A Rare Look Inside the Fly-In Neighborhood Business Model

Welcome to the Kerner office, where we dive deep on business ideas and business models. So a few months ago, I posted this tweet over here. It went viral, got over a million views. And I was just fascinated about the concept of a fly in neighborhood. This is Pecan Plantation, which is about an hour south of Dallas Fort Worth. It has over 4,000 acres and over 4,000 homes. And it has two runways. Better yet, there are homes on the airstrip and then there are homes where you can taxi to the airstrip. And this just boggled my mind. And I'm not even into aviation. And so I just thought, I have to talk to the owner of this neighborhood. Happens to be a company called Patton Properties. I talked to John Patton, super helpful, and I just wanted to know what is liability like, what is insurance like, what are noise complaints like, if any? What is it like living in a neighborhood that's almost fully encompassed by the Brazos River? It's just a super interesting business. There's also a actual pecan plantation on the property. And I'm just curious, and I assume you are as well, so I thought you might want to hear this. All right. So we met each other because I saw a pecan plantation and I thought it was incredible. And so I tweeted about it and it went viral. And now we got in touch and it's like, okay, now I actually want to learn about this because there's something here. So can you talk briefly about, like, the history behind Pecan Plantation, how it went from the original owner's hands into your hands?

Sure. And we're still partnered with the Anthony family, the original owners, but they began developing Pecan Plantation way back in the. It was initially a full on pecan plantation. They still have a headquarters there for their business, and they built a series of neighborhoods. Typically, a developer will try to sell their inventory pre development, pre construction, and then use some of those funds to build the project out. And what separated them is they did it completely opposite. They completed it, put in the finished product, and then they sold it. But again, you know, they weren't necessarily land developers. So they developed a series of neighborhoods starting in the 1970s. And the patriarch, Mr. Anthony, who I believe is 92 now, decided he was at a point in life where he wanted to expedite the project, finish up the development. And while this was going on, he lost one of his sons, who was an intricate part of the real estate side of Pecan Plantation. So they decided to list it for sale. And a broker that we've done Business with before brought the project to us. We did a couple site visits, did some homework on it, met the Anthony's and it became apparent to us that they were so entrenched, not just with the project, but the community, it would be next to impossible for us to just buy it and step into their shoes and continue with what they were doing. So they came and they visited one of our big flagship projects north of the Woodlands Republic and Texas Grand Ranch and they saw our operation and figured out pretty quickly, I think that we were the real deal. And over several months we came up with the idea for a partnership where the Anthony's would kind of stay in the deal, help out with the hoas and you know, some of the day to day affairs. And we would from day one come in, take over the development of the lots. We replaced, put our own people on site, took over the sales and the marketing and kind of the daily operations and they helped us as needed. I believe we started in November of 22 and since then we've sold 350 plus properties for about $57 million in sales. Wow. So it's been a partnership that's worked great for both of us.

What percentage fully sold is the property right now?

So that was another unique thing about Pecan Plantation. I believe it had 3,400 existing homes when we started.

Okay.

We're going to add probably the final thousand or so units to the, to the community, but it's essentially, it's its own town. I haven't seen much like it in my time working. So it's got that scarcity value that people look for when they're trying to invest their money or buy a piece of real estate or whatever they're looking to do.

Yeah. Back to your original story. I feel like there's so many interesting learnings in there. Like as a real estate owner developer myself, it's. It's funny how you started the conversation by saying you bought these condos in Florida and you had to convince the banks, you brought the developer with you and you were creative to make it work, which you have to be sometimes. And then with this property, you know, over a decade later, you just brought them to one of your existing comparable properties and they were like, oh wow, these guys know what they're doing. Right. So it's like two creative ways to get a deal done. Both either end of the spectrum. Right. Well established and not established. I also think it's interesting as looking at Pecan Plantation as a business. A lot of times as a business owner, you Want to build your business to sell. You don't want things to be too intertwined with the owner. You want clean books, and that's generally good advice. But when the opposite is true, there are still creative partnerships that you can form. Like as what happened with you.

It was too special of a place not to figure something out. In our business, there's this thing I call the sniff test. You go and you visit a site and would you live there, would you use it, would you enjoy it? And within 45 seconds, through the front gates. Absolutely. This is a special place. So it was too nice and too special not to figure out how to help the Anthony's get it completed.

All right, so about a thousand home sites left. That what I think is.

So that's what we started with. We probably were down to 6 to 700.

Okay, so 6. I think you said 350. So like 650 left or so.

Yeah.

Okay. What's so unique and interesting about the property is how it's like almost fully encompassed by the Brazos River.

Yeah, right. The location, it's. You're surrounded by the Brazos River. Granbury is a spectacular small town. It's got great history, great restaurants, a very scenic lake. But yet you're close to Fort Worth, Dallas, Fort Worth area. And then you get to Pecan Plantation. And again, it's a unique small town within a town. Pecan Plantation is fairly self sufficient. Has its own grocery stores, its own drugstores, its own country club, its old kids parks. It's the whole deal there. So just very rare and special place.

Yeah, it reminds me of a neighborhood that my family lived in for about six months outside of Houston. 5,000 homes, its own grocery store, its own town. And it was the. That was the best six months I had ever spent in any home in my life. It was kind of a unique set of circumstances of why we had to move there. But I won't get into. But you can't overstate the community aspect and how that affects one's quality of life.

Absolutely right.

I imagine there's like walking trails and.

Oh yeah, it's got everything. It's got. It's got an equestrian component to it. It's got a marina, it's got place called the Pack. It's all the kids ball fields. They got two golf courses, they got a clubhouse, nice restaurants, gym. I mean it has everything. It's got its own fire department, ems. So it's pretty special.

And how many acres is it again?

I don't know the exact acreage off the top of my head, but it's a big place. It's. When we're finished with it again, it's going to be 4,500 homes. Probably the average lot size. When we get done with, it's going to be close to an acre. So it's a big place. Wow.

Tell me about the pecan business. Like, it sounds like there's still thousands of pecan trees there. Is that producing revenue? Do you have any role in that or.

We have zero role on that. I believe the Anthony's kind of still have it active. They have a mail order catalog. I believe outside of that, I've toured it. The pecans are delicious. They're, you know, they have chocolate pecans and candied pecans and a lot of the residents in there try to preserve as many as pecan trees as possible. That gives it a little bit of its charm as you drive through it. But outside of that, we're not in any way involved in their business. And I know very little about the pecan business in general.

Yeah, same. I did a bunch of research on fly in communities in general.