Over the past five years, the Manufactured Housing industry has been the hottest multi-family housing investment type. This new market of Community Investors/Owners caused a consolidation to the number of operators in the country but increased the market share that these operators hold. In 2015, the largest 50 operators owned and managed 500,000 sites and in 2018, the largest 50 operators owned and managed 700,000 sites.
My name is Steven Blank and I have been operating in Manufactured Housing Communities since I was 15 years old. My family successfully owned and operated Franklin Homes for 30 years before selling the 2,500 site Michigan portfolio in August of 2018. I was taught a boots on the ground approach to operating, that this business is not rocket science, but it does take industry knowledge, people skills, accountability and follow-up to be profitable. I have operated with 3 of the top 10 largest operators in the country and have consulted, acquired and/or sold from another 50 operators and there are some issues that I have seen need to be addressed. For anyone that is thinking about purchasing a community, please take the following items into consideration.
Manufactured Housing Communities are not like Apartments, Condominiums or Commercial Property Management.
In MHC, your land is your asset, not your building. Operating a Community is like operating a small town and all the town’s utilities are your concern- the houses are the homeowners. If you are planning on renting homes, that brings another layer of commitment into the picture, as you are now a landlord like an apartment complex. In every community, the most important job is that of the mayor, making sure the residents have a safe community to raise their family in and that is one of the main pain points I have seen in our industry. There are not enough industry professionals to appropriately operate a Community.
Community Operators have a Responsibility to their Residents
This industry has opportunities today that it has never existed. MH is becoming a viable housing option for demographics that have in the past sought alternative methods of housing, but because of the low amount of new affordable housing products available- the stigma of MH is disappearing. The new homes manufactured today have all the modern designs that residents want to live in and the service available is incredible. Now, the job is for Community Operators to step up their service, so we do not see another monologue from John Oliver or more class action lawsuits.
Create a Foundation to Operate On
The mistake that most operators make is, they are ultimately reliant on their Community Managers. This business happens at the Community, on the ground and the Community Manager is the first and sometimes only presence of your company a resident will ever see. A common trend I have seen with newer operators is a lack of industry knowledge in the corporate staff to support their Community Managers. A strong operation has set processes, procedures and technologies that ensure efficient operations on the ground and protection. Remember, this business is not like running an apartment complex, so having corporate staff with real field experience is a necessity.
