Strategy proves profitable for Neal Communities

As the real estate market continues to recover, veteran homebuilder Pat Neal is relishing the moment.
With each day that passes comes a new opportunity. And Neal has plenty of them.

Capitalizing on the “bench strength” of his seasoned real estate team, plenty of land and entitlements and vision, Neal is pushing forward — and with great success — at a time when other homebuilders still are stepping gingerly back into the market.

“We’re busy — I’ll tell you that,” said Neal, who has been in the homebuilding business for more than 40 years.

Since January, Neal’s company, Neal Communities, has sold more than 150 new homes and has added four new positions to accommodate the growth. In late May, Neal announced the creation of First Continental Mortgage as a way to improve customer service and make the home-buying process easier. And last month, the company broke ground on its newest project located off Lockwood Ridge Road across from the Mandalay community. Called Woodbrook, the development will have 213 single-family homes, ranging from 1,079 to 2,535 square feet, when built out. Pricing will begin in the low $100,000s, and the community itself is set to open in the fall.

“The current sales success is a tribute to the commitment of our staff to ushering in a long-term, sustainable (real) estate market,” Neal said. “We are creating a recovery that benefits not only those directly in the real estate industry but also those who live and work here.”

Neal said he is confident the real estate market has passed its lowest point and is now on the rebound. Neal is embracing the challenge.

“Business is fun,” he said. “I haven’t stretched myself in a while.”

Neal said his new strategy began to shift in 2007 as he and his team members were faced with declining home values and significant drops in home sales. But it was that time they began to develop plans for making progress during a down economy. In the summer of 2009, for example, Neal opened the River Sound community off Morgan Johnson Road at below-cost to spur sales. The company also applied more science to its designs to lower home costs.

“Everybody was dribbling the basketball waiting for (the market to) come back,” Neal said. “Our team knew things had fundamentally changed.”

Neal said his position in the industry is unique. Not only does he have more land and entitled land than other developers (aside from Schroeder-Manatee Ranch) in the region, but also he owns 1,200 standing lots and has product available for purchase in four different communities.

Pat Neal admits he and his company are taking an aggressive approach to the next real estate cycle. The addition of First Continental, of which Neal owns a 60% stake, is one example of that.

The new company is a joint venture between First Continental Mortgage, in Houston, and Neal Communities. First Continental is a family-owned mortgage banker that specializes in writing mortgages for new construction.

“We were dealing with 10 lenders,” Neal said, noting the partnership will further improve customer service to his homebuyers. “First Continental specializes in mortgages for new homeowners.”

The partnership simplifies the lending process, improves communication and ensures better certainty of loans being approved, among other benefits, he said.

“Change and creativity is fun,” Neal said of moving forward. “People have bought into the vision.”

Contact Pam Eubanks at [email protected].