Property Podcast
Large Scale Developments with a Business Minded Approach: The Ellerson Development Journey Part 2.
February 17, 2021
Remon Fayad is the co-founder of property development cooperative Ellerson Property. With two decades of high-level Australian property and construction industry experience, Remon and his brother know it all. Launched in 2020, Ellerson Property aims to deliver the next generation of apartment living in Australia.
In this episode we continue our conversation with Fayad as he reveals his business strategy for the future, we learn about his most influential mentors, the harsh but necessary lessons his father taught along the way, and he shares the time he lost out on hundreds of thousands of dollars due to being too eager to close a deal.

Timestamps:
0:59 | AFTER A WHILE, THE BROTHERS REALIZED THERE WAS A BETTER WAY OF DOING THINGS.
2:05 | THE CC STAGE IS WHERE THE NITTY GRITTY STUFF HAPPENS.
5:46 | FAYAD AND HIS TEAM ADAPTED THEIR METHODS AROUND SALES FROM THAT POINT.
8:33 | IN THEIR BUSINESS, THEY DON'T RUN THINGS IN THE TRADITIONAL SENSE.
10:38 | ‘I FELT LIKE SUPERMAN AFTER THAT.’
11:48 | HIS DAD TAUGHT HIM A VALUABLE LESSON.
15:27 | SURROUNDING HIMSELF WITH BUSINESS MINDED PEOPLE PROPELLED HIS OWN GROWTH.
22:26 | ACADEMICS DIDN'T COME NATURALLY TO FAYAD, HE HAD TO WORK HARD FOR IT.
 
Resources and Links:

Transcript:
Remon Fayad:
5:15 He came around and agreed, and then the market boomed and the product started selling for $700,000 [or] $800,000 that year. So he ended up making more money than us on the side.

**INTRO MUSIC**
 
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 continue our conversation with Remon Fayad, co-founder of property development company Ellerson Property. Listen in as he reveals his business strategy for the future, we learn about his most influential mentors and he shares the time he lost out on hundreds of thousands of dollars due to being too eager to close a deal. 

**END INTRO MUSIC**
 
**START BACKGROUND MUSIC**

Tyrone Shum:
Remon and his brother have already implemented one large-scale development successfully, and they won't stop there. He outlines the scale of works that are in motion for them at any given time. 

Remon Fayad:
0:12 Planning, we'd have, in terms of sites, probably 25. Rough about 25 in planning. There's some that are DA approved, some in rezoning. And then some in construction, there's 2000, probably under construction with about probably another 2000 every year, so it's always turning through them. And then we're always constantly looking for new sites. 

0:45 Now what we try to do is always have five or six big sites under construction. The 400 or 500 units. We found that in the past, you use the same amount of resources on a 500 block of units, than you do on a 20 block of units. 

AFTER A WHILE, THE BROTHERS REALIZED THERE WAS A BETTER WAY OF DOING THINGS.

0:59 So it just wasn't making sense, continuing them in these 20 blocks, you know, so we said let's cut it back, instead of doing 50 of the 20 units, let's do 400 [or] 500 unit developments. And yeah, so we're just cleaning up all that. 

1:11 But to take you through it, there's a planning stage, a CC stage and a construction stage. So if there were 25 projects in planning, there'd always be about seven or eight in CC and about five under construction, and it's just a machine. When one finishes, another starts, another gets acquired, another gets approved. So the machine just keeps churning them out. And we've got the right team.

Tyrone Shum:
1:32 And you mentioned CC, what does that mean for listeners out there?

Remon Fayad: 
1:35 CC is the construction certificate. So once you get a DA approval, it's not the DA approval and then start tomorrow, you have to go through your CC and get your construction drawings ready for the boys on site. Yeah, so that's DA, CC, then construction. 

Tyrone Shum:
1:48 And usually how long does the CC period take? 

Remon Fayad: 
1:52 Depending on the size, it could take anywhere up to two to three months to get a CC properly done, ready to go for construction purposes. So that's your civil drawings, that's your structural drawings, whereas the DA is more just your layout and your building design. 

THE CC STAGE IS WHERE THE NITTY GRITTY STUFF HAPPENS.

2:05 But once you get your DA approval, then the nitty gritty design of steel beams and all this kind of stuff needs to be getting done and that's the CC stage, which is what the building is built off of. The CC plan. It's not the DA plans.

Tyrone Shum:
Having achieved a phenomenal amount in a short time, Remon praises his team for helping to propel the company forward. 

Remon Fayad:
2:40 It's the support of the team, without you know without having...Me my brother, yes, we're owners, we're co-founders, but without the team, the other heads of each department, we wouldn't be where we are, I always like to refer to this reference, going back to sport. 

2:56 LeBron James is a big idol of mine. And he's the greatest of all time in my eyes. Some people say Jordan, some people say to LeBron, I'm a LeBron man. He's the best today, but he still needs help. You know what I mean? Like he can't do everything on his own. He went out and got Anthony Davis, and they came together, and they won a championship. 

3:15 So I use that a lot in the business world. I mean, you can be the best. But if you don't have the right teammates around you, you're not gonna win anything. So I like to always refer back to that to the staff as well. 

Tyrone Shum:  
He admits that no matter how brilliant your teammates are or how much you plan and prepare, there are always setbacks. 

Remon Fayad:
4:12 Getting a refusal, a DA refusal. Sometimes a setback is like, 'What did I do wrong? How could I have done better?' So it always allows you to just continue. There's nothing wrong with failing. We learn from it. Without getting a DA refusal, or without getting a planning proposal refused, you're not going to know how to become better the next time. 

4:32 In terms of development, maybe jumping the gun or timing has sometimes not been the best. One that we did sell was—I'll give you an example actually, I got a good one—there was a block of apartments that we did about 300 units. We agreed on a price for every unit with the real estate agent. 

4:55 So it was a minimum price that he could sell for. And that was just us saying, 'Yes, let's just sell these things'. We agreed on a price, saying, '$500,000 per unit is what we want, whatever you get above that, good luck to you'. We're going back about 15 years ago before everything was as it is today. He came around and agreed, and then the market boomed and the product started selling for $700,000 [or] $800,000 that year. 

5:22 So he ended up making more money than us on the side. So we still made money. So it wasn't like it was a fail, but it was more about controlling every aspect of a business, from planning all the way up to sales, it was just having that opportunity to learn to control, not to just sign. It's being involved in every single little detail. 

FAYAD AND HIS TEAM ADAPTED THEIR METHODS AROUND SALES FROM THAT POINT.

5:46 So that would be a learning lesson where now, when it comes to real estate and sales, we're really controlling. We've got a sales manager here who will manage that, never lock-in prices, it's always able to move subject to the market. So that was one lesson where I learned that, 'Okay, we need to control our own sales department'. 

6:06 Yeah, that's a big moment. Every time I drive past that development now I'm like, 'Damn, it looks good. Great development'. And that comes back to being involved now in every aspect of the business, not running it so much and telling them what to do, but just making sure you're across everything to make sure each in department, the engine is running smoothly and well-oiled.

Tyrone Shum:
6:31 Talking about actually understanding and running, how many departments would you say you've currently got in your business at the moment?

Remon Fayad: 
6:39 So we've got acquisition and planning, sales, marketing, development, management, property management, accounts, there's probably six or seven. And then there's obviously the construction, which runs itself. But in the development arm under Ellerson Property? I'd say seven. Eight, there's finance as well, so eight departments.

Tyrone Shum:
7:02 So that's quite a lot of departments. I mean, it's no small feat. How do you actually help manage the team without, as you say, being in control? 

Remon Fayad: 
7:11 Again, it's an open office here, everyone walks around, they're talking to each other. It's not, 'Oh, you can't come into my office'. So fortnightly meetings, we've got WhatsApp groups with each team. We're throwing ideas around at each other. So we have fortnightly meetings. But within that fortnight, you can't wait two weeks to make a decision in this industry. 

7:34 So we're in a whatsapp group, everyone will text, 'Can I do this? Can I do that?' My sales manager will say, 'I'm going to offer this but can only pay this'. Rather than wait two weeks, where you can lose a sale. So it's just allowing people to have that freedom. But communication is key. And that's how we get on top of it. Just meeting regularly, but talking regularly as well.
  
8:01 But then after a while, they kind of know what our answer is going to be, just by speaking to us a lot more. Like they know what we're thinking. And yeah, just catching up regularly allows them to understand us more and give them that freedom too. Sometimes they come to me and they'll say, 'This unit's $800,000, the guy can only offer $750,000'. 

IN THEIR BUSINESS, THEY DON'T RUN THINGS IN THE TRADITIONAL SENSE. 
 
8:33 I'd give them their responsibility. I'd say, 'You go do it. What do you think? What do you think we should do?' Rather than them just coming to me asking questions and me giving answers, I want to try to encourage them to be stronger, to make their own decisions. Yeah, that's a way to control it, but at the same time, give them a bit of freedom. 

9:02 And again, not every decision is right. You're never gonna make every decision that is always gonna be right in life. So it's more about learning from it, as well if something did go wrong.

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Tyrone Shum:
Coming up after the break, Remon shares some of the most influential people in his life.

Remon Fayad:
15:27  People coming from nothing, starting from nothing. And yeah, just reading and understanding how they operate. 

Tyrone Shum:
We learn about a great achievement in his early life which motivated him to become a success. 

Remon Fayad:
10:38 So that was early on in my career as well. So that was one where I said, 'You know what, I can.' I felt like Superman after that, when that got approved. I thought nothing could stop us.

Tyrone Shum:
Remon shares the harsh lesson his father taught him after his first successful development deal.

Remon Fayad:
11:22  I'm like, 'I put a year into this. All my hard work. It's my first DA, my little baby'.

Tyrone Shum:
And that’s coming up next. I’m Tyrone Shum and you’re listening to Property Investory.

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Tyrone Shum:
Remon has come across his fair share of setbacks and non-starters, but what about great achievements? He outlines one of his most memorable developments which still fills him with a great sense of pride. 

Remon Fayad:  
9:55 We purchased an industrial site that no-one else would have touched. No one else touched it. Everyone said, 'Nahh, I am not developing this at all. It's industrial, there's no chance of getting it rezoned to residential'. So we picked it up cheap. Got the rezoning through. And now it can be built for 1500 apartments. 

10:15 So something like that is my achievement, because I'm obviously the property and acquisition side of things. So backing yourself and believing in yourself, knowing that something everyone doubted, not doubted me personally, doubted the sight in general...But backing myself to have the belief that I could get this done. 

‘I FELT LIKE SUPERMAN AFTER THAT.’

10:38 So that was early on in my career as well. So that was one where I said, 'You know what, I can.' I felt like Superman after that, when that got approved. I thought nothing could stop us. There's been other learning lessons. I mean, another development earlier on where I think it was my first DA that I did for my old man, it was a 36 storey tower, 400 units, and I got it approved. I was so proud of it. 

11:05  And then maybe a month or two later, he said, 'We're selling this site.' I was like, 'What do you mean? You don't sell sites we build, we deliver'. He's like, 'I've got a good offer. I'm selling it and we can move on and get a few more sites'. 

11:22  I'm like, 'I put a year into this. All my hard work. It's my first DA, my little baby'. And he flicked it. All along, I'm like, 'Please don't sell it. It's mine. Please don't sell it, please.' And then he pulled me aside after that. And he goes, 'Look, this is a lesson for you in life. You develop and go for business with your head, not your heart. Your heart will lead you to family and love. Not to say don't use your heart. But when it comes to business, headfirst and then your heart'.

HIS DAD TAUGHT HIM A VALUABLE LESSON.

11:48  And since that day, I've never fallen in love with a development. Not to say we don't love our developments. But when you do business, it's put your head on first. Because if you go with your heart, you're going to waste time, you're going to get too involved, you're not gonna let it run smoothly–as a business person. 

Tyrone Shum:
11:55 It sounds like your father was a loving man, but also a tough businessman as well.

Remon Fayad:  
12:53 He's donated millions to charities back home in his country Lebanon over the years. I mean, a few million, at least. He'll still go on site and he'll speak to every labourer, every contractor. He never forgets where he came from. 

13:10  He came from nothing. He came out here when he was 17, had no money. It's actually a funny story. He worked in a plastic factory. And about four or five years ago, he was driving past that same factory, and it was for sale. And he ended up buying it. He bought the factory that he first worked in when he came out from Lebanon. He's so genuine, like, he's always there. He's just loving. He's a strong businessman. And he's tough.

13:40  He was tough when we were young, but fair tough, you know, like he wasn't doing anything wrong. He pushed us in sport, he pushed us in work, in school. He wanted us to do well. But without him obviously we wouldn't be here. He's a strong, loving, caring businessman, and a family man.

Tyrone Shum:
His father was a massive influence in his personal and business life. But did he have any other mentors throughout the years? 

Remon Fayad: 
15:02 My uncles and my grandfather, they taught us not so much development, just business, just the business mindset. So I think it would be them. They were involved in property too. So they helped us mature and become stronger. I'd say them and from an outsider point of view, again, business minded people. So your Warren Buffett's, your Richard Branson's. They're inspirational. 

SURROUNDING HIMSELF WITH BUSINESS MINDED PEOPLE PROPELLED HIS OWN GROWTH.

15:27  People coming from nothing, starting from nothing. And yeah, just reading and understanding how they operate. So they would probably be influences and not so much mentors, but influencers. Businesses, whether it's property, whether it's selling cars, whether it's in medical finance, it's business. Business has its structures, and it's called the core strengths that you need. 

15:54  So yeah, reading a lot more about people, other businessmen, helped me know that anyone can do it, it can be achieved by anyone.

Tyrone Shum:
I ask Remon what kind of materials he read to inspire himself. 

Remon Fayad: 
16:26  One of my favourites would have to be Shoe Dog, Phil Knight. The story of the co-founder of Nike, I love it. Yeah, that's such a...That book, I couldn't put it down. I think I finished it in like three days. It was just so good. You pick it up thinking it's about the Nike story, which it is. But you see, it's a memoir by him, written by himself as well. 

16:43 So you could see the passion and how much it actually meant to him. But just from everything, from Nike, to his early journey travelling around the world, getting knocked back by a certain amount of people. The whole book is just, every page has a different twist and turn. So it's like it's a made up story. 

17:05 Like it was that good, but it was actually yeah, just seeing that and now seeing where he is compared to what he was, and how no-one backed him, no-one believed in him, people pulled out of him early on. So that's one of the books I definitely recommend for anyone in general, is looking at reading Shoe Dog.

Tyrone Shum:
Though confident now, he wasn't always so sure-minded. What he would say to his younger self if he could go back ten years?

Remon Fayad: 
18:57 Speak up. And don't be afraid to hold back. I was a lot more conservative. And I held back a lot when I was younger, maybe because I wasn't as confident. But ever since I started talking a bit more. You learn a lot more. 

19:15 So to a young Remon I would have said, 'Speak up earlier. Don't be ashamed. Don't be scared to ask a question. You may look stupid for a minute if you ask a question now. But you look even stupider in 10 years if you didn't ask that question'. 

19:33 So just yeah, be open and honest. If something's on your mind, talk it out. 

Tyrone Shum:   
20:02 We talked about, you know, the property developments that go on for like 10 years and 15 years and so forth. You guys are very big, long term planners. But what do you foresee Ellerson Property to look like in five years time?

Remon Fayad:  
20:14 In five years, I think we would have created quite a few communities. Like I said, that's what we're trying to achieve now. Development that we can be proud of, the development agency that everyone knows about, the go-to property developer in Western Sydney, first and foremost. 

20:32 But in five years time, I'd want us to not necessarily grow to thousands of staff, I think it's always better to keep it lean and agile. So I'd want it to be a well known well respected brand that people are proud to say that they live in an Ellerson apartment.

Tyrone Shum:
20:50 Excellent. And what about for yourself personally, what do you see for yourself in five years time?

Remon Fayad: 
20:55 Hopefully, probably married, I'd say. So I'd say in five years time, subject to COVID and travelling, I'd say married with maybe two kids. I'll put it at two for now. And just continuing to get better, always wanting to learn.

Tyrone Shum:
Remon is a motivated character with a strong work ethic. But is his success all down to hard work, or is it also down to luck? 

Remon Fayad:
21:39 You need a combination of everything. I'd say the majority is hard work. Let me do it percentage wise, I'd say, hard work would be 60%. Intelligence 20%, 15% skill and 5% luck. I think everyone needs luck. You need luck in everything. 

22:06  Whether it's timing, you don't know when the property market is going to boom, so that's part of the luck. But nothing can stop hard work. I mean, if you're committed if you're focused, the hard work will then help you become intelligent and skillful. So you can't become skillful and intelligent without working hard. So I think hard work is always the key. 

ACADEMICS DIDN'T COME NATURALLY TO FAYAD, HE HAD TO WORK HARD FOR IT. 

22:26  And from a young age, yes, we were blessed to be born into the family business, but my parents wouldn't have given us what we have if we didn't work hard. I wasn't the smartest kid in school, I wasn't 90 in my HSC's and flying colours of every test, I wasn't smart at all. So I had to find another way to become more of a businessman. And that was through hard work. 

22:52 It was, it was through working hard, or through learning, being willing, really willing to learn, willing to listen and willing to understand. Yes, I came from a successful family, but it wasn't, 'I know everything, listen to me'. Anyone I'd listen to. I put myself on the same level as all my friends, there was never a time where I thought I was better than anyone. So yeah, I'd say hard work, intelligence, skill, then luck. 

**OUTRO**

Tyrone Shum:
Thank you so much to Remon Fayad for taking the time to speak with me on Property Investory.


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