Builder notches major award

Pat Neal doesn't merely rely on analytics and demographics when his prolific homebuilding firm looks into a potential project.

Sometimes he even checks the garbage.

Neal and another representative from Lakewood Ranch-based Neal Communities recently did that for a project in Venice. They looked for discarded old toys, diapers and other signs of kids living in the area to show the community was family-friendly.

Such a garbage patrol is one of many reasons why Neal Communities is successful. The company, which builds homes in more than 30 communities on the west coast of Florida, including at least four current developments in east Manatee County, had $276.6 million in revenues last year.

Neal has won multiple industry and area community awards going back decades. He's also been the Business Observer's Entrepreneur of the Year three times.
Now Neal has one more award. The company was named 2015 Builder of the Year in Professional Builder magazine, a monthly trade publication that reaches at least 120,000 homebuilders nationwide. Recent past winners include Nashville area homebuilder Goodall Homes, with $100 million in annual sales; Houston-based David Weekly Homes, with more
than $1 billion in sales and nearly 3,000 home closings in 2013; and national homebuilding giant Toll Brothers, with $1.47 billion in annual sales.

“This is the pinnacle award for builders in the United States,” Neal says. “There is no bigger award than this. This is a story about the commitment and skill and perseverance of the people who work here.”

Professional Builder magazine editors interviewed at least a dozen Neal Communities executives in November to get a deep understanding of the firm's process and culture. In an interview with the Business Observer, Neal talks about what he believes is the firm's keys to success, and what led to the award. His six keys are featured here:

NO. 1: Quality
Fit and finish are key components of a good home, says Neal. Quality also includes building specifically in the Sunshine State. “Our homes are designed for Florida,” Neal says. “Not
only to be light and airy, but to withstand our humidity, energy conservation requirements and climate.”

Neal said the value of the home has to extend to customer service. The company has been particular about building well, and fixing what's wrong.

NO. 2: Location
Neal only buys in A and B locations, and he said he avoids buying land where there are “distressed neighbors,” such as bad schools. An A or B location also refers to things such as being away from a highway or having convenient access to a grocery store.

NO. 3: land
A close cousin of location is the firm's land acquisition strategy. Neal, along with his son John Neal, are known in the region for shrewd land deals.

It starts with buying land, says Neal, before the firm needs it. The company purchases enough land to handle its development needs for a 10-year period, based on current sales pace. Neal, who says his favorite part of being a homebuilder is going through the entitlement and zoning process, aims to buy early in an economic cycle.

Another integral part of the land strategy is the firm treats those deals separately. Neal often says “every bag sits on its own bottom,” meaning the land division of the company has to be profitable, separate from the overall business. Same goes for the mortgage unit, title, golf courses and other holdings.

NO. 4: Hiring
Neal and his executives abide by a hire slow, fire fast philosophy. In Neal's case, he aims to hire so well, he never has to fire. The firm's hiring process is wrapped around what Neal calls an endurance test that includes up to six in-person interviews. There's also an aptitude test and a Myers Briggs personality test.

NO. 5: Pride
Neal wants to hold his head high when he's in the community. “My team knows I never want to see my customer at Publix and have to go hide behind the Corn Flakes to avoid embarrassment — and I never do,” Neal says. “That means I should be able to look at any customer straight in the eye and be proud of the company, the community we built and the finished product for our buyer.”

NO. 6: Brand
Neal Communities employees live by the company's 30-second rule, in that customers should quickly know they're in a Neal Communities development. Says Neal: “When a person drives into our community, they should see the emphasis on landscaping, attention to detail, conscientious maintenance, visual quality of the homes, the effect of the land plan and a better, more innovative community than our competitors.”