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Patrick McAlister: Nashville Real Estate’s Numbers ManBy Graham SummersTuesday, January 2, 2007 “I’m probably the dumbest guy in Nashville.”
The first thing that strikes you about Pat McAlister, other than the fact that he knows everything there is to know about Nashville real estate, is his modesty. When I asked Pat questions, his answers included statistics, historical references, personal stories, and future forecasts. And they usually ended with a modest disclaimer: “Of course, I could be totally nuts.”
Having spent most of last Thursday looking over maps, driving to work sites, and touring upcoming developments with Pat, I can tell you, he’s anything but nuts. A walking compendium on Nashville real estate might be a better description.
Pat’s a native Nashvillian. After majoring in construction management in college, he signed on with a private developer/builder. “I figured I could either go to graduate school or go work for someone who was already running a good business and learn everything firsthand,” he reminisces.
It was a small-time operation, producing 20-odd houses a year. While there, Pat did everything from sweeping out houses to accounting to drawing house plans.
Later, he joined a regional builder with annual production of more than 120 houses. He started out running the firm’s design department, and eventually worked his way up to resource manager. “At any given time, I was overseeing between 80 and 100 projects.” He then added as an aside, “I cut the firm’s production cycle time from 160 to 120 days.”
In 2000, Pat left the regional builder to start his own business building custom homes. He showed me one of his homes last Thursday: a beautiful stone southern-style house near Brentwood, Nashville’s middle class suburb. Pat’s business grew rapidly, and by 2003, he was building eight homes a year. And that’s when disaster struck.
“I had a bunch of homes scheduled to come online in the spring of 2003,” Pat explained. “But in the preceding fall, the bank I was working with got bought out. The specific banker I was working with left his job, and soon after the new bank tried to pull the plug on my financing.”
Pat explained to his new financiers that he needed some money to finish his current projects. “I told them that if they could wait until the spring, all the homes would sell, and I could pay off the loan. Otherwise, I was going to have to declare bankruptcy and they’d never get the money back.”
The new bank finally relented. Pat finished his homes, sold them, and got out of debt. But the ordeal forced him to consider a career move. “There’s too much out of your hands when you’re a builder. I loved building homes, but the financial aspect and the possibility of having the rug pulled out from under me turned me off of building.”
Pat moved into real estate marketing analysis. At the beginning of 2006, he started his own research firm in Nashville and currently works as a consultant to builders, buyers, and anyone else interested in building or developing in the Nashville area.
During our meeting, Pat showed me where Nashville real estate had already exploded. He also told me about what parts of the city were set to boom and how to make 10 times your money on land in Nashville. We’ll cover it all in an upcoming issue.
Good trading,
Graham
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