When it comes to real estate, Devan McClish has done it all since starting in the industry nine years ago – flipping, new construction, property management, general contractor, apartments and small retail.
Recently, he’s added affordable housing to the mix. The creativity and challenge involved in making affordable housing projects work – and the growing need throughout the region – turned him onto the possibilities for growing his business that way.
“As developers and investors, we have to make money from the projects we choose to go after. But the mutual benefit for developers and communities that comes with providing the affordable housing the region needs is unique. If my business succeeds by meeting a need in the market that makes the region better, that’s great.”
Building a new path
McClish waded into the affordable housing market gradually. Initially, he decided not to chase Nashville’s growth with higher-end tear-downs like so many of his peers and instead focused at the lower end of the market. Those projects, along with his thriving property management business, frequently took him into affordable housing areas, so he was often considering and sometimes pursuing renovation or new construction affordable housing projects, but the numbers never worked.
That changed when a fire badly damaged a property his development firm, Olympus Rentals LLC, had just acquired and destroyed his original vision for the project.
Undeterred, McClish revisited his affordable housing ideas. He knew from speaking with District Councilperson Nancy VanReece the need in the area was great, and recognized he now had the perfect opportunity to bring his ideas for affordable housing to life. He could make the numbers work – he just needed the financing.
Finding the right financial tools for the job
McClish approached Pathway Lending with his new vision – rehabilitating the 14-unit motel into one-bedroom affordable and workforce housing units. While insurance proceeds would cover 60 to 70 percent of the rebuild, he wasn’t willing to sacrifice his reputation and the trust he had worked hard to build in the community by cutting corners.
Pathway Lending extended a loan so he could bridge the gap and fully finance his vision for the project.
“I work hard, and I move fast. I appreciate that Nicole and Pathway kept up with me and didn’t create more work but instead proactively communicated with me all the way until closing.”
He plans to manage the property when it goes online and will start marketing the units for pre-leasing with renderings and illustrations as soon as construction is far enough along that prospective renters can safely walk the property.
For future ventures, McClish says his current project in Madison has opened his eyes to the possibilities available to his business when taking a creative approach to the affordable housing market.
He has started pursuing other creative affordable housing projects like renovating duplexes and on the property management side, he has taken on a new complex in Dickson that accepts low-income renters from the local housing authority. He thinks his focus on what the market needs at the neighborhood level, his experience working with low-income communities and his willingness to create new models all add up to opportunity for his business.
To find out more about Pathway’s Multifamily Housing Loans visit our website or contact Nicole Robben, Commercial Real Estate Director.