, Van Eck said. Families, in particular, cannot find affordable housing in the areas where jobs are most available. 

“While the term ‘crisis’ is used to describe the housing inventory, the reality is that it negatively affects the very fiber of a community and the economy,” Van Eck said.  “Quality housing, at an affordable price, is a must for every community.”

From County Pilot to Broad Incorporated Effort

MHInsider has followed the efforts of Kent County Land Bank — located in Grand Rapids, Mich., the county seat — and the rebranded InnovaLab entity in its efforts to provide a potential pilot program for an in-fill housing solution.  

Since that time, Allen and his team have begun to phase out county contract work. It has set about the evolution of InnovaLab as a company to change the way housing is provided. And it uses off-site modular construction as one of its tools.

True to the root of its name — innovation — InnovaLab uses tools available to federal, state and local governments to generate affordable housing. It joins alternative methods of construction and efficient methods of operation to facilitate affordable housing at all income levels. 

‘Breaking through traditional methods’

“InnovaLab is breaking through traditional methods of development to provide high-quality housing at an affordable price in communities throughout the country,” Allen said.

One of InnovaLab’s most important traits, as a company, is its ability to bring innovation to the development process. It does this with the use of tools available through various participants in order to get housing built.  

Thinking beyond traditional residential development methods to work with the government, the nonprofit sector and private organizations has resulted in viable housing for in-fill. Among its most important partnerships in the new development process is InnovaLab’s relationship with Champion Home Builders. Champion makes a variety of factory-built housing, including modular.

InnovaLab cites numerous reasons why Champion Homes has been such a great partner. But, the predominant characteristic of Champion Homes is its team of people and processes, Van Eck said.

“Champion Homes has been outstanding in facilitating the design work of InnovaLab, providing its design expertise, putting those designs into modularized engineering,” he said. “Champion has been providing consistent high quality, and its ability to maintain a process that is simple and effective. Working with Champion Homes has allowed InnovaLab to provide an innovative cost-efficient mechanism that gets quality housing on in-fill properties.”

Champion Modular Homes
A crane drops one module of a home at a time on the southeast side of Grand Rapids, Mich.

What Can Be Done with Off-Site Built Homes?

The reality of off-site construction is that most housing can be built using off-site methods. Off-site methods are used to construct single-family homes, multi-unit housing, apartment housing, and hotels. For InnovaLab, off-site modular construction is a key component of housing inventory, currently and in the future.

Steve Payne is the director of business development for U.S. operations with Champion Home Builders.

“There are some limitations with modular construction, but in many cases modular systems can work. We use the same materials, meet the same building codes, look the same and have many of the same amenities of traditional site-built construction,” Payne said. “Also, we are capable of meeting the neighborhood architectural characteristics in most infill settings.”

For InnovaLab, Champion Homes was selected as its provider of housing because of the ability to consistently maintain InnovaLab’s core requirements.

Those InnovaLab core requirements include: 
  • A defined process in design and construction
  • Consistent quality
  • Promotion of efficiencies
  • Clear communication
  • Maintenance of budgets and schedules

“The experience of actually going through the Champion Homes processes has exceeded expectations,” Allen said.

Champion Modular Homes Crane Set

Why does InnovaLab see Off-Site Modular Homes as a key?

There are a number of reasons why InnovaLab uses off-site modular. The off-site modular construction process provides efficiency, consistent quality, defined timelines, and defined budgets. The Champion Homes process has permitted InnovaLab to generate designs that can be used on in-fill properties with great quality, desired layouts, and beautiful, modern interior design. The process also has provided InnovaLab with a clear pricing structure to permit an increase in amenities or a decrease in amenities with secure delivered pricing. It permits planning, budgeting, and execution of housing construction at a level unmatched by InnovaLab when using on-site methods.

In July 2018, InnovaLab had an entry-level modular home and a more high-end modular put on the city’s southeast side, as well as a mid-priced home on the northeast side of Grand Rapids.

All three homes came from Champion’s plant in Strattanville, Pa., and all arrived ready to set on their foundations within four weeks.

Each home came in at about 70 percent the cost of what its site-built counterpart would be, at about $105 per square foot. The median price per square foot in the U.S. is $148. In Grand Rapids, it’s about $129 — $142 per square foot in the metro area.

Eric DeLong, Grand Rapids’ interim city manager at the time, said he had some understanding of modular housing through his brother’s professional experience. It is impressive with how the product had taken great strides in quality, design, and aesthetics, he said.

“I felt that modular was a viable solution to the affordable housing problem here, and I’m pleased to see this pilot program going so well,” DeLong said. “InnovaLaB has launched a pilot with a lot of promise.”

More Modular Homes to Follow

The program continues its trajectory since the time those original three homes were installed last summer. 

Another 10 modular residences have been installed, including a set of modular condos. And more orders are being taken.

Grand Rapids Michigan Modular Home
Photos courtesy of Champion Homes.

Impressions of Modular Homes for City Infill

During a recent installation on the southeast side of the city, an agent for the home listings as well as nearby residents and business employees watched a crane lower pieces of two modular homes as work crews fixed them into place.

Tanya Powell-May is CEO of Legacy Homes GR, a Keller Williams agency.

“My team and I will list these three properties in a couple of months,” Powell-May said. “These are our first modular homes. We sold over 77 homes last year, but none were modular.

“I look at how quickly that home went up… that’s amazing,” she said. “We have a crisis here in terms of affordable housing. If we can get quality housing for people who need homes at this price point, that’s great. All over the nation, there’s a shortage in inventory, especially at this price point.”

Bobbie Locke, who works at a consulting agency across the street from the new homes, said it was “incredibly exciting” to see the new homes installed so efficiently.

“What a beautiful thing for the neighborhood,” she said. “The architecture is a perfect fit. Though the neighborhood is mature and established, they’ll fit right in. It’s a wonderful opportunity.

“It doesn’t just mean good housing, it means fast housing,” Locke said. “The fact they can do it so quickly means people who are waiting are going to get into homes faster.”

How Modular Homes Are Sold

Potential buyers can also treat these new modular homes as they would any other home for sale. When completed and priced, the homes are listed on the metro multiple listing service and will be open for offers. Allen said developers can make the math work for the land. So, the only obstacle is people’s general perception of off-site built homes.

Typically, that perception is changed with a walk-through of a modular home.

“The stigma associated with off-site modular homes is not well placed,” Van Eck said, noting how auto manufacturing has thrived with continued improved processes. “Like automobiles, it is time for housing to modernize its processes to focus on efficiency as well as quality.”

MHInsider Managing Editor Matt Milkovich contributed to this article.

Excerpts From MH FacTOURy Summit in Elkhart, Ind.

MH FacTOURy Summit presenters attendees

2019 MH FacTOURy Summit Presenters Offer Insight

MHVillage teamed with IMHA to present the 2019 MH FacTOURy Summit in Elkhart, Ind. The June 17-18 event helps community owners and operators, as well as other manufactured housing professionals, better understand the business and best practices for customer service, management, marketing, sales and more.

What follows is a series of quick soundbites from the education series provided by MH FacTOURy Summit presenters.

MH FacTOURy Summit presenters Bruce Thelen
Bruce Thelen of Sun Communities.

Bruce Thelen, senior vice president at Sun Communities

MH FacTOURy Summit Presenter on “Building a Culture of Service to Achieve Results”:

  •      Use a “treat others the way you want to be treated” customer service philosophy
  •      “When you treat people right, the financial results will follow”
  •      Engage in leadership through service
  •      The average age of a millennial is 31… right at the “household formation years”
  •      Millennials expect to have trending features seen on HGTV (like a smart thermostat)
  •      Consider stilted homes like those being offered in the Florida Keys 
  •      Two homes combined in one using the deck to create outdoor space

Darren Krolewski, co-president at MHVillage/Datacomp

MH FacTOURy Summit presenters Darren Krolewski
Darren Krolewski, co-president of MHVillage/Datacomp

MH FacTOURy Summit Presenter on “Social Media Mastery”:

  •      Social media has a higher close rate and is less expensive than Google AdWords PPC 
  •      More than 80% of U.S. consumers have social media
  •      Facebook and Instagram are the most popular platform, with 88 and 60% saturation respectively
  •      75% of consumers base purchases on reviews
  •      More than half of social media users would rather message/text than call for customer service
  •      When shunned on social media, 30% of those polled will go to your competitor 
  •      90 percent of Instagram users are 35 years old or younger
  •      What to do on social? Educate about the buying process, post engaging content, share news, talk about local events, share listings, take a poll, or share testimonials/reviews, video/virtual tour, publicize charitable giving
  •      No more free reach — organic reach on Facebook is dipping as low as 2%
  •      Facebook pixel = use a code on your site that tracks visitors and shows them your ads
  •      Be prepared to respond now — this generation wants things instantly
  •      The chance of closing an online lead diminishes by 65% within the first 15 minutes of receiving the lead
  •      You need to respond the way buyers want to reach you — don’t push toward other means of communication

Dee Pizer, Board Trustee for Zeman Homes

MH FacTOURy Summit presenters welcome signMH FacTOURy Summit Presenter “How to Buy the Right Manufactured Homes”:

  •      Start with the site, measure the lot
  •      Make sure the aesthetic of the home fits with the community
  •      Upgrade siding to a darker color for corner lots
  •      Create a color package — if someone wants to factory order, you have color packages that are sure to color coordinate

 

John Ace Underwood, of NRI Inc.

MH FacTOURy Summit Presenter on “Lead Management: Marketing Might Be Your Goldmine”

  •     Marketing is all about finding people who are interested in your products or services
  •     If you aren’t getting more leads than you can handle, you have a problem
  •     There are no good or bad leads, only leads
  •     We absolutely, unequivocally own the word ‘affordable’
  •     Do not qualify people over the phone. Get them in front of you and then qualify them.
  •     Never, ever end a conversation without having discussed and scheduled the next logical step in the sales process.
  • Everything is about how your prospect feels after having spoken to you

Blevins Acquires Tri-State

Blevins buys Tri-State
The Blevins team talks with customers at a recent trade show.

Manufactured Housing Suppliers Combine Forces

Blevins Inc., a Nashville-based supplier of housing products, has acquired Tri-State Distributors and its nine branch locations.

Tri-State will continue to operate its corporate office in Royston, Ga., and all of its nine locations across Georgia, Florida, South Carolina, Alabama and Mississippi. Tri-State will be a division of Blevins Inc. and will continue operating as Tri-State Distributors.

Founded in 1983, Tri-State serves the hearth, heating and gas products industries, as well as the manufactured housing and residential HVAC industries, in the southeast United States. Its product lines include gas grills, fireplace logs and heating products, along with HVAC equipment and manufactured housing accessories.

Merging Companies, Merging Ideas

“When Brad Blevins and I began talking about merging our two companies, I came to realize that his ideas about what success means in business are the same as mine,” said Tri-State CEO Steve Williams. “We both believe in taking good care of customers and employees. The transition has been very smooth, and I have agreed to stay on for a while to help ensure that operations continue to run as they should. Overall, I believe this merger will be a win-win for everyone.”

Brad Blevins, president of Blevins Inc., said his company and Tri-State have been competitors for more than 20 years, and the organizations have become well acquainted with each other during that time.

“By partnering with Tri-State, we look forward to helping continue the great momentum that the company has and are very excited about the benefits that both companies can get by being a part of the same organization,” Blevins said.

Founded in 1971 and family owned, Blevins supplies the manufactured housing industry with 13 distribution locations. The Blevins service area stretches from New Mexico to Maine to Florida, making deliveries to 35 states. With the acquisition of Tri-State Distributors, Blevins Inc. will have over 500 associates.

White House Signs Executive Order for Council on Affordable Housing

White House Council on Affordable Housing
President Trump readies himself to sign an executive order on affordable housing. Image and video courtesy of C-Span.

Move Toward Regulatory Reform Bodes Well for Manufactured Housing Industry

President Trump signed an executive order that directs federal agencies to collaborate on ways to reduce government barriers to affordable housing.

“We’re going to take a major step in our historic regulatory reduction campaign today,” the president said during a live broadcast from the Oval Office. “We begin a bold new initiative to bring down the cost of housing for American families… launching the White House Council on Eliminating Regulatory Barriers to Affordable Housing.”

The new federal council will be led by Department of Housing and Urban Development Secretary Ben Carson.

“Over-regulation of housing in the housing market is a primary cause of the rising housing costs across our country. Nationwide it’s estimated that the regulations account for more than 25 percent of the cost of a new home,” the president said. “As a result, the supply of affordable housing cannot keep up with demand today. Over 37 million American households have to spend more than 30 percent of their annual income on housing.”

Manufactured Housing Institute on Council for Affordable Housing

In a “Housing Alert” to MHI members, the national association indicated the council would work on how to:

  • Quantify the impact of the lack of affordable housing on individuals and the economy and the impact of regulatory barriers on the production of affordable housing
  • Review rules and regulations for impact on impeding affordable housing development. And to make changes at the federal level to support the production of affordable housing
  • Adjust federal programs to incentivize localities to reduce regulatory barriers or condition federal funding on such reductions of local impediments, such as zoning and land-use restrictions
  • Present to Congress legislative recommendations to alleviate the barriers to the production of affordable housing

“MHI has always advocated for policy solutions that target the underlying problem—a limited supply of affordable housing,” MHI stated in its alert. “Today’s executive order makes clear that the only appropriate solution is to focus on reducing the cost of supply and emphasize innovative housing solutions, which includes manufactured housing and a right-sized regulatory focus.”

HUD Secretary Ben Carson to Lead New Council on Affordable Housing

Secretary Ben Carson said the council consists of members from eight federal agencies. Council members will lead federal efforts to engage with the state, local and tribal leaders across the country. The goal is to remove obstacles that impede the production of affordable homes.

“The president has given us a mission to break down barriers and to clear the path for the millions of Americans to pursue their American dream,” Carson said. “It’s a mission we proudly and enthusiastically accept.

“The forgotten men and women of America will be forgotten no longer”, Carson added, thanking the president and administration.

“The home is the foundation of the community, which is the foundation of the nation. We can all do this if we work together,” Carson said.

Structure of the New Council on Affordable Housing

A White House-issued release on the executive order states the assistants to the president for domestic policy and for economic policy, or their designees, will serve as vice chairpersons for the council.

In addition, the council on affordable housing will consist of the following officials or their designees:
  • Secretary of the Treasury
  • The Administrator of the Environmental Protection Agency
  • Secretary of the Interior
  • Secretary of Agriculture
  • Director of the Office of Management and Budget
  • Secretary of Labor
  • Chairman of the Council of Economic Advisers
  • Secretary of Transportation
  • Deputy Assistant to the President and Director of Intergovernmental Affairs
  • Secretary of Energy

Heads of executive departments, agencies and offices may, from time to time, designate or invite attendees, as appropriate. The vice chairs shall convene regular meetings of the council, determine its agenda, and direct its work with the oversight of and in consultation with the chairman. The Department of Housing and Urban Development will provide funding and administrative support for the council.

Senators Join Administration for Signing of Executive Order on Regulatory Reform

Sen. Martha McSally, R-Ariz., said she visited all 15 Arizona counties within the first 90 days of her Senate term. She said there was a theme among her constituents throughout.

“We’re a very diverse state, and the economy is growing. But a top theme is affordable housing, and there are many barriers to that, and so this group coming together … to provide more opportunities at lower cost, so everybody can meet their full potential, is really important for my constituents. So I am grateful for this initiative.”

Sen. Tim Scott, R-S.C., said the new council is certain to help more Americans who are credit-worthy to achieve homeownership.

“The American Dream so often is seen through the prism of homeownership,” Scott said. “This executive order will accelerate the path of responsible home ownership.”

Increasing Occupancy and Profitability by Offering Chattel Financing

Rickert Properties chattel financing
Photo courtesy of Rickert Properties.

Affordable Housing Crisis Impact on the Housing Market

The demand for affordable living options is rapidly increasing, providing new opportunities to fill this gap in the market. Mobile or manufactured home communities are a solid affordable housing option for populations priced out of traditional affordable options.

At the same time, many mobile home communities have undergone a significant transformation over the past two decades. Communities still in need of improvements have new financing opportunities for owners trying to turn a profit.

Aesthetics, Affordability Can Co-exist

Mobile home community owners have made great strides toward shifting the perception and the reality of manufactured home living. Many new communities include amenities like clubhouses, swimming pools, and tennis and basketball courts. The majority of the homes are move-in-ready, three-bedroom houses with full kitchens, baths, and laundry. The subdivision setup of communities allows for private parking, individual gardens, lawns, and patios on small, easy-to-maintain lots.

Affordability comes into play here. Consider that the quality of manufactured homes is equal to site-built homes, but the cost comes in at a fraction. This allows residents to save hundreds of dollars per month. Savings come from not only monthly lot rent or mortgage payments, but utilities when compared with living in an apartment or site-built home.

aerial of MHC chattel financing
A manufactured home community in Davie, Fla.

The New Normal of Mobile Home Mortgages

Just over a decade ago, residents would walk up to any mobile home dealer and purchase their own home to move into a park of choice. In that case, they could apply for a chattel mortgage. This allows the customer to pay off the home while not owning the land. These days, the path to manufactured homeownership looks a little different.

Most of these dealerships closed down in the wake of the Great Recession, especially in the Midwest. And in the mobile home parks themselves, vacancies increased — resulting in foreclosures on the homes owned by residents. In these vacant properties, mobile home community owners have found new opportunities.

One method to increase occupancy and profitability is for the community to own the new inventory of homes and finance them with chattel financing, or to rent to residents. By providing financing to residents, manufactured home community owners can increase the occupancies at the properties and for their entire portfolio. And, when refinancing, community owners can receive cash-out components to use toward property improvements.

By owning the homes and renting them out to residents, Mobile home community owners can increase cash flow and enhance the communal aspects of the parks, adding further value to the community and its homes.

A Pair of Examples

Here is an example: one manufactured home community management firm in 2006 needs funds to bring new and used mobile homes to some recently acquired properties in Missouri. They want to fund the acquisition of these homes and increase occupancy. The firm establishes a relationship with a bank to finance its chattel portfolio and uses other financing options for new home acquisitions. 

The increase in occupancy and value creation allowed the property to be refinanced in 2018 with a substantial cash-out component. They were able to set aside funds for additional site work and down payments for more houses. And the loan has an earn-out component in addition to being non-recourse.

In 2019, 13 years after starting the chattel finance business, the firm refinanced 800 homes with a new chattel financing agreement for $11 million to fund the acquisition of new homes, as well as the consolidation and reduction of interest rates for the entire portfolio.

Theory in Action

In our experience, these loans have been funded by a range of lenders, including agencies, CMBS, banks, and debt funds. Many of them had earn-out provisions. So, as the property cash flow increased over the loan term, some lenders would fund out cash equity to borrowers. This allows for liquidity without going through the entire refinancing of the property.

The dynamics of manufactured home community ownership are changing. This means great potential exists for savvy owners who are ready to refresh tired, less desirable properties. At the same time, these owners can provide much-needed affordable options to a housing market that’s desperate for them.

A commercial mortgage banking firm can help prepare the park and owner who don’t have a financial officer who understands these more complex financing options. A commercial mortgage firm can visit the property to ensure that it is up to the expectations of the lender, appraiser, and engineers. With full cooperation and commitment, mortgage and chattel loans can close in 45 to 75 days.

Freddie Mac Launches ‘All for Home’ to Help Aspiring Homebuyers

Home Lending Freddie Mac Headquarters

Emphasis on Education, Expertise, Solutions for Aspiring Homebuyers

Freddie Mac has launched All For Home, a new approach to its single-family affordable home lending mission.

The All for Home initiative looks to drive industry change by providing:

  • Education
  • Mortgage offerings
  • Business solutions
  • Insights to lenders and the affordable housing ecosystem

“For nearly 50 years, Freddie Mac has been making homeownership possible for millions of people who wish to purchase a home,” said Danny Gardner, senior vice president of single-family affordable lending and access to credit at Freddie Mac. “Our All For Home effort spotlights Freddie Mac’s leadership in support of its affordable mission and looks beyond today to build the future of home by facilitating better lender and partner collaboration to reduce barriers for those seeking homeownership.”

With All For Home, Freddie Mac Single-Family is working for a change to the perception of affordable home lending by providing thought leadership, educational resources and innovative, collaborative solutions to enable lenders and partners to reach more people who want to own a home.

The goal is to re-shape affordable lending and broaden understanding of opportunities to better serve borrowers.

Home lending Freddie Mac

Partnership In Place with Manufactured Housing Institute

Freddie Mac has partnered with the Manufactured Housing Institute and is working with leading manufactured home builders to expand manufactured home buying and ownership to more borrowers. The requirements for manufactured homes are designed so the mortgages purchased are originated, underwritten and serviced to help a qualified borrower buy a manufactured home they can both afford and sustain.

Freddie Mac’s Home Possible® affordable mortgage origination program during 2015 – 2018 exceeded $50 billion in home mortgages to 262,328 U.S. families.

Across the country, Freddie Mac provided homeownership and financial literacy education to 518,168 aspiring homeowners through its CreditSmart® program in 2018. In addition, it provided affordable-lending training to 32,796 loan officers and real estate professionals through outreach events last year.

Home Lending Secondary Markets Illustration

Freddie Mac Initiative focuses on four pillars

Insights

Provide best-in-class research and data on the affordable lending market and the Borrower of the Future customer base. The results will be used to advance thought leadership and industry perspectives on the future of homeownership.

Education

  • Host community-based homeownership education and outreach events
  • Provide lender and real estate professional training
  • Help housing counselors to reach and inform audiences such as millennials, women, veterans, people with disabilities, senior citizens and very low- to moderate-income borrowers

Mortgage Offerings

  • Develop additional lending and down-payment solutions for:
  • First-time homebuyers
  • Manufactured housing
  • Energy efficiency properties
  • For very low- to moderate-income borrowers

Business Solutions

Provide lenders with expanded opportunities to enable technology-driven lending processing services including:

  • Loan Product Advisor®
  • Automated Collateral Evaluation
  • Asset and Income Modeler including AIM for self-employed borrowers
  • Home Possible Sweat Equity offerings, rural offerings such as NextJob, Servicing-Released XChange℠, and Freddie Automated Servicing Transfer℠

“Through collaboration and partnership, we are working to develop and enhance solutions and technologies that allow our partners to confidently, swiftly and easily help more people achieve the dream of homeownership,” Gardner added. “There is power in anticipating future homeownership needs so that, together, our partners and lenders can make a positive impact.”

More Home Buying Initiatives On the Way

Freddie Mac will continue to launch new affordable education and lending initiatives in the coming months.

June is National Homeownership Month. Freddie Mac recognizes the critical need to address the changing dynamics in the housing market. The changing marketplace creates new challenges, which require new strategies for the realization of homeownership. Freddie Mac continues to launch new affordable education and home lending programs and is proud to prompt industry dialogue directed at solving affordability and accessibility barriers for borrowers.

Legacy Housing’s Kenny Shipley is all West Texas; Watch Out Wall Street

Kenny Shipley profile the Legacy Housing team

Kenny Shipley cowboy hat
Kenny Shipley, of Legacy Housing. All photos courtesy of Legacy Housing.

Kenny Shipley, co-founder and CEO of Legacy Housing, watched the Bedford, Texas, company he started in 2005 with Executive Chairman Curtis Hodgson go public (LEGH) in early 2019.

Some might say it’s a long road from West Texas to Wall Street. They have no idea.

That trip will take 24 hours of highway driving, if it’s all about the destination. But, if you’re Kenny Shipley, it’s about the process. It’s about trust. It’s about doing the right thing, with a “burn in your belly”. And if that’s the route you take, the travel from West Texas to Wall Street takes 14 years or more. Maybe a lifetime, if you ask Kenny.

Let’s Start with the ‘World Famous Pecos Cantaloupe’

Shipley has done quite a few things in his life, including sell plenty of homes. However, before there were homes to sell, there was a ripe West Texas melon travelers would take a U-turn to obtain.

Shipley and his brothers, Billy and Doug, would make the three-hour ride to Pecos, Texas, for no other reason than to load up on whole, locally grown fresh cantaloupe. It’s a sensitive crop, and timing was everything, he said.

“In Pecos, it’s such a dry, sandy heat, and they just grow so sweet,” Shipley explains, as if he’s tasting a cantaloupe in the very moment he’s talking about it. “They are delicious, and you can see it. They’re bright orange.

“You needed to pick them at just the right time. Not too early, and you can’t keep ’em on the vine in the heat. We had it down.”

The sign they rigged up on route 114 to Lubbock read “Pecos Cantaloupe. World Famous”. They’d sell them out of the back of the truck. Then, in the heat of the day or when restlessness took over, the trio and whatever friends they could recruit would take the melons to local markets. Shipley would even take the juicy treasures door-to-door throughout his hometown of Levelland, population 8,000 at the time, 30 miles west from Lubbock.

“I’d take a cut of cantaloupe door-to-door,” Kenny Shipley said. “‘Taste this, they’re world famous’. People would say, ‘Man that’s good’. We’d sell two for a dollar. We’d load up that truck from Pecos for six cents a pound, so we did OK.”

Kenny Shipley profile Fort Worth Legacy Housing plant
The Legacy Housing factory in Forth Worth, Texas.

‘Everything We Got, We Worked For’

“My dad taught us how to be entrepreneurs, and we were always hustling,” Shipley said of he and his siblings.

He said not one of them has ever filled out a W-2 in their lives. They worked for themselves, they worked hard, and they made money.

“We ran gasoline stations for a bit when we were right out of high school,” he said.

“We’d buy used batteries for $1, and put them all on a train charger. It charges 10 batteries at a time,” he said. “We’d charge them for a couple hours and see if any of them held a charge, and spray them and clean them up to look like new. We’d sell the good ones for $19.95, and the others we’d sell for junk at $5.”

They’d also buy imported wristwatches for $1.75 and sell at the gas station for $20. Like anything else, you’d keep some of the profit and put the rest back in the business. Or a business, whatever made sense.

Their father was in the car business, so Kenny and his brothers always had a few lessons to lean on as they built their own ventures.

“We didn’t have a lot, but it could have been a lot worse,” he said.

The Shipleys moved to Levelland from a town that was just a little smaller. He said West Texas was a fun place to grow up, a safe place where kids could be kids.

“We had two pool halls, a roller rink, two movie theaters, a drive-up theater, two city swimming pools… You knew everyone in the area, and we always would hang out in our garage because we had a pool table,” Shipley said. “We didn’t have a door key for our house. We’d go out of town for three or four days and just leave it open. It was that kind of town.”

They’d have football games with 25 people on each side. They rode bicycles everywhere.

“Of course, there were no computers or video games, so if you wanted to have fun you had to go outside. And I’m grateful for that,” Shipley said.

Legacy Housing co-founders Curt Hodgson and Kenny Shipley with former Dallas Cowboys defensive tackle Randy White, center, who was a spokesman for Legacy Housing for several years.

When It Comes to Housing

Shipley and his brothers had been dabbling in manufactured housing for a few years at the time they went in together and started a retail business. Bell Mobile Homes in Levelland has been operating for 38 years now.

“When I got in, the industry was moving 300,000 homes, and interest rates were 23 percent,” Shipley said. “I was doing 23 percent loans through GE Credit.”

But times would change, and fast, particularly in West Texas.

Shipley and Hodgson crossed paths in the mid-’80s. They were both buying repossessed homes and selling them, including to other retailers.

The manufactured housing business was down-trending from the peak years of the 1970s. To further distress the Texas market, oil by the barrel was way down, to $8 per barrel in the mid-’70s. There was a massive effect on the labor market, which particularly affected housing.

Banks went under in droves. Any area MH financing was in operation was east of Interstate 35.

“West Texas was cut off,” Shipley said. “There were no finance companies doing business west of I-35.

“For us to survive, we would get bank financing or sell ’em for cash. I met Curt (Hodgson), and we were competing for many houses,” he said. “One day we kind of started buying and selling to each other, and we slowly started partnering up on a pile of houses.”

Hodgson was in retail and running auctions, and Shipley would enter his homes in the auction. They ran that way for two decades, working hard and making ends meet.

Legacy Housing Fact Box

  • Legacy went public in February 2019
  • Has three manufacturing facilities, including its original in Fort Worth
  • It is the fourth largest builder of manufactured homes in the U.S.
  • Offers customers 70 floor plans, including tiny homes
  • Delivers to 14 states from the Southwest to Southeast

Kenny Shipley profile Legacy Housing welder
A welder at Legacy Housing works on the chassis of a new home.

A Little Bit Closer to Wall Street

The pair had purchased and sold enough homes, and built enough relationships, that eventually the two entrepreneurs came around to talking about building their own homes. They had the experience, the work ethic and enough capital resources to make it happen. They only needed to formalize a plan.

“We didn’t even have a contract or official partnership, not until we started Legacy,” Kenny Shipley said. “That was the first time we signed anything. We had bought a Cavalier plant. We were already buying inventory at that point. Floorplanning inventory, that’s how we got started.

“We had 40 guys doing business with us,” he added. “They had sales centers, and they believed in us. Then we started building homes, too.”

Initially, the pair wanted to keep the homes “low end”. The idea was to keep them basic to build and simple to sell. They had one 16×60’ floor plan they built for the first 90 days. Then they added in a 16×80’ that brought them out to about six months in business. After that, they started building and selling double wides.

“We built it organically,” Shipley said. “We build our own roof trusses, we laminate our sheetrock. And we profile our trim. We’ve done a good job of taking the middlemen out of what we do. And we’ve had to do that to compete with the big boys. We go to China to do our own importing. Our product is the same product because we were already buying from China, we just cut the middleman out who was taking 25-30 percent.”

The pair, and their team at Legacy Housing, which now numbers more than 800 employees, built the business up well enough and continue to have strong enough confidence in their product to have started their own retail finance program.

“We’re not the answer to everyone’s prayers, so there’s still that need for the other lenders, but we have our niche,” Shipley said. “We build the widest floor, the highest roof. We deliver the most bang for the buck for the consumer, kind of like that Pecos cantaloupe.”

Kenny Shipley profile roof trusses
Roof trusses built in the Legacy Housing plant.

Focus on the Best Product, and Build a Network

As much as he loves building homes, Shipley still has a soft spot for the retail end of the business: the independent retailer, the entrepreneur.

“It’s a gamble every day when you wake up and have no idea where your dollar is coming from. That’s the case with our network, from Colorado to Kansas to Florida,” he said. “We love the independent guys. That’s what built America.”

Shipley said he and Hodgson agree, they cannot think of any two industry professionals who have created more business by setting up independent dealers. Legacy Housing currently operates through an independent dealer network of better than 100 retailers.

“I truly believe we’ve put more people in business than anyone else. We’re always going to support independent dealers. Those are the guys we want to do business with,” he said.

“Anyone can have a sales center and make money. You need to have that burn in your belly. If you don’t, you probably can’t, but if you have that dream and the burn in your belly, you’re going to do it.”

Where Ya Headed?

Shipley and others at Legacy Housing are asked quite often if the manufactured housing industry can reach its peak sales volume again. More than 400,000 homes shipped in a year? That’s more than quadruple the current production, in an industry already on an assertive upward trajectory.

“I don’t think so,” Shipley says, hesitantly. “Too many independents left, and not too many are getting back into it. There are no families getting in, and of course there are families aging out.”

True, the housing crisis and credit crunch pushed droves of traditional retailers out of business. Which leaves factories with fewer places to send homes and buyers with less obvious places to shop. Much of the sales recovery in the industry has come through community operators that now sell homes as well.

Take note, though, Kenny Shipley still hands out his business card. “I can help” is what it says, right beside his cell phone number.

In the meantime, Legacy is pleased to build its own business, and continue its own, well, legacy.

If Not by Road, Then By Air (or Heir)

Kenny Shipley’s always working. Checking on retailers. Walking the floor. Responding to sometimes 80 phone calls a day. But he still lives in Levelland, now population 13,000 or so. It’s 275 miles by air to the original factory in Fort Worth.

“I’m a pilot,” Shipley states.

He has been flying since the age of 17; earned his license at about 20 years old. He took a long number of years off when his children were young, but bought an airplane in the mid-’90s. He’s been flying to the plant two, three times a week ever since.

“We both fly a Meridian jet prop,” Kenny Shipley said of himself and Hodgson. “His is blue, mine’s red.”

They’re personal planes, Shipley’s quick to point out. The company didn’t buy them. They’ve always kept a low profile, he said, and particularly so now.

“We’re working with shareholder money now, and we consider our shareholders as partners,” he said. “We are going to treat their money like it’s our money. We’re not going to be frivolous.”

Kenny Shipley’s son, Ken, followed him into the family business. Ken started at age 16 in the setup department. A decade later he leads sales.

“He’s a better salesman than I was,” Shipley admitted. “He’s a natural.”

Now that’s a legacy.

Datacomp Publishes JLT Rent, Occupancy for Iowa, Neb., S.C., Va., Manufactured Home Communities

JLT Market Reports alabama georgia manufactured home communities
Manufactured Home Community

JLT Market Reports Available for Immediate Download

Datacomp has published its June 2019 manufactured home community rent and occupancy reports for Iowa, Nebraska, South Carolina, and Virginia.

JLT Market Reports provide detailed research and information on communities in nearly 170 major housing markets throughout the United States. These include the latest rent trends and statistics, marketing programs and a variety of other useful management insights.

Datacomp publishes the JLT Market Reports and is the nation’s #1 provider of market data for the manufactured housing industry. JLT Market Reports are recognized as the industry standard for manufactured home community market analysis.

June 2019 manufactured housing market data published in JLT Market Reports for Iowa, Nebraska, South Carolina, and Virginia include information on 187 “All ages” and “55+” manufactured home communities.

Altogether, the reports on the four states’ manufactured home communities include data representations for 33,128 homesites.

“The four states represented in the June 2019 publication of the JLT Market Reports are recording growth in occupancy and average adjusted rent across the board, with one small exception for a static occupancy rate among retirement communities in one South Carolina market,” Datacomp Co-President and Chief Business Development Officer Darren Krolewski said.

More About JLT Market Reports

Each JLT Report from Datacomp has detailed information about investment grade communities in the major markets. The detailed information includes:

  • Number of homesites
  • Occupancy rates
  • Average community rents, and increases
  • Community amenities
  • Vacant lots
  • Repossessed and inventory homes, and much more

Our reports also include management insights that rank communities by number of homesites, occupancy rates and highest to lowest rents. Established reports show trends in each market with a comparison of June 2019 rents and occupancy rates to June 2018, as well as a historical recap of rents and occupancy from 1996 to present date in most markets.

The June 2019 JLT Market Reports for Iowa, Nebraska, South Carolina and Virginia manufactured home communities are available for purchase and immediate download online at the Datacomp JLT Market Report website, or they may be ordered by phone in electronic or printed editions at (800) 588-5426.

Each fully updated report for mobile home communities is a comprehensive look at investment grade properties within a market, enabling owners and managers, lenders, appraisers, brokers and other organizations to effectively benchmark those communities and make informed decisions.

UltraX Drywall Tape Withstands the Rigors of Manufactured Home Transportation

Self-Adhesive Drywall Tape
UltraX from Saint-Gobain ADFORS applies to drywall in manufactured homes.

First-Of-Its-Kind Drywall Tape from Saint-Gobain ADFORS is Designed for the Unique Requirements of Manufactured and Modular Home Construction

UltraX is a self-adhesive drywall tape developed specifically for the transportation requirements of manufactured and modular home construction.  

According to the manufacturer, Saint-Gobain ADFORS, UltraX does more than hide drywall joints. It also reinforces them to better withstand the forces encountered by the completed home during transportation.

UltraX employs a patented multi-directional design that protects drywall joints from the unavoidable lateral movements and shifting that manufactured and modular homes are subject to in transport. UltraX is 60 percent stronger than traditional mesh drywall tapes, according to the company. The tape will help to reduce wall repairs after delivery of modular and manufactured homes.

The self-adhesive feature saves time on both application and drying. By eliminating the need for a pre-bedding coat, joints dry more quickly and are less subject to the bubbles and blisters common with paper drywall tape.

Saint-Gobain’s product is also wider than traditional drywall tapes, which contributes to better gap coverage and better stress distribution. UltraX is 2 3/8 inches wide; the common measurement is 1 7/8.

Saint-Gobain ADFORS markets UltraX to drywall suppliers in earthquake zones, in addition to the manufactured housing industry.

ADFORS Stands for ‘Added Reinforcement’

For more than 50 years, Saint-Gobain ADFORS has focused on what it terms “technical textiles”. ADFORS invented mesh drywall tape in 1965 and revolutionized the drywall tape market with the FibaTape brand. The company offers a variety of application-specific and premium drywall tapes throughout the world.

Headquartered in Grand Island, N.Y., Saint-Gobain ADFORS is a division of the Paris-based Saint-Gobain Group. 

Created by Louis XIV in 1665 to compete for a share of the increasingly popular mirror glass trade, Saint-Gobain has evolved over the past 350 years from a simple glassworks to a vertically integrated multinational with annual revenues exceeding $44 billion. The Saint-Gobain Group operates in 66 countries.

The 7 Deadly Sins of Marketing Manufactured Homes

The 7 Deadly Sins of Marketing Manufactured Homes

There is no shortage of tips, tricks and hacks to help you squeeze every ounce of opportunity out of your mobile home marketing efforts.

But, while everyone is flocking to the latest marketing fad, important fundamentals often can get overlooked.

Whether you’re a retailer, community owner/operator or supplier to the industry, making a mistake in these marketing fundamentals will undermine results and waste your money.

After more than 20 years of helping national, regional and local organizations improve their marketing, there are seven core elements I’ve seen neglected repeatedly.

Seven marketing “sins” that can kill results and spoil sales opportunities.

Marketing Sin #1: Ineffective Signage

If you’re a retailer or community owner/operator, a portion of your annual sales depends on drive-by traffic.

So, it’s important to have signage that is capable of catching people’s attention. From not having enough signage to poorly designed signs, any mistake in this area will reduce the number of sales leads you attract.

Signage that is unreadable from a distance while traveling at posted highway speeds is one of the biggest mistakes I see companies make.

The design, typestyle, and colors you choose for your signs impact how effective they will be as a marketing tool.

Potential customers must be able to read your sign in one second or less as they drive down the road.

Think about your drive into work this morning. How many signs did you glance at, and how many did you spend time reading?

If you’re like most people, you barely pay attention to business signs as you drive, because your mind is occupied with other matters.

Customers must be able to read your sign in one second or less as they drive at posted speeds. The signs for the hotels on the right side of the photo above are barely legible from a distance when standing still, and are impossible to read at the posted speed of 45 mph.

It’s the same for your customers. They’re flying down the road, rushing through their day.

So, you need to help them see you.

Make sure your signage is free of any object that would obstruct the ability to read it, and choose high-contrast colors for your signs to improve their visibility and readability.

Also, pick a color that contrasts well with the sign’s surroundings to help it stand out. Color selection can make your sign highly visible, or muddled and impossible to read.

Finally, when selecting typestyles for your sign, choose a font that is appropriate for the location.

On busy roads or highways with posted speeds above 35 mph, thick, bold type will be needed. The thicker type will make it easier for drivers to read your sign at a glance as they travel at posted speeds.

Pro tip: the font “Frutiger” was designed for airport signage as a typeface that is clear and easy to read from a distance, making it an ideal choice for signs.

Marketing Sin #2: Websites that Don’t Convert

Much like a sign’s job is to capture leads from drive-by traffic, the purpose of your website is to capture sales leads from internet traffic.

A well-designed, conversion-optimized mobile home website can generate a consistent flow of sales leads reliably every month. If that’s not happening for you, it’s time to fire your website and get a new one.

Let’s start with the way your website looks.

How important is the visual appeal?

According to research by Carleton University, visitors decide if they like your website or not within the first 1/20th of a second of landing on it. And that decision determines if they stay on your site or leave.

Further studies by Stanford show that 75 percent of consumers make a judgment about a company’s credibility based on the design of their website.

So, the visual appeal of your site has a direct connection to how effective it will be as a source of new sales leads.

Your mobile home website is the virtual doorway to your business

Beyond visual appearance, other factors can sabotage your site’s effectiveness.

Technical issues like slow website loading speeds, images that do not load correctly, or features that do not work will cause website visitors to leave.

And once they have a bad experience on your website, 88 percent of them will never return, according to a 2010 study published by econsultancy.com.

Even when your website looks great and is functioning at peak efficiency, there are things you can do to improve the number of conversions you get.

Some of them, like placing your phone number in the top-right corner of your site, are simple adjustments that produce immediate results.

Another excellent technique for improving results from your website is to use social proof.

Social proof is evidence from past customers that doing business with you will be a good experience.

By adding testimonials or reviews to your website, you’re adding social proof. But if you choose to add testimonials to your site, be sure to follow FTC rules for the use of endorsements and testimonials in advertising.

Another option for social proof is software that displays a small pop-up in the corner of your website, showing visitors that other people are filling out your online forms, which encourages them to do the same.

Regardless of how you do it, adding social proof helps reassure potential buyers and builds trust.

Your website is the virtual doorway to your business. It is the physical, albeit digital, location of your business online.

So, put as much care and attention into your website as you do your actual sales center, lobby, or any other customer-facing area of your business.

Marketing Sin #3: Poor Online Visibility

It’s no secret that the internet is the dominant media platform worldwide.

According to research firm BIA Advisory Services, 97 percent of consumers use the internet to find local businesses. 72 percent visited a company within five miles after doing a local search online, according to a 2016 study done by Wordstream.

Having a well-planned online marketing strategy is the key to generating a predictable flow of new sales leads every month.

There are six components to a well-balanced online marketing strategy. They are advertising, search visibility, reputation, social presence, your website, and a tracking and follow-up system.

Let’s start with how visible you are online.

marketing mobile homes online

Getting found on search engines like Google is a complex mix of content, technical factors, and optimization that all affect your position in search results. However, there are simple steps you can take to improve your chances of being found.

First, make sure your business name, address and phone number are correct and consistent anywhere they are listed online. Those online listings should exactly match the name, address and phone number on your website.

Also, while you’re checking your business listings online, remember to check how your business is listed in Google. You can do this by searching your business or community name and looking at what appears to the right of the search results.

If you see a box of information about your business, you have an existing Google My Business listing that you should check and update if necessary. However, if no information box appears when you search your name, then you need to create a Google My Business listing.

Increasing your visibility online includes having a presence on well-established, industry-related websites like MHVillage.com, where a lot of potential buyers spend time searching for homes.

Advertising in places that are already hot spots for buyers is a great way to get seen. And it’s an effective way to generate qualified sales leads as well.

How you appear in search results is only one aspect of online marketing.

Advertising, email marketing, having a well-managed social media presence, and video marketing also should be tools you regularly use to attract as many sales leads as possible.

Marketing Sin #4: Ignoring Reputation Management

Online reviews are becoming more influential in the buying process every year.

In 2017, Spiegel Research Center found that 95 percent of consumers check online reviews before making a purchase. Also, they discovered showing reviews for higher-priced products can increase your conversion rate by as much as 380 percent.

Reputation management is an area of online marketing that has the most significant impact on results because it is so influential in the sales process.

According to a 2017 study published by BrightLocal, 77 percent of consumers ignore online reviews posted more than three months ago. So even if you have excellent reviews, you still need to be proactive about acquiring more.

online reviews for advertising mobile homes

Also, if you have no reviews at all or more negative reviews than positive ones, doing nothing becomes even more detrimental. In 2016, ReviewTracker found that negative reviews drive customers away 94 percent of the time.

That same year, research by Fan and Fuel found that having no reviews caused 92 percent of consumers to hesitate on a purchase decision or delay it completely.

With online reviews, how you treat and respond to customers is on display for thousands of potential buyers to see. So, monitoring and improving your online reputation is one of the most powerful steps you can take to increase sales.

Marketing Sin #5: Not Tracking Results

One of the most common mistakes I’ve seen throughout my career is companies that have no system in place for tracking the results of their marketing.

Knowing which marketing vehicles are producing results, and which ones are not, reduces wasted advertising dollars.

It also helps you maximize your return on investment by showing you where the results are coming from, so you can shift your budget accordingly.

There are lots of ways to track results, including options that are automated.

For example, using call tracking numbers, like mhvDirect™, in the advertisements you run will give you a measurement of how many calls your ad generated, and will even let you record the calls for training purposes.

For walk-in traffic, you need to develop an internal process for registering visitors and collecting their information for future follow-up and marketing campaigns.

Track your manufactured home marketing to avoid wasting advertising budget

Installing Google Analytics will help you keep track of where the traffic to your website originates.

And tools like HotJar will show you what parts of your website people are clicking and record videos of people using your site, so you know how to improve it for better results.

Tracking the results of your marketing and making the necessary adjustments is what determines if your marketing is wasting money or making money, and prevents you from wasting homebuyer sales leads.

With a conversion-optimized campaign, every dollar you invest in online marketing should generate at least two dollars in return, doubling your investment.

Marketing Sin #6: Bad Brand Experiences

What kind of experience do prospective buyers have from sales introduction and first impression to the time they are no longer a customer? And how is that experience shaping their purchasing decision?

Many well-known elements go into a buyer’s experience with your brand, like how your sales staff greets visitors to your customer service policies.

However, the experience they have also is shaped by intangible details that trigger psychological responses and affect buying decisions.

For example, colors create both psychological and physical responses that can enhance or sabotage your brand.

The color blue, for instance, has been proven to reduce appetite. So, it would not be the right color for restaurant décor.

Other subtle elements that affect the buyer’s experience include common-sense things like, did your staff answer the phone when they called or did it go to voicemail?

Is your staff using paperwork and sales literature that is a copy of a bad photocopy? Or do they have professional-looking collateral that reinforces the buyer’s trust?

Selling mobile homes is easier when models ar decorated in a warm inviting style.
Are your model homes properly staged with inviting and purposeful interior design? Photo courtesy of Skyline Champion Corporation.

Are your model homes properly staged with inviting and purposeful interior design? Or is it a cold, empty shell that does not help the buyer picture themselves living there?

Also, is your office or sales center just a place to do paperwork? Or is it well-designed, with thoughtful point-of-sale displays that support your sales efforts with carefully planned visuals?

All of these factors come together in the buyer’s mind, and cause them to form opinions that affect their purchase decision: Do I like this salesperson? Will this home fit my family’s needs? Am I getting a good deal? Do I feel comfortable doing business with this company, or should I keep looking?

Marketing Sin #7: Lack of Follow-Up

After the initial contact with a customer, the real work of earning their business begins. Only a small percentage of potential buyers will make a purchase the first time they contact you.

It takes a structured sales follow-up process to engage more buyers and increase your sales conversion rate.

First, you need a defined process. Choose one that is easy to implement, and is used by everyone involved in the sales cycle.

Planning out the process is essential because it ensures consistency. It also helps you control the timing of follow-ups, so they build rapport instead of harassing prospects.

Photo of woman making follow up calls to sell mobile homes

Like tracking marketing results, the sales follow-up process is often overlooked or poorly implemented.

A quick web search reveals many studies that say a sale is made only after five to 12 follow-up attempts. However, according to InsideSales.com, most salespeople give up after just two contacts.

And data collected by YesWare shows that 70 percent of salespeople stop after sending one email.

Persistence and patience are the keys to unlocking the results a good sales follow-up system can deliver.

The Devil is in The Details

Getting the details right in these seven fundamental areas of marketing manufactured homes will give you a solid foundation for results.

So, while everyone else is chasing marketing fads that ebb and flow with the tide of social media, give yourself a competitive advantage by doing the basics your competition ignores.

It’s an easy way to increase results without increasing your marketing budget.

EVENTS

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