than 100 houses in this area,” he added.
MCNEILAGE MILESTONES IN GROWTH, OPPORTUNITY, AND AFFORDABILITY
PERFECT, PROFITABLE SYNERGY McNeilage and Zachary are so
“I had been carrying that presentation on Solo East around in my truck for months by the time we finally got that deal done,” he recalled. “Because that bank, Franklin Synergy, took a chance on us and our venture, it seemed only right to take a chance on our buyers. That is how we arrived at the idea of a $500 down payment (literally one-sixth of what conventionally would have been required) that would ultimately be worth many times what buyers paid on the day of closing. “Next time I start selling Solo condos, I may have to rent out the local NHL hockey rink, Bridgestone Arena because Solo East was so successful,” he laughed. “If you make housing affordable, people will buy it and it will help them out,” McNeilage said. “Your reputation will be W hether buying apartment complexes, revitalizing entire single-family communities, or creating new versions of accessible, affordable homeownership for the next generation of homebuyers, Bruce McNeilage is always true to the mission. “You cannot have a success story if you never offer a tenant the opportunity to buy the house, and you also cannot have a success story if the tenant does not want to live in the house,” he explained. “The majority of what we do is brand-new housing: new house, new condo, new apartment where no one has ever lived before, with plenty of space, granite countertops, stainless steel appliances, and amenities like pools and clubhouses. You can rent the Amer- ican Dreamwithout putting any money down, then save that money in reserve so that later you can buy.” McNeilage has experienced one validation of his vision after another. Here, we’ve compiled a partial list of major milestones that have not only confirmed his goals for himself, but also shaped the multifamily industry
in markets where he is active:
2015: Entire rental portfolio in the Nashville area purchased by publicly held American Homes 4 Rent for $9.63 million. 2015-2016: Solo East condominium project under construction. 121 new homeowners gain nearly instant equity when they purchase their condos during preconstruction. “We allowed every single buyer to purchase with only $500 down, which had never been done in Nashville before,” McNeilage said. 2017: Solo East completed to great accolades and McNeilage begins looking at other areas of Nashville in which to develop similar projects. Also in 2017, McNeilage and Zachary announced their intention of investing in Greenville/Spartanburg, South Carolina, and promptly pur- chased more than half of the proper- ties to which they had committed. own strategy.” The two closed on more than a dozen of their target properties just last month. McNeilage observed that flat wages in the area along with escalating real estate prices “have made homeownership more difficult” in the area. He expressed confidence that his investment process, which is already successfully generating income for other development projects and creating new homeowners in Georgia and Tennessee, will be successful in the Greenville/Spartanburg area as well. “Our goal is always to help create more stable communities by creating a path for homeownership wherever we see opportunity and using whatever strategy is most appropriate for that market,” he said of the move into a third state. “Our intention is to build a portfolio of more
determined to provide access to housing that is affordable to first-time buyers and to local renters in their areas of operation that sometimes they find that their goals weigh heavily on their bottom line. However, McNeilage says, it is vitally important for developers to find a way to meet the next generation of first-time homebuyer’s needs. “Millennials have lived a very different type of life from their parents. They have huge student loans to pay back. They have other debt. They have not spent their young adulthood saving up a deposit for their first house because they spent their young adulthood during the housing crash and the Great Recession,” he explained. Because of those heavy debts and a completely nontraditional mindset about homeownership and community living (Millennials tend to view it as a positive far later into their 30’s than previous generations), today’s first-time homebuyers are often more than willing to invest in a condominium instead of a single-family residence. “They start out believing buying a house may not be the best financial move for them, but when they see a product like our condos with some built-in equity, granite countertops, stainless steel appliances, and is not any more expensive (and is often less pricey) than a nice apartment, buying starts to make sense,” McNeilage explained. However, condo projects, unlike single-family rentals, sometimes require some long-term vision. “You might starve for three years between when you hire an architect and get your development approved by the city council and when you finally deliver your project and get the money in your pocket,” he observed. “To build a $25 million condo project, you need a lot more funding than you do to invest in single-family. The single- family rental business is what creates
that you helped them own their own home and that you helped that area grow, kept recent graduates and young professionals living there, and improved the overall economy in the area.” STILL FORGING AHEAD Kinloch Partners recently entered a new market with that same “making-attractive- housing affordable” strategy in mind. Earlier this fall, McNeilage and Zachary announced their intention to purchase 20 homes for nearly $4 million in five Greenville/Spartanburg, South Carolina, communities. The homes were all built in 2016 and 2017, and Kinloch Partners will lease them to qualified applicants and then sell them, upon request as always, to those tenants using their “proprietary rent-to- 2005-2006: Pioneered the “build- to-rent” business in single-family residential housing, building portfolios in Tennessee. “We pioneered the industry in Springhill, Tennessee, in 2005,” said McNeilage, “building brand-new houses and renting them out.” 2010-2011: Formed Kinloch Partners with Christopher Zachary to invest in Atlanta, Georgia, and Nashville, Tennessee. Solidified status as a dominant, independent player in the Atlanta market by buying, renovating, and renting homes that otherwise would likely have sat vacant and blighted during the housing crash. 2010-PRESENT: Atlanta-area portfolio bought out by hedge funds and real estate investment trusts (REITs) 11 times.
Bruce McNeilage is always looking forward. “Solo East, for example, is not just a community. It’s a movement,” he said. “I’m going to expand to Solo North, South, and West next!”
the income that sustains these vitally important, substantial projects in Nashville and elsewhere. “That single-family business also recently allowed me to have the ability to do what I would say is an even bigger thing: create wealth for 121 other people in Nashville, almost all of them Millennials,” McNeilage added. A PERFECT, PROFITABLE PARTNERSHIP McNeilage and Zachary have known each other since they were five years old, when they attended Kinloch Elementary School in Dearborn Heights, Michigan. “We were newspaper boys together, aluminum can collectors, mowed lawns together. We started profitable businesses together when we were seven years old!” recalled Zachary. When Zachary left Dearborn Heights for college and business school elsewhere in the state, McNeilage headed south to Florida State University, where he
obtained a bachelor’s degree in economics before promptly entering the financial management field and flourishing. When the two reconnected seven years ago, they bought their first investment property together the following week, and Zachary brought more than two decades of experience in financial and corporate strategy to bear on McNeilage’s vision. “He was instrumental in our ability to go from a startup focused nearly exclusively on the single-family home segment to servicing the build-to-rent and single- family home markets,” McNeilage said. “Together, we’ve been able to stay true to our mission and provide homeownership opportunities to people, not just rental opportunities. The option to buy enriches everyone in a community whether they all end up buying or not.” • Kinloch Partners is a privately held real estate part- nership formed in 2011 by childhood friends Bruce McNeilage and Christopher Zachary. The company has offices in Kennesaw, Georgia, and Franklin, Tennessee. Learn more at kinlochpartners.net.
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