Property Investory
Louise Fitzgerald Baker - Property Development: Do You Have the Stomach For It?
November 27, 2018
Louise Fitzgerald Baker is the director of the Pink Hard Hat. She is a jack of all trades when it comes to property and no one understands the value of hard work quite like her. From a young age, she knew that property would be a part of her life but little did she know of the success that she would build.
In this episode, Baker will share how she developed $42 million worth of properties in just ten years! As well as this, Baker will share her passion behind uplifting women and helping them create their own income streams.

3:05 | Little Person, Big Challenges
8:39 | School Loves Me, and I Love It
9:25 | Launching a Remarkable Career
12:25 | Fulfilling the Expectation
17:12 | Taking the Leap
19:28 | You Need the Stomach for Property Development
28:50 | Follow Your Instincts
34:45 | Research, Research, Research!
39:32 | Life Changing Deals
47:36 | One Step at a Time
49:01 | Finding New Success
54:04 | Sticking to a Routine
56:57 | Luck Versus Skill

Resources and Links:


Louise Fitzgerald Baker:
[14:33] It felt almost like being in a really dark place for several years and then suddenly getting to the end and the light that we came through that tunnel and we could see the light and I suddenly, and then that really took off my property development career.
Tyrone Shum:
This is Property Investory where we talk to successful property investors to find out more about their stories, mindset and strategies.
I’m Tyrone Shum and in this episode, we’re speaking with the director of the Pink Hard Hat, Louise Fitzgerald Baker. She is a jack of all trades in the world of property and will share how she developed $42 million worth of properties in just ten years! As well as this, she will share her passion behind uplifting women and helping them create their own income streams.
Tyrone Shum:
Throughout her career, Fitzgerald Baker has pursued various opportunities. This has made for some extraordinary experiences.
Louise Fitzgerald Baker:
[0:25] I'm from the Pink Hard Hat. And I'm a property investor, real estate agent and property developer, and general entrepreneur. I've written books and speak. So, I've done a few things around and with properties throughout my career so far.
Tyrone Shum:
It took a lot of hard work for Fitzgerald Baker to achieve this success, but it was worth it. She is now able to live her desired everyday life.
Louise Fitzgerald Baker:
[0:53] It's taken me a while to build a life like this but now I've built an office beside my house as part of the house. And so, once I go to work, I'm in a beautiful room which looks over the water, and I've got a sofa beside me. And what I do on a daily basis is I do a lot of writing, coaching, speaking, managing properties, and researching.
[1:19] And so some of that involves meeting with people and some of that involves being in my own space. But it's been fairly deliberately orchestrated to have this. It hasn't been the way my career has been all my life, there's been times I've had a team of people but in this chapter, this is what I have now.
[1:48] It's really been a life; it's been an opportunity to create the world [that] I wanted to work within. So, I work around my life and rather than live around my work, and it’s been really deliberate. So, the space I work with, that fuser I've got on, the music that I'm listening to, the cat sleeping beside me, the dog behind me. I've got the wallabies jumping in front of the, you know, in the view out to the landscape. So, it's really deliberate, it's a space that I can be creative, and I can carefully orchestrate the life I'm designing.
Little Person, Big Challenges
Tyrone Shum:
Fitzgerald Baker is clearly a very strong woman, which is a trait that she saw from her mother while growing up.
Louise Fitzgerald Baker:
[3:04] I'm the youngest of five children. I grew up in Melbourne, and my life changed dramatically at the age of two. So, my father walked out the door and unfortunately never returned. He was killed in a car accident, leaving my mother widowed with five kids under 12 to look after. And for a little person, I guess you just realised one walked out and then quite shortly after it, my mother was faced with a very similar dilemma.
[3:35] So, in her case she had a serious choice to make without any insurance. She was financially destitute when he passed away so suddenly. He was only 40 and she was 38. And she'd never written a check in her life. So, on top of having to deal with the grief, she was faced with a terrible choice that no one should really have to make and that is, Mary you have three options.
[4:04] You either go on the pension and frankly who would blame you. You bought, you know, essentially stop everything. You know, her husband had three menswear shops and a half Fieldhouse in middle Brighton in Victoria, in a really nice suburb. And they sort of said, 'Look, just stop everything. Sell out and possibly even separate the kids to give yourself a fighting chance to be able to bring them up'. And she decided 12 hours later, to drive to work and take over the family businesses, having never written a check in her life.
[4:45] And so, for a little person [and] for all of us, our lives shifted very, very dramatically. And we got to see a front row view of a woman faced with a circumstance none of us should ever want to be in. But how she recovered her position and grew through that was an amazing testimony. And so that was really my beginning. I'm the youngest of those kids, with three brothers and a twin sister. And part of that was her negotiation of both life and the role that money played in that.
Tyrone Shum:
The strength that her mum displayed throughout this unfortunate time is something that has stuck with Fitzgerald Baker and taught her priceless lessons.
Louise Fitzgerald Baker:
[5:43] I think all your memories are really just of that one key person who's pivotal. But Mum will go to work at about 6:30 in the morning, and then she'd be home at six at night. And we suddenly had a house that changed in regards to the people involved in it. So, where she was a stay at home Catholic housewife before, she now became a working mum, and literally overnight.
[6:12] And my aunt and uncle and grandparents were involved in helping care for us. The boys about [a] couple of years later was sent to boarding school and so, it was just Julie and I. And so, it was I guess [that] you know nothing else as you grow up and into that. But as the years went on, we continue to see a working mom, a very hard working mom. And she learned business the hard way. In the 70s, there weren't that many women in business, let alone [in] menswear.
[6:42] She got ripped off left, right and centre. And so, it was really a school of hard knocks, but it didn't get her down. Her attitude, mindset, and her ability to grow through it was just profound. And I think she passed that on to all of the kids. It's no accident that the majority of the children turned out to be self-made millionaires and very entrepreneurial, each of us in very different ways. So, I think that a lot of what she passed on to us is, was really the idea that it's not what happens to you, it is really what you do with life.
Tyrone Shum:
This experience also taught Fitzgerald Baker and her family the importance of financial security.
Louise Fitzgerald Baker:
[7:52] My brothers all were teenagers [and] six years older, and they all went until they finished year 12 like we're required to. Then in the school holidays, we'd all have roles in the family businesses. She went from menswear to tax lotto’s, and property was also something she became involved with passively as an investor. And it was just expected that as she did, we would all grow up and buy multiple properties as a means of an underpinning security for our life.
[8:21] And I think she really did pass on a sense to us that, oh my gosh, money can't protect you, but it can insulate you. And I know myself that had she had a financial cushioning, then her choices would have been different in the aftermath of my father's untimely death. So, I think for all of us, there was a sense that money is not a panacea, it can't solve life's problems, but should you see a snag, then it can cushion the fall and certainly stop that downward spiral getting any worse. And so, we really took that on to see the importance that income can play in loss recovery when things don't go to plan.
School Loves Me, and I Love It
Tyrone Shum:
Fortunately, Fitzgerald Baker had a great experience at school and went on to further her education at university.
Louise Fitzgerald Baker:
[9:26] I was good at school. School loved me and I loved it. I was one of those kids that had kind of a photographic memory and I had a really good time. I was into the sports and I love the whole idea of school. I enjoyed it. And then I went on to uni as my twin did. So, the girls in the family, we were the first really to go to university. Prior to that it wasn't such an expectation for the generation before us, really.
[9:52] But by the time we came along, and we were finishing school in the late 80s. It was really expected that you'd go on to uni. Not knowing really what I wanted to do, I did a double major in communications and major in marketing, I kept my options open.
Launching a Remarkable Career
Tyrone Shum:
From here, Fitzgerald Baker launched into her remarkable career.
Louise Fitzgerald Baker:
[10:07] I went into market research — Fast moving consumer goods and using brands and buy behaviour to be able to book straight and sell products.
[10:19] And it was something I really love. The psychology of sales through the way a product was pitched or presented to the market was fascinating because it involved business, marketing, and psychology. And so, I did that for several years before having an opportunity to work in a free trade zone. Australia's only free trade zone in the Northern Territory, with a former Vice Chancellor of the University. He said, 'Put your money where your mouth is Louise. If you're any good at marketing, I'll throw you this curveball'.
[10:50] He threw me an opportunity to work in a free trade zone that was 22% occupied, and my job as a marketing manager was to obviously fill those places. And within about a year and a half, we got it to 98% capacity. And we became an amazing testimony for free trade zones, both in this country and then overseas. And then I ended up doing a bit of work in Southeast Asia.
[11:20] [I] had a great time in Darwin in the 90s and [then I] went on to work for the chief minister of the Northern Territory, who's like one of the premiers in one of the other states. And when he was presiding over $2 billion budget, and I got to do work in regards to the research side. So, I've had a really colourful academic and business experience before taking on the property side and falling into that space many years later.
Tyrone Shum:
Throughout her time in the Northern Territory, Fitzgerald Baker met her husband and embarked on a personal journey.
Louise Fitzgerald Baker:
[12:15] I met my husband up in the Northern Territory. And we ended up coming back to Sydney. He was working on TV news, and then we moved to Canberra, and then Brisbane. And when we got to Brisbane, that was where I had my, no, when we got to Canberra, I had children. And then once we hit Brisbane, that's when essentially the kids started going to school.
[12:40] So, I always worked while the kids were young. I worked part time in whatever I was doing and I re acquainted myself with the way that I would generate income. I became more imaginative in the way I would let money work for me, because suddenly I had these little people that I had to fit my life around. And it was no longer of my choice to leave five days a week and not see them. So, I had to come up with different ways to generate money so that I could build the lifestyle we were looking to create, but at the same time raise these gorgeous kids.
Fulfilling the Expectation
Tyrone Shum:
Now, let’s go back in time and explore how Fitzgerald Baker got into property investment.
Louise Fitzgerald Baker:
[13:43] I always really had an interest in property because I've watched my mother be an investor for many years, and a landlady. I had seen that that was really the expectation. Not to just to have your own home, of course, but to have multiple income streams working for you. And in that time, property was a means to an end for an income stream. I mean, these days and I can get onto that a bit later but these days, there's many, many more choices out there that I didn't have back in say, the 80s.
[14:12] But as soon as I was able in my 20s, I bought my first house and bought several properties along the way and then just began to build a little portfolio quietly on the side. It became harder to do once we had kids and we were down in income and obviously things became — I had to become a little more cognizant of income and holding these properties. And some of them were positively geared but not by much. And so, we had to think differently.
[14:45] And there was one point at which my husband, who was a closet soldier actually. Very, very noble but inconvenient. He would often be called to theatres of war all over the world and as much as that was an amazing and generous experience of him to go, it was also fraught with a lot of danger. I remember thinking, as much that it was financially rewarding for him to leave for four to six months, but [that is] not the way I wanted to raise my family. And there must be another way.
[15:19] And that's when I thought, I think it's time that I gave this a shot. By the time I'd moved to Brisbane, I had studied, got my real estate licence and had thrown myself into property and was surrounded by property people anyway. But I never really stepped from investing to developing until that point, when I thought, you know what, I want to give this a shot myself.
Tyrone Shum:
Closet soldier is not a term that you hear every day. Let’s explore what it means.
Louise Fitzgerald Baker:
[15:57] It's a bit of a joke. He's a reservist, he's an army reservist. So, that meant [that] I married a reporter and [I] had no idea [of] this little job on the side where he would occasionally go off and soldier. [It] would have been, you know, doing his soldiering [and it] would have been an interruption to our lives later on. So, little did I know that every time there was a conflict across the world, he will get invited, not conscripted, but invited to participate and disappear.
[16:28] And sometimes in really quite dangerous places where communication would be cut off. And so, that was not a lifestyle I imagined I'd see myself in. In places where suddenly I'm raising the kids really alone, and having to think about the basics of well, what if he doesn't come back? And how does that leave me? So, there was that, I say tongue in cheek closet soldier. But essentially, it's not like I married a soldier on an army base and had the support of a whole base and free dental and health care and all of that to cushion me. I was essentially a mom in the suburbs, with a husband that would disappear for months on end, in places where he may not ultimately return.
[17:23] So, and he was a very conscientious participant in that. Just like if you are married to a fireman and it's Christmas, and there are fires across the country, they disappear. And, that cause is always going to be bigger than what's going on at home. And that's what you become part of whether you realise it or not. But I didn't really realise that the guy I'm married was a TV reporter. You know, he was come home every night.
[17:57] So, I guess I got a little surprise along the way where I thought, gosh, this is working out a little differently to how I imagined. And one of the compelling components beyond his worldview, which is very generous and very much big picture, and he's got a real social conscience. [It] was the idea that of course, we were remunerated well for him disappearing. So, I guess there was a small part of me that went, if I could insulate us financially, then maybe he wouldn't disappear quite so much.
Taking the Leap
Tyrone Shum:
In hopes to create some financial cushioning and keep her husband home, Fitzgerald Baker took a leap of faith and jumped into property development.
Louise Fitzgerald Baker:
[18:40] That was really where I said to him, 'you know, I really want to give this investing, take it to a next level and have a go at developing'. And he said, 'well, what do you want to do?' And I said, 'look, I want to buy these couple of houses and knock them down and build some townhouses.' And he said, 'well, what's the worst that can happen?' And I said, 'well, you know, the worst is we lose everything. Everything. The house, all our life savings'. And he said, 'okay'.
[19:19] He said, 'you've got my blessing'. You really do need your partner to back you on something like that, because property is not for — property development is not for the faint hearted. Property investment, different kettle of fish. You can set and forget, sit on it much like you might do shares, you know, blue chip shares, you can sit on it. And really over the course of time, the likelihood that you're going to really lose a lot of money is unlikely.
[19:52] You just buy steady, you do your research, you buy well, and you set and forget and then you just manage the numbers on the way through. And then hopefully with the uplift and capital growth, you're compensated well for over time. But property development is a whole different kettle of fish.
[20:10] You really, in my experience, a third of developers make excellent, excellent income. A third for all their time, effort, sweat, and tears will probably break even. And a third will lose money of varying levels, they will lose. And they're not the ratios you hear in the world. If you look at Property Investor magazine, it's everyone's a winner but in real life, when you're out there you see quite differently. It's not a fool's game and you have to have the stomach for it.
You Need the Stomach for Property Development
Tyrone Shum:
Fitzgerald Baker says that you need to have the stomach for property development and sometimes, this can be taken literally.
Louise Fitzgerald Baker:
[21:43] I was actually buying some property for some clients. So, I was a buyer's agent for them. And essentially, we had scoped the market, they were looking for a house and they had instructed me to buy this particular house for $450,000 at the time. And this is probably not my worst moment, but this is just an example of what it can be like for certain people as they get their head around property. And I realised that not everyone has the stomach for it.
[22:30] So, on this particular occasion, we've done the research, they had recently missed out on a property down the road in the suburb. And so, the instruction was clear — it was Louise, go in and secure the property at $450,000 and do it today. And I said, 'look, my advice is to, I don't think that's in your best interest. I think you can get it for better than that'. And on this particular occasion, it was going to auction, and I suggested that we go and bid at the auction.
[22:50] So, of course we attended the auction and I say, 'Look, my expectation and hope is that we can get it for you between $420,000 and $430,000'. And on that particular day, we went to the auction, we bid to $420,000 [and] it got handed in and the negotiation was with us. And that strategy was fairly deliberate so that we would be the first and only people that would come to at that point to begin the negotiations post the purchase. And on that particular day, we ended up securing that property and getting that for them that $420,000.
[23:28] And it was so funny because these people were not with me, they were over the phone and I was relaying to them the strategy — which was essentially we're bidding, we're bidding to $420,000, we're stopping, we are now negotiating, and we are pausing. And in that time, I hadn't realised that one of the parties on the other end of the call was vomiting. Just vomiting with grief and despair and anguish. And I remember saying to him at the time when his wife was saying don't tell anyone. And later on, we had a giggle about it because of course they got it [for] $30,000 under what their instruction was but I said, 'remind me never to do property development with you guys'.
[24:26] So, some people just don't have the stomach for, or the risk or the appetite for that type of negotiation because sometimes you do have your heart in your throat. And I remember on one occasion, [it was the] same sort of thing on a bigger scale where I was securing my own property, and I was standing firm at a price, and it was an excellent price and the seller ended up standing firmer and basically declined the sale. Basically, decided not to sign a contract.
[25:02] And it really can come down to he who blinks first, because it was really who wants this more? And in the case where all the evidence was suggesting that he should have signed this at that price with those terms, he just said no. And sometimes you can't know what the other party is doing in a negotiation. So, there's just some funny times where you just have your moments where your hearts in your throat, and you can't control who's on the other end of the phone, or who's on the other side of the contract, and how they're gonna respond to your position, your bluff, or your move.
Tyrone Shum:
Property development can almost be described as a game of poker.
Louise Fitzgerald Baker:
[25:43] It can be in fact, you know, I think the song, Kenny Rogers song, The Gambler —you got to know when to hold them, know when to fold them, know when to walk away and know when to run. Really, it comes into the game because you do need to know when to walk away and when to run. And I've had to hold them, fold them, walk away, and run in every deal. You have to make a call fairly decisively and say, 'I'm walking away at this point', or [say], 'I'm out'. And just not looking back because you can't second guess yourself, you have to be clear enough to know your strategy, stick to your strategy and not get emotional about property.
Tyrone Shum:
Over her time developing, Fitzgerald Baker has had some other experiences where everything did not go to plan.
Louise Fitzgerald Baker:
[26:57] We've had one project, for instance, where the criteria, we just had a series of three things go wrong. And I find that you can normally take one or maybe two hits if you're good Tyrone, but if you get three, it can be really tricky. And on this one, it was actually a small project. It should have been straightforward. It was a little four pack in an area where it was zoned for development. It was zoned for low to medium residential. So, it should have been really straightforward.
[27:30] But on this particular occasion, we had 50 submitters against us. One guy had letterbox dropped the plans to everyone in the locality. And actually door knocked and ended up getting a series of marks against us. Which was just unprecedented and actually the law really wasn't in their favour. Because it's not as though we were changing the zoning, we were completely compliant in everything we were doing. But that was the first strike where we had, it took time just to go through a process that we hadn't scoped, envisioned, or imagined or even allowed for financially. And even though there was no jeopardy there, there was no real sense that we wouldn't get it through. It was just the time and the interruption.
[28:20] And then the second thing that happened was when the conditions came through, they were arduous. So, council had decided that they were going to increase the compliance on this particular block. And what they did was they required a level of engineering that was disproportionate to the size of this development. It had culverts under the ground that you might see in major engineering feats but on this particular four pack with no particular slope, it was completely disproportionate and over-scoped. And that was the second thing. We probably hadn't seen it. We didn't have the experience. This was early on in my career. We didn't have the experience to truly understand what compliant, engineering compliance on that scale would have cost and look like.
[29:12] And the third thing that happened, it was a time in Queensland where they decided to change the contributions. So, the taxes that you pay went from $15,000 a box to $28,000 a box overnight. So, we really had a triple whammy on that little, tiny deal. And when you're doing 20 or 30 or different, but when you've got four, your margin of error is very small. So, on that particular project, we could have sustained one hit or two but as I said, three was really quite tricky. And that was an occasion where we really had to manage our position to get the project done, delivered, sold, and just move on.
Tyrone Shum:
As a result of these three setbacks, Fitzgerald Baker only made a small profit.
Louise Fitzgerald Baker:
[30:10] It was probably $11,000 or something, but that, my job really became in the end, not losing money. That really became the task. Because the odds were against us, the market was flat, our costs have gone up and we were releasing, we didn't have the favour of running market. And really, the market can be very forgiving. So, you could sustain a few hits like that if you're in parts of this country where the market was just running at the time, and you had the opportunity of capital growth to be able to fall back on. But we had a static market to release to and so, the deal then became making sure we and the investors involved didn't lose anything. Having said that, it was years of my life that I didn't get compensated for.
[0:01] Fortunately, we don't have many like that. But when it happens, you just have to be decisive and strategic in your approach and unemotional.
Follow Your Instincts
Tyrone Shum:
As well as some rocky experiences, Fitzgerald Baker also has numerous success stories from her time developing property.
Louise Fitzgerald Baker:
[0:27] I don't think there's ever been a deal where everything just clicked. I think there was one occasion where we were doing 12 units on a site and I really, as a boutique developer I was very careful in my design phase. I would always, coming from a market research background, I would anticipate trends that were not here yet and build for what was to come and not currently in the market, rather than copying what was already there. And on this particular block, they had the most beautiful poinciana tree to the front and I remember we had the ability and permission to remove it.
[1:06] But I remember thinking, 'ah, it'd be so beautiful though if we kept it'. And some of my colleagues were saying, 'you're mad, you're mad. You could have really, you could squeeze a few more units on that block. Keeping the tree, it's too sentimental. You're thinking with your heart, not with your head'. However, I couldn't bring myself to remove this beautiful 80 year old poinciana tree with bright orange flowers. So, I designed the project around it.
[1:37] We had a 11 metre setback, not a six metre setback. And we went to council cap in hand and said, 'we really want to keep the tree. Would you give us a relaxation on the number we can put behind it so that we're not penalised for keeping the tree?' And they really came to the party. They saw the sentimentality of what I was trying to achieve, and they really applauded it. And so, we built this block of units, they were essentially units but with large gardens for the ones to the front, almost like townhouses. And it was only three storeys.
[2:15] But essentially, around this beautiful tree. And we use the colour schemes to contrast. So, it was a dark blue, so that it could help, with against the orange flowers it would just pop. And the council loved it, the clients, the buyers loved it. And it's been timeless and has held the test of time. So, yeah, that was probably an example where everything just came together beautifully and seamlessly.
Tyrone Shum:
Although Fitzgerald Baker had no obligation to keep the tree, she knew it would be an asset to her project and fought to keep it.
Louise Fitzgerald Baker:
[3:11] It was a refreshing and untested terrain actually, to go to council and say, 'this is the design we'd like to put in, and do we have your blessing to do so?' But what we needed from them was in not building further forward, could we still create the design using the space that we had left? And would they allow that to happen? And in this particular case, the counsel really loved it, they said, 'we see what you're trying to achieve. It's boutique, it's different, it's beautiful. So, yes, we will allow you to save the tree, do an 11 metre setback, give you that relaxation, but give you the ability to do the number of units you would have had otherwise'.
[4:06] And so, that was a real lesson in there are sometimes human beings on the other side here. Sometimes we can assume that as property people that we're on one side of the fence and councils on the other and it can feel a little adversarial sometimes. But I have found that if you have the right intentions and you're able to articulate clearly what you're trying to achieve and you speak to the people that have a similar philosophy to you, they can listen which has been really refreshing.
Tyrone Shum:
Coming up after the break, we’ll explore the details of how Fitzgerald Baker got into property development…
Louise Fitzgerald Baker:
[5:53] I was reading Property Investor magazine, cover to cover, every month that it came out and [I] would study it and read it.
Tyrone Shum:
We’ll hear about the deal that kicked off her property development career…
Louise Fitzgerald Baker:
[14:45] That really took off my property development career.
Tyrone Shum:
Fitzgerald Baker will share the value of having a routine…
Louise Fitzgerald Baker:
[28:50] I do the same things every day. I think consistency is helpful in a world that can be strategic and change quickly.
Tyrone Shum:
And that’s next. I’m Tyrone Shum and you’re listening to Property Investory.
Research, Research, Research!
Tyrone Shum:
We’ve heard about why Fitzgerald Baker decided to get into property development. Now, let’s explore the strategy that she used when taking those first steps.
Louise Fitzgerald Baker:
[5:53] I was reading Property Investor magazine, cover to cover, every month that it came out and [I] would study it and read it. And then I'd go to a lot of auctions and watch the property prices. And I studied the market for eight months before I bought my first property. I was hellishly conservative; I had a lot to lose. So, I wasn't going to bet the house, unless I felt really confident that the market would be supportive of what I was trying to achieve. And then I think I got to the stage where I just thought, I feel I know intellectually everything that I can probably know about this. I now really need to throw myself in and just do it.
[6:38] Because it's a bit like you can read about what a cake tastes like, you can see pictures of it but unless you bite into it, you really can't say you've had an experience of what that tastes like. And it's a little bit the same. You can devour as many magazines and journals and articles and blogs and vlogs and turn yourself inside out. But at some point, you just have to play. And that was really where I got to, and that's really with his blessing.
[7:06] And we've been tested over the years. There has been the odd project where we've had to look at each other and he's gone, 'yep. Okay, we'll ride this through'. So, you need that support because it would be terrible for a party to be a fair-weather friend, where they just say, 'yes, I'll support you if you win and if you don't, I'll remind you of it every other day'. That would not be fun at all. So, you just have to make sure that you're either playing with money that you are prepared, not wanting, but prepared to potentially lose if you're going to go into property development.
[7:42] But no one ever expects to, but you just have to be mindful of the risk. And not everyone has that appetite. Not everyone has an appetite for risk. But as I said, back in those days, property was the vehicle to be able to catapult your position from just surviving, to actually getting ahead. And that's really why I chose it because it was familiar to me, it made sense and it was an avenue that I'd seen could take you from survival to thriving and that's really where I wanted to be.
[8:13] Whereas these days, as you know, there's a lot of other vehicles. There are online businesses, direct selling, virtual franchising, affiliate marketing. There's so many other ways that you can generate cash flow from home and in your own time and space. But back in the days that in the 80s, you know, 90s, when I started developing was really 2007. It wasn't like that. We didn't have that many avenues. So, I had to just play with the chips that I was dealt.
Tyrone Shum:
After doing research for eight months, how did Fitzgerald Baker know it was the right time to jump into the market?
Louise Fitzgerald Baker:
[9:12] I had done my research. I bought two properties. I had two houses side by side three kilometres in the city. I thought well, they're not going to go down in value and they were already zoned low to medium residential. So, I knew I could do something with it. So, my first point was getting my foot on it. Getting a sense of what was possible, finding through town planners what is possible and probable for that block, and then once I get a sense of the price, then the first part was just getting my foot on it.
[9:44] So, securing it under contract with a clause that would give me the ability to do my due diligence safely, but secure the deal in the meantime. And at the time, I had a one and a half year old and a five and a half year old and a seven year old. And so, I remember being there with the baby when we're doing this deal and it was really you don't know what you don't know sometimes, Tyrone.
[10:09] Looking back, it was a really gutsy move. But at the time, I remember thinking, this really would work. I can't see a reason why it can't work. I've done my research, [it is] three kilometres from the city, it's zoned accordingly. I think it's really got a 99% chance of doing very well for us. And so, what followed on that particular deal, it wasn't seamless, but it was a three year project. A lot went right, and a lot went wrong. And it changed my life at the end of it.
Life Changing Deals
Tyrone Shum:
Having the guts to make this deal is a decision that changed Fitzgerald Baker’s life.
Louise Fitzgerald Baker:
[11:00] I didn't know what I didn't know. It was 2007. It was a high point in the market in Brisbane. It was three kilometres from the city, and it was a property along the rail line. And it was two houses. One was really a ramshackle house that had to be pulled down and it was an eyesore to the front. And then there was quite a lovely house to the back, which I moved and sold off the property. And then what I had designed, and I had envisaged was, I was going to put two freehold townhouses to the front, and then eight body corporate ones to the back. And then I'd sell the front two for more of a premium because they were on the street quite a bit from the rail, and then the ones along the rail, they would sell for a more affordable pricing.
[11:51] So, that was how I had envisaged it working. And at the time, I remember the bank ended up, you know, I had no experience. And we haven't costed in the GST, and I remember having a conversation with my bank manager, and he said, 'well, whose paying the GST?' And I said, 'well I'm not, I haven't got it'. And he said, 'well, we're gonna have too then'. That would never ever, ever happen. But back in the days, it was just one of those, it was the timing was quite lucky so that someone like myself with virtually no experience, but with a lot of research. And I guess I could talk my way through it to the banks to sell it to the banks. I had the ability to then go for it and I had to use all our property, our home, we borrowed against everything we had.
[12:44] So, that's where we really had to put our money where our mouth is. And that's where I had the husband's blessing to say, 'well, if we lose, we lose it all, right?' And essentially on that one, I ended up going with a builder that I knew and trusted. That was the good news. The bad news was he had a foreman that wasn't trustworthy, and he was losing money on that job, and the foreman wasn't turning up, and he was selling air conditioning units. It was really quite dodgy.
[13:13] But in the end, and so the build was delayed. Delay, delay, delay. And I remember thinking is this ever going to end and then eventually we finished it, and we were just in time to release into the global financial crisis. And I just thought, 'ah, here we go'. But I ended up selling the front two, and I sold them, and we made the profit that we expected, and we refinance the back, and then eventually went on to sell them. But that actual project meant that after three years of living hand to mouth, eating baked beans, and just having to really, really be mindful about — I was working a full time job plus managing this project on the side and my husband was working and we had three small children. It was a really heady time.
[14:05] But when we got to the end of it, I remember we had sold the front two, pretty much paid down the majority of the remaining debt, refinance against the rest and we were financially, I remember the bank said you're financially free. And we could have just held those units and really had a nice steady income and replaced a wage forever. And so, I remember thinking, wow, this property gig is amazing. That is amazing. And it felt almost like being in a really dark place for several years and then suddenly getting to the end and the light that we came through that tunnel, and we could see the light and I suddenly, and then that really took off my property development career.
[14:48] So, I went on to build about $42,000,000 worth of property over the next 10 years during school hours while the kids were at school. And that's sort of what the game I played. So, that really gave me the confidence and courage and for investors as they began investing with me in the early days, they were sophisticated investors, and they knew of my level of experience.
[15:18] And so, some of their returns and some of the projects were a 65% annualised return, in compensation for them trusting me before I had the runs on the board. And then once I got the runs on the board, I got more sophisticated in the way I could structure it so that I wasn't paying as much money for money. And that's often the trade-off you have to make between experience and trust.
Tyrone Shum:
Throughout the time that Fitzgerald Baker was developing $42 million worth of properties, she stuck to a strategy of taking one step at a time.
Louise Fitzgerald Baker:
[20:01] I did everything from four packs to 12 packs to up to 30 units in a block. And I used my intuition to be able to anticipate what the market wasn't currently seeing enough of yet and building to that. And then I only did one development at a time. I found, I did try to go through a period where I do multiple, but I found for me particularly was the risk, I just wanted to give all my time, care and attention to one at a time. And that worked really well for me.
[20:39] And then just basically carefully stepping ones not getting ahead of myself, and not getting caught up in it. Because when you're in property development, it really can become, you really go into it. I went into it for lifestyle Tyrone. I went into it because I was very mindful of the world [that] I wanted to create for me and my family. The pink Hard Hat is a metaphor for insulation, you know, to insulate yourself. When you go into a worksite you wear a hard hat to protect what's important, and you wear high vis vest to stay feasible, and steel cap boots to give you confidence to wherever you want to walk on the site.
[21:17] And my message to women is wear the hat, stay visible in your relationships and be confident enough to walk freely constructing the life that you want to design. And I think that essentially, from that side, it's about mindfully creating the world you want to be in rather than just getting caught in the hamster wheel of 'I finished a deal, now throw all my money into the next deal'. And then you almost heave into the next deal and cannot enjoy it.
[21:48] So, I was really deliberate about starting a project, loving the project, really enjoying the design and what I was going to create. I would celebrate the end of a project with a great party and invite everyone that was part of it, and we would almost birth the project. And then I would celebrate with my family because it can often be a long time between drinks, it could be three years. And sometimes you get to the end of that three years, and you didn't make money. And sometimes you did, and that ship would come in very well. And sometimes it was just a small boat, but we would just say, 'right, what are we going to do with that?'
[22:26] And then I was really mindful about enjoying those times because I didn't want to be one of those people that just went one deal done, now the next deal, now the next deal. Because then why are we doing it? Either, then we just become, we're just in a job then. We just bought ourselves a job. You know, the whole reason we choose this vehicle, much like any other vehicle, whether it be direct selling or whatever it is, is because we want a lifestyle, and we want money working for us. Not us working for money to the point where we forget to enjoy what the whole point is.
One Step at a Time
Tyrone Shum:
Taking things one step at a time is the advice that Fitzgerald Baker hopes to pass onto others.
Louise Fitzgerald Baker:
[27:10] Take it one day at a time, one step at a time, don't get too ahead of yourself, and enjoy the journey along the way. [That] would probably be it. And don't compare yourself to what others are doing. Just keep your own, keep your blinkers on so that you stay in your own lane. We all have a lane on this highway, and we all have different cars, and we're all going at different speeds. And some of us pull over, others are speeding along, and it can be easy to be distracted at what others are doing and how fast they're going and the car they're driving.
[27:44] But I would just say stay in your own lane and be mindful of the pace you want to go at and the vehicle you want to use and be part of and the music you play while you're doing it. So, really just be at peace with that and surround yourself with people that are doing that already. Today, with podcasts like yours, and Instagram, and Facebook groups, and everything, you've got so much more at your fingertips than I had growing in this business. People are way more reachable than they used to be. So, use that to your advantage without becoming overwhelmed.
Finding New Success
Tyrone Shum:
While taking a break from property development, Fitzgerald Baker continued building success in other areas.
Louise Fitzgerald Baker:
[16:22] I've actually stepped aside from the property for this time in the market, because I often work within a radius of where I live, so that I can be intimately involved with the deals rather than working interstate because I'm bringing up a family as well. And so, for me, the risk became disproportionate to the return for the area that I was working with, unless I decided to move into a different asset class and just do house and land developments or something slightly different. And I didn't want to move into a different avenue.
[16:53] And also my stage of life changed, you know. So, I'm now at a point where I thought no, I really want to go into cashflow, positive businesses and opportunities that have virtually no risk. And so, I've changed what I'm doing next. So, in regards to that, I wrote the book, the Pink Hard Hat: Building Resilient Women. And that's really the story of generational resilience across the three generations of women in my family. And my mother's one story I've shared with you today, but there was also, it started with my grandmother and then it goes on. And then I've got three daughters and how I'm teaching, educating, and equipping them to grow into this world, and know and understand and use money as a teammate.
[17:36] So, the book itself was about generational resilience, money 101, and how to recover your position when life deals you a blow you didn't expect, and then in raising the next generation, what are we doing? So, I wrote that book, and then have seen in the last year, we launched that in February. National Australia Bank launched the book. And what I've been speaking and doing a lot of speaking to corporates, and companies about really leadership growth, financial contribution, women's roles in that and all of those pockets.
[18:14] So, that's really been an area that I'm working with now. Virtual franchising and other income streams, particularly I have a heart for helping women make a financial contribution as their life shifts and changes. So, that's been a real passion for me, and I guess in the future, so I still have property. I've now stepped back into a silent, more investing role, both in residentially and commercially. And [I] just sit and wait the market out until it becomes more compelling and irresistible to play.
[18:49] And then when I do go back into it, it will be in a different space. I anticipate it will be more around tiny housing and housing for pockets of the community that are not currently accommodated with great dignity. So, the fastest growing homeless demographic in this country is women over 55 and that's really alarming and scary for me to see and I can't really sit by and watch that. So, I'm really certain that my future will involve somehow being part of a solution for that demographic so that they can age with dignity in places that they're proud to be in.
Tyrone Shum:
As well as her own book, Fitzgerald Baker encourages the value of other resources.
Louise Fitzgerald Baker:
[25:03] The Property Investor magazine. Obviously, my brother's book, which is Seven Steps to Wealth, he's amazing and has written that book, that's a great one. And it's all about, you know, buildings don't appreciate but land does. For me Property Investor magazine was useful because it showed a lot of people doing the deals that I was wanting to do, and it gave the numbers. And at the time, I was hungry for that detail to know I'd be okay.
[25:36] So, wherever you can get access to information that is an open book, on the numbers as well. I think Barefoot Investor was a great book as well. I really enjoyed that and because it sort of simplifies the journey of just one step ahead at a time and also know what financial abundance is for you. It may not be a big house. Some of us can be over committed with that. It might be the simplicity of knowing that you are going to be okay, you've got your house paid off, as humble as it is. And you're able to travel and be present with your kids.
[26:16] There's so much in that and the older I get, the more I realise the importance of that. That it is not about money and wealth, because that's the whole point, then you know when you can leave. Then you can step elegantly away and say, 'I've had enough thank you. I'm ready to play a different game, I'm ready to do something else'. And my whole identity is not tied up with this deal or being necessarily a property developer. It's okay because I'm reinventing myself for my next chapter.
Sticking to a Routine
Tyrone Shum:
In order to find success, Fitzgerald Baker pushes the importance of having a daily routine.
Louise Fitzgerald Baker:
[28:50] I do the same things every day. I think consistency is helpful in a world that can be strategic and change quickly. And so, for me I had to work out what helps me keep a cool head and so for me, it's little things. I wake up at a certain hour, I make sure I run seven or eight kilometres, I put my headphones in and I'm listening to positive uplifting music or podcasts or information. I come home, I clean the house until 8:30 which sounds really strange but and then I go to work and take a cup of tea, and hopefully I don't spill it on my keyboard, and I go to work. And then I literally work until the children finish school, and then I have time and space with them and go into the evening being available to the kids.
[29:50] And it sounds like a really strange way of talking even about housework, but what I actually found was if I contained those aspects within a day, I could return to a home that was ordered, and everything, it just seemed to me that I could cope with anything. When the house was organised, everything was ordered, I could build wealth between school hours, and then create a nice home as well. Which sounds really old fashioned now I'm saying it out loud but that's what's worked for me. Those little habits of making sure I was contained, the house was concise, everything else was running smoothly, and then whatever happened in the business between those hours, I could manage it. So, that's how it worked for me.
Tyrone Shum:
Fitzgerald Baker shares what she would say to herself 10 years ago, which may be helpful for those at the start of their own property investment journey.
Louise Fitzgerald Baker:
[31:03] Enjoy the ride girlfriend. Multiple income streams. That's the really the big lesson for me and that's what I'm teaching my girls. My daughters are now 19 and 17, and for them, I've already got them learning about multiple income streams. Learn to generate income from multiple stations in life so that as you evolve, and become parents, and become whatever it is next, that money doesn't ever become something that you feel is going to hold you back.
[31:36] That you've got that magic superpower that you can generate income in whatever you're doing. And that's what I teach my kids so that they're confident as they navigate their way through life, and never feel behold and they never in a situation or a job, or a relationship where they're feeling less because financially, they can't squeeze out of it.
Luck Versus Skill
Tyrone Shum  
[31:59]  Last question is, how much of your success do you think is because of your skill and intelligence and hard work, and how much of it is because of luck?
Louise Fitzgerald Baker:
[32:14] There really is an element of luck in this. I would love to say it's all about skill and intelligence and hard work but properties are a game and sometimes you just need a little bit of luck, or God, or universe or whatever you want to call it. Because there are times where and there's an element where it's out of your control. And it's difficult to put a proportion to it. I really come from the place, I do think if you have the personality, personality is another part.
[32:47] Like skill and intelligence is one thing but to be honest, I think it's as much about discipline, your personality, tenacity, and just I think if you've got the discipline, personality and tenacity, then no matter what life will dish up — whether it's the 2011 floods, whether it's the 2009 GFC, whether it's the war on terror in a couple of years ago when your husband leaves stage west, whatever it is that life dishes up, you've got the wherewithal to grow through it and not implode. And that is really a function of discipline, tenacity, and personality.
Tyrone Shum:
Thank you to Louise Fitzgerald Baker, our guest on this episode of Property Investory.