We Know When You Attend the 2019 Louisville Manufactured Housing Show Jan. 30 – Feb. 1, You’ll Need Some Places to Take Your Clients. Here Are a Few Tips!
Why not grab your favorite clients and take them to one of these Louisville hot spots to eat and drink in downtown? From the Crowne Plaza, most spots are just an 8- to 13-minute drive.
A remote worker gets a cup of coffee and completes a few quick tasks. All photos courtesy of the Louisville Tourism.
Daytime Excursions to Louisville Hot Spots
Grab coffee or brunch before your day of exploration, or step out for a lunch break at one of these loved locations.
Quills Coffee Firehouse: Strongest coffee and tea in the city, say reviewers. Delicious pastries as well — try their homemade take on Poptarts!
Highland Coffee Co.: Try their vegan chocolate mini bundt cakes, on-tap kombucha or something off their classic coffee menu.
Harvest Restaurant: Open in the mornings only on weekends, this popular spot — called “eclectic” by reviewers — features stratas (breakfast casseroles), smoked pork belly and pretzel croissants.
Wild Eggs: An open and friendly space featuring daily grits specials, pomegranate mimosas and classics old and new. Reviewers say any wait is worth it.
The Café: An enchanting and tucked-away gem. Great for a classic, hot and affordable breakfast or lunch — try their cake!
Louisville Hot Spots for Small Group Networking
Bourbon, especially in an Old Fashioned, is the classic drink in Louisville. You’ll miss out if you don’t have a taste. But Louisville’s drink scene is actually quite diverse. Anyone for a Mint Julep or Kentucky Mule?
Plan a VIP reception, or just stop in, at Down One Bourbon Bar.
No matter your drink choice, try toasting your client at one of these hot spots:
Down One Bourbon Bar & Restaurant: Alongside classic, affordable American fare, this bar features over 160 bourbons. You’re bound to find something you’ll like. A quick walk from Doc Crow’s, you could stop by both to check off two spots on your “Urban Bourbon” tour.
Buck’s Restaurant & Bar: A little more upscale, this spot is covered in flowers. Perfect for showing your client a bit of “old world” class.
Galaxie Bar: Tacos, craft cocktails or beer more up your alley? This spot features global-inspired fare, Wednesday night trivia and weekend dancing.
Holy Grale: Housed in an old church, this spot serves up beers from around the world, prioritizing local fare and a community atmosphere.
Volare is a classic fine dining hot spot in Louisville.
For a Big Night in Louisville
Want to host a party or presentation in a larger space? Need a restaurant that easily accommodates large groups? These Louisville hot spots fit the bill.
Volare Italian Ristorante: Elegant, cozy, perfect ambiance — oh and the food is some of the best Italian fare you’ll experience, according to reviews. Call ahead and it should be easy to reserve a spot for a larger group.
Havana Rumba & Tapas Bar: Plenty of tapas, cheap margaritas and specialties such as bacon-wrapped dates. With Monday night’s half-off tapas deal, you can’t go wrong with this place. Call ahead to reserve a spot for a larger group.
Lilly’s Bistro: Offering seasonal fare and handpicked cocktails, this spot is perfect for a party of 20 or fewer. Contact Jeff to plan your menu and reserve the back room.
Proof on Main: Inside Louisville’s 21c Art Museum and Hotel, this restaurant also features locally sourced fare. A variety of conference rooms can fit parties of 10 to 400. Your clients can enjoy art, artisan cocktails and, of course, bourbon.
The Wine Studio: Give your clients an immersive experience by renting this unique spot. Guests can network on the patio attended by a wine steward and watch a chef prepare their meals (menu chosen by you). Call 502-636-0783 for more info.
Residents at an Equity LifeStyle Properties waterfront community in Florida enjoy the amenities.
Resident Relations Start With Firm But Personal Approach, MH Pros say
Hand-written “thank you” letters. Free cable and internet. Streetlights. New entrance signs. Landscaping. Those are just a few ideas community owners can use to build positive relationships with residents.
The MHInsider revisited several conversations it engaged in during 2018 to provide readers with a professional perspective on resident relations in manufactured home communities.
Amy McMahan, co-owner of Stoneoaks, a manufactured housing community in Longview, Texas, talked about the importance of building relationships.
“When your tenants feel worthy, there’s no end to what they’ll do for you,” she said.
East Fork Crossing is a Sun Communities property in Batavia, Ohio.
Face-to-Face Conversations Can Save the Day
Just talking to a resident in person can make a world of difference, McMahan said. She used a story to illustrate her point.
Shortly after she and her partners bought Stoneoaks, McMahan noticed a resident who parked his “ugly” truck and trailer in his front yard, a violation of the community’s bylaws. McMahan said, with a touch of humor, that the resident was a bit “mean-looking.” The man was hardly ever seen. And he seemed unapproachable when he was out in the community, she said.
McMahan could have sent the man a letter or simply fined him for violating the park’s bylaws. But she was a new owner and wanted to establish good relations with her residents. So, she decided to just walk up and ask him nicely to park his truck behind his house.
His initial reaction was a “little bit Scroogy,” she said. However, by the end of the conversation he had agreed to move his vehicle. He hasn’t parked in his front yard since, she said.
“He surprised me, he was so willing to do what I asked,” McMahan said. “You get more with sugar than you do with lemon.”
Provide Residents the Chance to Make Positive Change
Another resident had a “ratty” chicken coop fence that was disallowed.
“I could have fined them immediately,” she said, but “since we were the new sheriff in town, we didn’t want to make enemies.”
McMahan simply walked up to the residents, told them the fence violated the park’s bylaws, and they took it down that day.
“It’s how you approach them,” McMahan said.
An impersonal or derogatory approach can backfire. Fining residents can be a hassle. But if you ask them nicely to comply, and they see that you’re trying to improve the look of their community, they’re much more likely to fall in line, she said.
“It saves money, the park looks better and, most importantly, you improve your relationships with your people,” McMahan said.
Residents at The Hamptons, a Sun Communities’ property in Auburndale, Fla., play bocce and pickleball.
Equity LifeStyle Properties Holds Quarterly Meetings with Residents
Equity LifeStyle Properties’ Ron Bunce and Bruce Thelen of Sun Communities discussed building relationships from the perspective of corporate community managers.
Bunce, a senior vice president with Equity LifeStyle Properties, said no matter the size of the community, the manager must be visible and approachable. Annual training programs help Equity Lifestyle managers hone their resident-relations skills.
In disputes among residents, the manager must be a neutral mediator, unless there’s a blatant rule violation by one side. Equity LifeStyle Properties asks its regional managers to meet at least quarterly with resident groups to update the latest plans to pave a road, fix a pool or put a new roof on a building, for instance. Residents appreciate being kept in the loop, Bunce said.
If a resident gets upset or feels their issue is being improperly addressed by a manager, they can call the Equity LifeStyle Properties’ regional office. If they’re still unhappy, they can call the national office.
“Sometimes, they just get frustrated,” Bunce said. “We give them an outlet to address their concerns.”
Equity Lifestyle residents at an Arizona resort hit the pool. Photo courtesy of ELS.
Managing Community Reputation on Social Media
Another outlet that’s growing by leaps and bounds is social media. But that can be a double-edged sword.
Praise and complaints travel quickly on social media outlets, which require constant monitoring.
Equity LifeStyle Properties employs a team to do so. The team makes decisions about comments made on Equity Lifestyle Properties community sites. They may be selective as to which comments get a response, but all comments are reviewed and taken seriously, Bunce said.
In general, the quicker the response to a social media post, the more effective the response will be. Most problems can be solved by simply reaching out to the person who posted a comment. Let them know they’re being heard, he said.
On the other hand, if a customer says something favorable about an Equity Lifestyle Properties community, the company encourages them share the comment online. Positive feedback on sites like TripAdvisor, Travelzoo and Google can make a community’s reputation. Equity Lifestyle Properties constantly monitors its ratings on these sites, Bunce said.
Sun Communities Works Together with Residents on Conflict Resolution
Bruce Thelen, a senior vice president with Sun Communities, said his company monitors social media posts about its communities. Sun Communities’ policy aligns with the general online consensus that negative comments should not be removed, but should be responded to as quickly as possible.
Offline, Sun Communities requires every one of its community managers to have at least three contacts per day with residents — either in the office or by knocking on doors. An emphasis in the Sun Communities training sessions is placed on making employees comfortable having difficult conversations with residents. As a way to improve the focus on customer relations, Sun Communities’ regional managers will ask community managers about their most difficult resident, knock on that resident’s door and ask them what’s wrong. Simply having a conversation can often be enough to satisfy the resident, Thelen said.
He gave an example of a difficult conversation that led to a positive outcome. At one of Sun Communities’ RV resorts, an annual guest had a golf cart painted like the General Lee, the car from the 1970s-80s TV show “The Dukes of Hazzard” — right down to the Confederate flag. Other residents, offended by the open display of the Confederate flag, expressed concern to management.
The managers decided on a direct approach. They told the golf cart owner about the situation, which seemed to surprise him. He just liked “The Dukes of Hazzard”. The managers offered to pay for a new paint job — replacing the Confederate flag with the American flag — and the owner agreed.
“When addressed directly, in a respectful manner, the solution was simple,” Thelen said.
MHInsider Magazine for manufactured housing professionals.
Bi-Monthly Circulation, Hiring of New Managing Editor Expands MHInsider Coverage of Manufactured Housing
MHVillage, the nation’s number one marketplace for manufactured housing, has announced two big changes to its industry trade publication for manufactured housing news, The MHInsider magazine. Starting in 2019, the company will publish six print issues per year.
The MHInsider also has hired a new managing editor, Matt Milkovich. Milkovich had served as managing editor for a pair of agriculture industry trade publications for many years.
MHInsider’s previous managing editor, Patrick Revere, will continue working with the magazine as executive editor. Additionally, he will serve as director of content for all MHVillage publications.
The MHInsider Magazine, Powered by MHVillage
MHVillage assists consumers in finding mobile homes for sale. Each year, MHVillage.com registers approximately 25 million unique visitors. Furthermore, the website in 2017 boasted 148 million page views. The platform created more than $3 billion in home sales and rentals in that year alone. MHVillage provides many services to consumers and professionals including resources for those in the areas of home building, retail, community management, brokerage, investment and finance.
The goal of MHInsider is to create an industry-positive and informative medium that strikes a balance between feature profiles, industry trends and the latest news. The magazine is a companion publication to the MHInsider blog for professionals. We update the blog on a regular basis to provide the latest industry news and trends for manufactured housing professionals.
In addition to staff contributions, each edition of MHInsider magazine includes news and information by leading industry sources. This includes contributions by writers from the Manufactured Housing Institute, Fannie Mae, Freddie Mac and more.
The MHInsider magazine was created in part to fill an industry void. Prior to its launch in January 2018, the manufactured housing industry had been without a print trade publication. The last industry journal discontinued publication in December 2016.
Readers can sign up at MHInsider.com to receive the print magazine in the mail, as well as read an electronic version of the magazine and sign up for the newsletter.
A feature story on new development printed in the 2018 Tunica Show Special Edition.
Most Customers Ask About Rates, But Are More Concerned with Monthly Payment
Ken Rishel, Rishel Consulting Group
One of the topics that often comes up when discussing captive or outside financing of manufactured homes is interest rates. The lament especially with outside lenders is “If the lender’s interest rates weren’t so high, we could sell more homes”.
One of my best friends in the industry harped on that over the years. And I have heard that from many others, including in discussion of where captive finance rates should be set.
However, nothing is farther from the truth, especially in these post Dodd-Frank Act days, with the limits now set as low as they are.
‘What Is My Monthly Payment?’
I think this idea stems from seeing the deal through the eyes of the owners rather than through the eyes of the customer. Certainly, if most of us were to encounter double-digit interest rate offers on a personal mortgage, we would run from it. But the great majority of our customers are very different. Unless a retailer is selling to five-star customers, the average customer is not emotionally invested in the interest rate itself.
However, they are very invested in the payment being offered to them. The payment will make or break a deal every time. Give them a payment they feel comfortable with, and the interest rate will not matter very much.
Given that strong statement, there needs to be considerable explanation of the concept. It is true that many customers ask about interest rates. This, in part, is because they have been taught they should ask. The reality is they care only because they have been told they should care. The real emotional involvement is more tied to an affordable payment.
There are a number of ways sales personnel and MLOs for the finance company can successfully mitigate any concerns about interest rates for a potential buyer in search of a home. We will touch on some of these later in the article.
Look At How Term Affects Payment
It is true: The higher the interest rate, the higher the payment for the same term. So, this could appear to be self-defeating. However, such a premise ignores the role term plays in those numbers.
One of the very real impediments is the unrealistic terms that are offered by many of the outside lenders and some of the captive lenders.
In some areas of the country, an older single-family site-built home of 1,200 square feet can be purchased for as little as $75,000, including the land. That, in and of itself, presents a challenge to the 16’x 80’ new home in a community sale. Add to that the credit-worthy buyer is normally offered a 30-year mortgage on the site-built home. This scenario often makes it difficult to compete.
The question that should be asked is: If site-built mortgages can be 30-year mortgages, why can’t manufactured homes chattel loans also be 30-year mortgages? The answer is: They can be. That, of course, creates the question as to why they aren’t, and the answer to that is superstition.
What Does The Data Say?
Superstition is the correct term. Far too many people base their loan underwriting on belief rather than facts. Government regulatory agencies demand written lending policies and credit matrices based on factual information. Yet, many non-depository lenders still make decisions based on beliefs rather than historical data. Worse, many of those beliefs directly contradict real facts and historical data.
There is no provable data that would indicate that longer lending terms on single homes at least 16’x 80’, or multi-section homes less than 10 years old from a reputable manufacturer, affect the overall risk of making the loan. Our historical lending data on this is considerable. In fact, there has been at least one regional lender routinely making 30-year loans for over 20 years without undue non-performance.
That does not mean that every loan should be based on 30-year terms. There are factors that must be considered and balanced.
Following are a few other factors to consider and balance
Incorporate credit quality
Percentage of down-payment
Location and quality of collateral
Size of loan
Once the proper underwriting has been done, many of the loans can be considered for longer terms, which opens more opportunities.
As an example, using many current loan terms on a $50,000 loan, at 15 years the payment would be $537.50. At 20 years, the same loan would have a payment of $482.51. At 30 years, the payment would be $438.79. That is almost $100 per month less, which may make the affordability possible without adjusting the interest rate.
A Longer Term Can Keep Potential Buyers in the Market
As long as extending the term does not also increase the risk, longer terms are a valuable solution to the problem of higher interest rates. One of the reasons why the longer terms work is because the borrower often is offered an affordable payment. Given a choice between making a loan with a 43 percent debt-to-income (DTI) at 15 years and making a 20-year loan at 28 percent DTI, if other underwriting factors are right, the 20-year loan will be less risky.
So, the higher interest rates are easier to deal with because the longer term creates a payment the prospective borrower finds desirable. Often it is more desirable than payments being offered on a site-built home, despite the higher interest rates. This, in part, is because the site-built home purchase price includes the land purchase. Also, property tax on a site-built home normally is far higher than on the manufactured home. And because the site-built home finance amount also will include private mortgage insurance for borrowers with lower down payments.
Address Concerns About a Higher Rate
The tools are there to mitigate higher interest rates. But both the retail sales personnel and the MLOs have to develop the attitude that those higher interest rates are nothing to be afraid of. This is true, and can be helpful if they say and do the right things in the sales process. Once a seller learns not to fear differences in interest rates, it becomes easier to plan the sales presentation and responses to questions.
For most prospective customers, the interest rates are of little consequence compared to the payment. If the focus is on the payment, and if the payment is affordable, most borrowers will not care about the rate. For the few that do – those with excellent credit – lower rates remain available through lenders like Triad Financial. The problem of higher rates is almost always in the mind of the sales personnel rather than the borrower, if longer terms are offered.
The higher rates provide incentives to the lender, captive or outside, to make higher-risk loans and lower dollar loans. The industry needs them to continue to sell homes and prosper. Lenders need to reexamine their reasons for shorter terms, and retailers and community owners need to do a better job selecting and training their sales personnel.
Here’s an interesting question: Are you serious about earning more money by overcoming more objections? Of course, everyone says, “Yes, I want to earn more sales commissions!”
If it was that easy, everyone would sell a lot of homes and make more money overcoming simple, easy customer objections.
Unfortunately, the 80/20 rule carries in our industry. It’s called “Pareto’s Law,” and says 20 percent of all the housing consultants make 80 percent of all the commissions. Unfortunately, 80 percent of all salespeople make only 20 percent of the earnings.
The sales strategies we’ll discuss to overcome objections will give you some well-proven ideas and strategies to help you deal with demanding situations and close more sales. There’s no waffle or padding, just the information you need to increase your sales by overcoming more objections.
Learn how professional home sellers can talk customers through questions, as well as identify and solve customer objections.
So, What are Objections?
They’re just a part of the complete home-selling process. This section will also deal with some added appointment setting and prospecting. As we go through it, we’ll build into a sales training resource for every stage of the selling process.
Objections can occur anywhere in the sales process. The most common objection, or smoke screen, you’ll hear is “I’m only looking,” before you even say anything.
Think about reasons behind such a simple statement from the customer:
They don’t want to show any commitment by asking for help
They’d like help, but don’t want to show lack of knowledge
They don’t want to give any financial details
There’s a fear of salespeople
They’re short on time
Many new housing consultants automatically will become frustrated. My goodness, all you did was offer your assistance! How were you supposed to know what was going on in their head?
Here are some techniques to overcome objections that will add to your sales skills. These techniques will give you additional strategies and skills anywhere in the sales process. The aim is to give you alternative viewpoints on how to handle objections in the home-selling process, so you can adapt them for your sales role. At no point am I saying scrap what you do now and do it this way. Sales is about acquiring new skills and using the best techniques in each sales situation.
Objection or Question
If you have the right kind of conversation, a customer will tell you what’s really troubling them.
Many housing consultants who first attend my sales seminars confuse questions with objections.
“Is there a full guarantee on not just the home, but the appliances?” is not an objection to the home. It’s a question. It’s also a clue as to the benefits the buyer is looking for in the transaction.
Get the prospective homeowner to ask questions. Encourage it. There is nothing more frustrating than a low-reaction customer who gives little information with one-word answers.
Even questions phrased negatively should be welcomed, not seen as objections.
“Do you think that’s an awfully expensive price?” is not an objection. It’s a question. And it’s easily answered with, “That’s a great question and let me show you the added value this home offers you and your family.”
Of course, the best way to utilize these sales techniques is to answer the objection in your own words, appropriate to the situation. Just like there are different personalities, there are numerous ways to overcome objections during the selling process. Over time, you’ll develop your own set of phrases and techniques that fit not only your personality, but the personality of the customer.
The Two Types of Objections
“Obstacles don’t have to stop you. If you run into a wall, don’t turn around and give up. Figure out how to climb it, go through it or work around it.”
-Michael Jordan
First, let’s discuss what are called smoke screens. There IS an objection the potential homeowner has; although they’re simply hiding it.
One thing to remember is this can be intentional or subconscious. Even if you use razor-sharp methods to answer the objection, you may be no closer to a sale. It’s because, in their mind, you haven’t answered the real objection.
Unfortunately, sometimes you’ll find more objections keep popping up to create even more smoke screens. It can become not only frustrating for you, but for your customer.
The key to solving this is in how you define the real objection. Let’s take a moment and consider this statement… “That sounds VERY expensive!”
Is this a genuine objection or a smoke screen?
Genuine objections are honest reasonsfor not moving forward. It’s important to remember this is from the customer’s point of view. It’s a genuine objection they’ve developed based on the information they have at that moment, AND the viewpoint they have formed.
You may know they are wrong. Unfortunately, that’s your viewpoint, and the only one that counts is the viewpoint of the potential homeowner. Even if you’re talking from a more informed position, the customer’s objection is real in their mind. So, treat it as a genuine objection.
Over the years, I’ve found it more effective to categorize objections as “Defined” or “Vague,” rather than real and smoke screen.
The objection was, “That sounds very expensive.” It’s now viewed as a vague objection that needs defining by asking good questions.
Not Acknowledging the Objection
Here’s where you need to learn to be flexible. In most instances, I recommend you acknowledge the homebuyer’s objection, repeating and rephrasing it.
Depending on the customer, the situation and the objection, it’s possible you can add strength to their objection by acknowledging it. As an example, if you say, “I can see why you might think that,” or, “I appreciate what you’re saying,” you’re agreeing with them.
There are specific strategies to overcome customer objections.
It’s what I call “Getting Caught.” It’s going to happen to you, and when it does, I would use an acknowledgment that’s followed by an effective phrase.
For example: “I can see why you might think that, because I haven’t shown you all of the standard features in this series of homes. Many of the items I’ll show you would be expensive options in other models. I think you’ll appreciate how these custom features will save you time, money and offer the convenience you’re looking for in your new home.”
This technique is best used when the objection is clearly defined and you can answer it. It’s simply a process that’s constant, that can be assessed, altered, adapted and made more effective.
If you just answer objections, with no thought to the process, you’ll find it hard to know which parts are working and which parts to change. So, prior to answering their objections, you must define them.
Take time to find solutions for customer objections.
How to Define True Objections
Question to find the real objection
Use your probing skills to discover the real objection. You’ll define it until it’s clear for you to know what you need to answer. Only once you have defined the real objection can you continue moving through the home-sales process.
If the customer does not give you the genuine reason behind the objection, you should decide if you are making effective use of your time. And don’t forget there are many reasons why a customer may not be forthcoming with the information.
There is a financial situation
They need to speak to a partner or family advisor
The home is great, but they’re not sure about the community
A bad sales experience at a competitor
Nowhere to place the home
This is where your home-sales skills can be used. It’s likely trust and relationship building that will get you to the next stage of the process.
Gain agreement from the customer
Remember the saying, “Patience, grasshopper”? I often see sales people ready to jump straight in with an answer once they think they’ve defined the objection. It’s best to sometimes hold yourself back, take a breath, and consider a different action.
Before you move to answering the objection, you want to gain some agreement from the customer. This includes defining the objection and then making sure it’s the only one stopping them from moving forward.
Again, use your own words and phrases. The more agreement you gain at this point in the home-selling process, the easier it will be to move forward and eventually get to closing.
Present the answer to the sales objection
The key message here is, “Forget the features and focus on the benefits and what it means to them.”
All your home-selling strategies help you by having a thorough understanding of how to use those benefits and personalize them during the sales process. Most of these will present the answer that covers the objection. Keep your focus on what it is the customer needs, and then personalize EVERYTHING to meet those needs.
Answering objections does not always mean making concessions! These are overcome by giving additional information, changing the customer’s viewpoint, showing the benefits and personalizing them to your potential homeowner.
Close or gain agreement to your answer
Don’t take it for granted that you have answered their objection.
Ask the customer. Gain their agreement that you have dealt with the objection they raised. If the objection was to the closing of the sale, then close now. Don’t wait.
They agreed earlier that there were no more objections to their purchase, or to moving forward, and that you understood and defined their objection. You can now close and move forward to the next stage.
You can see now why gaining agreement to the defined objection is such an important part of the selling process. If you hadn’t asked if there were any other objections, you could now be faced with even more objections to overcome.
Admit you can’t handle every objection. It’s rare that a customer walks in and immediately finds their dream home with no negatives. In most instances, that type of buyer is a “get me done,” and will purchase anything if you can get them financed.
This type of buyer knows this and might push you with objections just to make sure they are getting the best deal possible. Remember, many people start out viewing you as possibly less than ethical, or “a bit sharp.”
On the other hand, some customers will make unrealistic demands either deliberately or because they are not as informed as you are. Take all this in stride and answer concerns in an appropriate way.
Build the value of the home, stay with the process to overcome objections, and point out the positives to outweigh objections you can’t answer.
Helping to overcome objections is more than a sale technique, it’s a matter of solving problems for your clients.
Objections are a Vital Part of a Home Sale
“An objection is not a rejection. It is simply a request for more information.”
-Bo Bennett
Customers bring with them reasons to do business with you and several more reasons not to do business with you. Those housing consultants who are highly skilled address both. By the end of the interaction with the customer, they will have convinced that potential homeowner to do business with them.
The key here is to address objections in the beginning of the interaction.
When speaking with the customer, always highlight the most common objections and why those are not actually problems. Then, watch their body language during this process. They may change their posture, facial expression or breathing.
These are good indicators that you have hit on something they are feeling.
Of course, it is not possible to guess everyone’s objections. So, throughout the sales process constantly check in with them and get a sense of what they’re thinking. They will very often tell you upfront what their sticking points are, which makes your life much easier.
When it comes time to close, don’t be afraid to ask if they have any concerns. Watch their body language. If they appear more closed off, they probably have not followed you through the whole process. This is not a problem.
At that point, simply go back and elicit whatever their objections are and move the customer beyond them. This will make the sales process much easier, because you have built a good rapport with them.
Recognize Resistance to Change
Some prospects have a natural resistance to change. They follow the “If it’s not broke, don’t fix it” philosophy, which makes it difficult to decide. Some just can’t pull the trigger, and are unwilling to risk that housing change.
When these potential homeowners raise objections, listen carefully and ask for clarification. By asking them to go into more detail about the objection, you’ll be in a better position to overcome it. Most housing consultants simply give up at that point. They fail to understand the customer is truly looking for a good reason to make that housing change!
Discrimination Claims on the Basis of Familial Status Are Increasingly Common
Former MHI General Counsel Rick Robinson
As general counsel for MHI, I spend a great deal of time on issues relative to the Fair Housing Act.
Title VIII of the Civil Rights Act of 1968 makes it illegal to discriminate in any type of housing based upon race, color, religion, gender, national origin, disability or familial status. The “protected classes,” as they are called, are the basis for what has become known as the Fair Housing Act.
Fair housing policies and training for community staff are a must. This should be coupled with a review of added protected classes under state law and local ordinance.
One area that raises a lot of concern for communities is potential discrimination based upon familial status. Simply put, a claim for discrimination based upon familial status will be grounded on the premise that the housing provider somehow treated families with children differently than other potential buyers or residents.
There has been an increase in familial status claims in recent years. Therefore, community operators and retailers should be aware of the need for family friendly policies. They should be drafted in ways that are least restrictive to children.
Occupancy Standards and Familial Status
First, and foremost, consider the occupancy policy for the community. Remember, many jurisdictions have state law or local ordinances on the number of people living in a unit.
The Department of Housing and Urban Development has a Statement of Policy on occupancy standards. “An occupancy policy which limits the number of children per unit is less likely to be reasonable than one which limits the number of people per unit.”
The Statement of Policy also notes that “in appropriate circumstances, owners and managers may develop and implement reasonable occupancy requirements based on factors such as the number and size of sleeping areas or bedrooms and the overall size of the dwelling unit.”
Thus, in reviewing any occupancy policy, make sure any limits are based upon the number of people residing in the unit as opposed to the number of children. HUD will recognize state and local occupancy standards.
Steering Customers with Children
Secondly, make sure that the community does not have a practice of steering residents with children to one particular area of the community. There are several cases where housing providers paid large fines for segregating families. You can’t draw an imaginary line in a community and state one portion is for families and the other for adults.
Familial Status for Pools and Other Amenities
Thirdly, for communities with amenities, you must ensure that the rules for use are not discriminatory against families. Rules that restrict or single out usage by children often can be determined as discriminatory.
Examples of pool rules that courts have determined to be a violation of the Fair Housing Act include:
Children under the age of 18 are not allowed in the pool or pool area at any time unless accompanied by their parent or legal guardian.
Under no circumstances may a child under the age of 18 be in the pool or the pool area without a parent.
Children must leave pool by 6:30 and must be supervised by a resident relative at all times when using the pool.
Arguments that restrictions for parental supervision are for the safety of the children using the pool generally are rejected. Community operators should consult state law and local ordinances on supervised swimming. For instance, California law requires those under 14 to be supervised.
Therefore, swimming rules that broadly target all children and require parental supervision should be avoided. Instead, draft policies that specify the basis for the restriction. Only narrowly, if at all, target the subgroup of children to which it applies. The policy should not limit supervision only to a parent, but by a competent swimmer.
This same analysis goes for communities offering other amenities where there are safety concerns, such as fitness rooms or gyms.
Other Rules That Come Under Familial Status
Finally, community owners are now getting the idea of how age-restrictive rules can violate the Fair Housing Act. Other problem areas include curfews, supervision, noise, attire and common areas where playing is restricted.
Like those listed above, housing providers have gotten into trouble when the rule strictly targets children. A policy requiring “Children on the premises are to be supervised by a responsible adult at all times” was held to be a Fair Housing Act violation. However, a rule that required all tenants – not just children – to keep “bikes, carriages, strollers, tricycles wagons, etc.” in the home or garage was upheld.
Conclusion Familial Status
When it comes to Fair Housing Act claims based upon familial status, words matter. Avoid policies that are restrictive to children. Make sure that all policies restricting use are tailored to specific safety concerns and are the least restrictive possible. Blanket rules should be children-neutral on their face.
Illinois-based Oxford Bank & Trust Helps Community Owners Help Residents
Few lenders specialize in serving the manufactured housing marketplace. Those who do often can do more to build adequate partnerships in the industry.
There’s merit to a long-term strategy, according to Eric Oaks, assistant vice president of Oxford Bank & Trust.
Oaks gives an example: If a community lacks the capital to buy a newly vacated home on one of its lots, many lenders wholesale the home. The community is left with a vacant manufactured home site that isn’t producing lot rent. Instead, a long-term approach can create occupancy that generates consistent community profits. Portions of that revenue could go to the bank, as well.
Oxford Bank Looks to Expand Partnerships
Oxford Bank & Trust has learned to avoid those missed opportunities by developing relationships within the industry. Based in Oak Brook, Ill., the bank serves about 250 manufactured housing communities in six midwestern states. It’s considering expanding into other states, and continues to seek more community partners, Oaks said.
“Manufactured housing is the core of our business,” he said. “We love the opportunity our bank has to lend to low- to moderate-income folks and help them meet their dreams.”
The cornerstone of Oxford’s efforts is its Community Partnership program. It is both a formal agreement and a general guide for how the community will treat the bank. And how the bank will treat the community.
“Both entities are protected,” he said. “We agree not to pull homes from community owners that have a partnership with our bank. And the community owner doesn’t have to fill an empty lot with new product.”
Owners and residents benefit from a lender who works with communities to keep homes in place. Photo courtesy of Rickert Communities.
Community Gets First Chance to Re-sell Homes
When Oxford Bank & Trust repossesses a manufactured home, it makes whatever repairs are necessary to put it back into retail condition. Once the home is ready, the community lists and handles the home’s sale details. Both parties agree on a fair price — a price that allows the community to sell the home but doesn’t “beat up” the bank.
The bank pays the community a 10 percent commission for handling the sale. No lot rent is charged by the community while the house is being repaired and sold. However, all homebuyers must be approved by the community prior to the completion of the sale.
One of Oxford’s community partners is Roselake Estates in Pendleton, Ind. Manager Adriane DeRose said her community doesn’t charge the bank lot rent for its vacant homes. Rather, it works with it to get the homes re-sold in as smooth a manner as possible.
“We’re committed to working with them to keep those homes in our community, and we appreciate that that is their policy,” DeRose said.
She said the community partnership concept is rare in the industry.
“A lot of lenders will pull the homes out without discussing it with the community owner first,” she said. “We prefer homes stay in the community, rather than have to fill the lot again.”
Partnership Results in Speedy Re-sale
New Durham Estates in Westville, Ind., works with Oxford Bank to maintain filled homesites.
With Oxford’s aid, community partners typically sell repos within 90 days, Oaks said.
“If I have a repo in a community, it’s not necessarily a negative because the owner will help get it sold,” he said. “We get some losses sometimes, but in totality the program succeeds because of the vast number of loans.”
Gary Fath, manager of New Durham Estates in Westville, Ind., said Oxford Bank & Trust works to get empty homes filled right away, ensuring the community access to lot rent payments as quickly as possible.
“They’re the easiest to work with,” Fath said. “They also work well with the people getting loans.”
Oaks said the Community Partnership program is designed to benefit all parties. The community owner gains a viable new resident. The bank gains a new client to lend to, most likely. Also, that client avoids paying thousands of dollars in home-moving costs.
A home buyer can get a reduced interest rate on the home loan. Also, the bank uses more than credit score to define customer terms. Rather, Oxford’s rates are determined by the buyer’s overall financial history and the age and size of the home.
“We have truly enjoyed working with Oxford Bank over the years,” said Kenny Lipschutz, CEO of HomeFirst, which owns manufactured housing communities in Michigan. “Their personalized customer service and focus on digging into everything they can to help get our potential residents approved and financed has been tremendous.”
Clayton Home Building Group presented a check for $300,000 to Hope For The Warriors as the founding sponsor of the Warrior's Compass Program Suite.
Hope For The Warriors Launches New 2019 Warrior’s Compass Program Suite
Clayton Home Building Groupis a founding sponsorship of national military nonprofit, Hope For The Warriors®(HOPE) 2019 program, Warrior’s Compass Suite.
In 2017, Hope For The Warriors supported 6,000 service members, veterans and their families.
Since 2015, Clayton Home Building Group has supported Hope For The Warriors and their commitment to enhance the quality of life for post-9/11 service members, their families, and families of the fallen who have sustained physical and psychological wounds in the line of duty. Warrior’s Compass was founded as an extension of the transition services Hope For The Warriors currently offers to help veterans transition from service to the workplace.
Clayton Home Building Group committed to donating $300,000 to HOPE over the next three years to support Warrior’s Compass Program Suite.
“On behalf of Hope For The Warriors and the thousands of veterans we serve each year, a sincere thank you to Clayton Home Building Group for its three-year commitment as the founding sponsor of the Warrior’s Compass Suite of transition services,” said Robin Kelleher, Hope For The Warriors President/CEO. “Their ongoing commitment supports veterans’ transition from military to civilian life. Whether providing critical financial support to augment gaps in benefits, supporting spouse education opportunities, or offering a needed boost to a new career or business startup, Clayton’s partnership will positively impact veterans and their families for years to come.”
The Warrior’s Compass Program Suite includes:
Warrior’s Compass: A web-based employment search engine designed for veterans and their families. The program offers a comprehensive range of resources including resume support, job training, military skills translation, candidate matching and structured mentorship from other veterans.
Warriors To Business: A program that supports veteran entrepreneurs in creating or growing a small business. The program offers numerous tools to help their businesses succeed; including professional development, tools and equipment, networking opportunities and business resources.
A Warrior’s Wish: The wish program fulfills desires for quality of life beyond recovery and a quest for life-gratifying endeavors. Wishes granted include adaptive tools and equipment for hobbies and restorative family trip experiences.
Transitional Critical Support: Transitional critical support provides for service members’ financial and organizational needs as they transition out of the military. These needs include collecting documents, working with care providers, providing stop-gap financial assistance, creating SMART goals and providing referrals.
All Hope For The Warriors programs serve post-9/11 active duty, National Guard, reserve service members and veterans from all branches of the military.
“Hope For The Warriors provides so many resources for our nation’s veterans, and their families,” said Clayton Home Building Group President Keith Holdbrooks. “We’re so fortunate to sponsor the Warrior’s Compass Suite that will extend the support for service men and women as they transition into the workplace. Our assistance is just one way we can show our appreciation and give back to those who have served our country.”
Since 2015, Clayton Home Building Group has donated over $365,000 to Hope For The Warriors. For more information or ways to get involved, visit www.hopeforthewarriors.org or www.claytonhomes.com.
National Occupancy, Rents Show Positive Trends in 2018
Each month, Datacomp Appraisal Services releases a new set of updated information on manufactured housing communities in specific U.S. markets. In addition, this time each year, Datacomp provides an annual national summary of all major housing markets.
The annual information comes from all 160 major housing markets covered by our team.
Datacomp and JLT data always is published so manufactured housing professionals will find the value it lends to business. We provide a comprehensive look at investment-grade properties. This enables informed decision making for industry professionals including:
The interior of a new Champion home.
Owners
Managers
Lenders
Appraisers
Brokers
2018 Annual National Summary
The JLT Summary for 2018 shows increases in adjusted rent and occupancy across the board. The industry growth is evident for All-Ages and 55+ communities in every region.
Occupancy rates nationwide rose 1.2 percent year over year, with All-Ages communities bumping up 1.5 percent to 91 percent, and 55+ communities increasing 0.6 percent to 96 percent nationwide.
Adjusted rents increased nationwide year over year by 3.5 percent for all communities, to $526 per month. The same rents at All-Ages communities rose 3.7 percent to $507 monthly.
The biggest increase in monthly adjusted rents occurred in All-Ages communities in the West and Southwest, with 4.4 and 4.6 percent gains respectively. For 55+ communities, the South and West regions led the way in rent increases, each with an increase of 3.8 percent.
For increases in regional occupancy, gains in All-Ages communities in the Southwest outpaced the rest of the country, with an increase of 4.6 percent. In 55+ communities, the Midwest led the way in occupancy increases, up 2.7 percent for the year. However, most markets with lesser gains in occupancy already were operating at 90+ percent, while Midwest and Southwest properties had been operating in the high-80s for occupancy percentage and therefore had more to gain.
Energy Efficiency is a Focal Point for Business Efficiency
Whether putting up an office building or rental community, energy is fundamental to the success of any real estate project and plays an essential role in both cash flow and valuation.
Brad Dockser, CEO of GreenGen
Too often, the focus is on cost first… to the detriment of operations and life cycle analysis.
Many GreenGen clients approach us to help with the engineering and implementation of energy efficiency projects that not only lower operating costs but also improve sustainability.
Generally, energy and building systems are overlooked during initial design and are addressed at the end of a project. This can create hard and soft returns with significant impact on an asset’s perception and value. The right energy solution not only will reduce operating cost, but also increase asset value.
Applicable to manufactured housing, we have assessed numerous rental developments during the past year to evaluate potential to reduce costs via energy efficiency upgrades. Assessments revealed many opportunities for cost savings and value creation, most notably around lighting efficiencies.
This was the case for a student apartment building in Tucson, Ariz., near the University of Arizona. Even though the property was relatively new, the assessment revealed a variety of ways to upgrade the controls and lighting systems and increase property value in both the units and the common areas.
Powering Down to Improve Energy Efficiency
Replacement of fixtures and lamps in a facility, as well as adding occupancy-based controls, offers a great payback for property owners. LEDs offer much better efficacy than their incandescent, fluorescent, and metal halide equivalents. Additionally, the life of an LED is up to ten times longer than the lamp and/or fixture it replaces. Using automated occupancy sensors in intermittently occupied spaces also presented another major chance to reduce costs.
Many common spaces in communities have vending areas that present savings opportunities. Snack machines often operate all day even though they are not continuously used by residents. Occupancy-based vending machine controls turn off machine lights and cycle down compressors to optimize savings while maintaining desired temperatures. Typical savings for these controls are in excess of 50 percent.
An Eye on Water Consumption is Key in Every Locale
Another savings source is to reduce water consumption. At the Tucson asset, most restroom faucets consume 2 gallons per minute. Yet, Energy Star’s recommended consumption levels are at 1.5 GPM or lower. Aerators that go down as far as 0.5 GPM are available as well. Retrofitting existing faucets with pressure controllers reduces water consumption and water heating costs by maintaining a consistent GPM flow.
Installing efficient showerheads that prevent hot water from running down the drain while waiting for it to heat up is also a great way to save. These kinds of savings can be particularly valuable for properties that combine MH and RV occupancy, for communities that focus heavily on rentals, and in common areas at most communities.
Energy usage fluctuates with time of day and year. For common spaces in communities, summer may see increased usage with students away from school. Owners can capitalize on these changes by optimizing building operations around occupant schedules. Using controls to optimize use and run equipment ensures that facilities can maximize savings during down times.
Controls can include simply regulating a device or managing an entire system. At a minimum, lights should have sensors that turn off or dim when no one is around. Part of the implementation strategy for occupancy sensors is that light levels meet safety requirements and that the occupancy sensors are properly located. Prime locations are corridors, elevators, common/recreation spaces and storage areas.
A well-designed controls platform means energy usage correlates with physical occupancy. For users, that means the lights are always on when and where they are present. Device controls are simply and quickly rolled. And they are designed to function with most any fixtures to take advantage of nearly immediate savings.
Double Down on The Bottom Line
Implementing these measures will significantly improve the property efficiency and decrease energy consumption and cost. At the Tucson student housing, the facility upgrades, combined with available rebates, will increase the building’s value by more than $1,827 per bed, totaling nearly $1.1 million in added value.
Lighting efficiencies and plug load reductions generally are at the top of the list as the lowest expense, with the bonus of quick payback. This adds value to a property or a building through increasing comfort and safety of residents, as well as improving the overall experience.
When done correctly, financial return and sustainability are not discrete, separate choices but rather byproducts of each other. They are interrelated decisions that support and catalyze one another, creating multiple opportunities to create value.
This double bottom-line approach helps property owners and managers “Operate in the Green®”.
In August, the RV/MH Hall of Fame will celebrate the 2025 class of inductees, five from each industry.
“Our selection committees held meetings to review...
