Property Investory
Mike Day on Fire and Ice (And Property Development)
July 16, 2023
Mike Day is the Canadian-born Sydneysider who heads Apexx Developments— with a double X for the X-factor he always provides. As Managing Director and Chief-Fireplace-Putter-Innerer, he brings a sophisticated and opulent edge to his developments not often seen in the harbourside city.
In this episode he breaks the ice by explaining all about ice hockey, one of the many sports he grew up loving and playing. While he’s now on the other side of the world, his passion for sports hasn’t wavered, though it does look a little different! After trying his hand at renovation, managing restaurants, and taking care of $50 million portfolios, he’s now focused on meditation, manifestation, and shiny blue new things— all while maintaining his passion for sustainability.

00:36 | From Snow to Sun
04:07 | Taking Time to Recentre
10:53 | Coming from Canada
14:26 | The Journey
16:38 | Sports, Eh
18:46 | Lacing Up the Skates
23:31 | Persistence is Key
29:48 | No No Reno


04:23 | Cookie Cutter
06:50 | Inconsistency
09:34 | Assume Nothing
13:26 | Attention, Renovators
18:24 | Day’s Development
21:56 | Boutique
26:14 | Planning on Profits
34:46 | Past, Present, and Future

Resources and Links:


Mike Day:
[00:27:17] With property development, you can choose the people you want to work with that align to your vision, that align to your goals, that care about the outcomes, and you can nurture that. So it took a little bit of time, but we got there in the end.


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 Mike Day, the Managing Director of Apexx Developments. He shares what it was like growing up surrounded by snow rather than the sea, his unique approach to life, his Fortune 500 background, and why he wouldn’t touch a renovation again with a ten foot hockey stick.



From Snow to Sun

Tyrone Shum:   
Day named his company Apexx Developments, with an extra ‘x’, due to his inclination to add the ‘x factor’ to everything he does. Originally hailing from Calgary, Canada, he swapped snow for sun and took his business and project development skills to Sydney.

Mike Day:   
[00:00:36] I'm the Managing Director, I look after all aspects of our business, from project management to all the legal side, all the directorship titles that I take on when we bring investors on to buy property. So handling all the annual accounting, taxes, everything from a director role. 
[00:00:36] Then I take on the full PM end to end management, looking at handling all our builders, all our contracts, all of our legal requirements, all of our material selections, everything. 
[00:01:12] So depending on the cycle that we're in, in the development process, Tyrone, my days can really vary. Like this week, I'm setting up a strata corporation, I'm negotiating refinancing now that one of our units is sold to get rid of seven eighths of our debts. And I'm juggling our builder, and we just achieved occupational certificate yesterday on my current development. But six months ago it would look totally different. 
[00:01:42] What we offer is a complete end to end service with everything where the investor basically doesn't have to do anything other than tune into a fortnightly investor meeting, hear the updates and then in the tail end, I actually start providing updates daily through Facebook Messenger or another type of messaging app where we post pictures and videos. 
[00:02:07] And I give them an update every single day on everything that we're progressing from either the build to anything outside of the build.

Tyrone Shum:   
He works closely with different consultants and his team to manage the day-to-day as they work together to achieve their goals.

Mike Day:   
[00:02:34] The team is the most critical part. So I've got marketing teams, I've got legal teams, I've got builders, all my design consultants, and I leaned on them quite heavily. 
[00:02:47] And then even so much so to developing rapport with the sub trades of the builder. So the electrician has been really critical in my current development. And so have a few other key people, so making sure everything's set up, especially when it comes to developing a really high end luxury residence, like what we're doing down at 14 Bulls Road, which is my current development, and we entitled it Azure because it's on the water. 
[00:03:15] But one of the key elements we're discussing, just to give you a flavour, having meetings with electricians and security guys to make sure the lifts [work] because each residence has its own personal lift in it. 
[00:03:29] So you have to make sure that everything's functioning and running. And the security system is communicating with the control for automation system we've installed in the house that controls everything. So it can get pretty complicated in certain aspects. And you really need to have the right team to be able to get through and manage everything that you need to get done in a day.

Taking Time to Recentre

Tyrone Shum:   
While his typical day at work varies, his morning routine is a little more predictable.

Mike Day:   
[00:04:07] [A] typical day is trying to wake up and start with 20 minutes of yoga and a 10 minute meditation with my fiance. I'm not always successful in finding the time for that every single day. But I find that it really helps me to just relax and recentre in the morning before jumping in the shower and getting on with it. 
[00:04:33] The days can be sometimes quite long in the sense of right till six [or] seven o'clock you're still on the phone dealing with [things]. The builder will take calls quite late because the service that we get from our current builder is amazing.
[00:04:53] But yeah, you're just in and out constantly all day long. And then at the end of the day, I try to get to the gym, and finish off with trying to look after myself and have a really healthy meal.
[00:05:08] I've really completely changed my lifestyle in the last... since COVID. We've pretty much just cut out everything. It's really lean, very healthy eating, and it's really helped sort of centre my mind, my body, helps me focus and coffee helps too.

Tyrone Shum:   
Sometimes their meditation features calming nature sounds, while other times they prefer a voice to guide them along.

Mike Day:   
[00:06:39] And generally, it's more of an energetic meditation. So really getting your body to relax so that you can really focus in on what it is you want to achieve during the day. What are your long term goals?
[00:06:57] And then at the end, my fiance and I always say, 'Let's do the last five minutes'. And there's a little gong after every five minutes so that we know when to change our focus. So it's like, 'Gong!' And then okay, that's that five minutes. Now I'm going to focus on this and really put out to the universe what we're looking to receive and wanting from life.
[00:07:23] Manifestation is really quite incredible, Tyrone. I have an energy coach who's one of my investors who absolutely changed my life about two years ago. Right from meeting her, we just started working through some of the energy that I was putting into things. And within a month and a half, the deal that I'm just about to sort of wrap up construction on just popped onto our plate, and it was all smooth and flowed. 
[00:07:52] And I think it was all sort of part and parcel due to that receiving and being open to receiving. Sometimes people think, 'Oh, yeah, I'm open', but they've got all these restrictions in their mind about how they want to receive things. 

Tyrone Shum:
One of the most monumental things she’s taught him is that you have to be open to receive, no matter how it comes to you.

Mike Day:  
[00:08:12] So that was a big, huge critical component to my current success, [it] was really getting inside and understanding who I am, what are my goals, and what's the energy I'm putting out. What frequency am I operating on? And is that allowing everything that I want to receive to come to me?
[00:09:00] Even this morning, I didn't have a lot of time. But my partner just said to me, she's like, 'Come on, just five minutes'. And so we did.
[00:09:10] You wake up and maybe you check your phone right away and you're like, 'Oh, I've gotta address that email. I gotta get back to this person. I gotta get this done'. But then it just allows you to slow your mind down and feel centred before you actually start your day. Even just five minutes. 
[00:09:25] Afterwards, we even looked at each other and said, 'Five minutes wasn't enough, was it?' Like, it's hard to really, truly get your body to get into that meditative almost sort of hypnotic state. 
[00:09:38] Because I did some hypnotherapy as well at one stage in my [life] a few years ago and that's like a full hour session where he really gets you to fully relax and delves into [things]. And things just start coming into your mind as he guides you and asks you questions. And it really helps you to sort of clear out a lot of things so you can tune in to what it is you really want in life, man, it's absolutely amazing. 
[00:10:05] To be honest with you, Tyrone, I didn't think anything of that stuff. If you said to me [things about] reiki and energy healing and meditation, three years ago, I'd be like, 'You're losing it, man. Go have another glass of crazy'. But it works. It is amazing how you can tune into the frequency of what you want.

Coming from Canada

Tyrone Shum:   
Day delves into his early life growing up in Calgary, Alberta, in the foothills of the Rocky Mountains.

Mike Day:   
[00:10:53] So instead of driving around a beautiful place and seeing all these beautiful water views we have in Sydney, sometimes in Calgary, you can crest the hill, if you look west, and it's just mountains as far as the eye can see. It's really quite spectacular. 
[00:11:11] I was recently back in Canada, for a four week ski holiday in January. And man, it really reminded me how much I missed the mountains and how connected I am to the mountain.

Tyrone Shum:   
Although he grew up a flight away from the ocean, the mountains and the sea are both close to his heart.

Mike Day:   
[00:11:46] It's amazing actually, even just here in Sydney, on days if there's been a really high amount of stress, or maybe your day is just not going the way you want, like, just heading down to the beach and just getting your feet stuck in the sand. 
[00:12:03] Or sometimes I like to... going back to the meditation, just go back and just do, like, a two minute sort of thing but maybe lean up against the tree and feel the energy of the earth. I'm an earth sign. So I really ground out on the earth.
[00:12:22] Maybe there's a bunch of your listeners going, 'Who is this guy talking about all this hoity toity energies and grounding and meditation?', but, like, it just really works for me.

Tyrone Shum:    
[00:12:47] And when you think about it, what we're building and developing is also trying to make sure it's also sustainable. So we're looking out for the environment at the same time as developers. So I think that's all part and parcel of what we do.

Mike Day:   
[00:12:59] Absolutely. It's a key criteria for me as well. 
[00:13:01] We try to use as many sort of sustainable materials as possible when we're doing our material selections. It's one of the questions we ask our suppliers.

Tyrone Shum:   
[00:13:11] So tell us a little bit about when you grew up in Canada. What was that like? And how long were you there for?

Mike Day:   
[00:13:17] I was in Canada 'till 2006. I've been in Sydney, Australia now since 2006. So almost... what are we at now? 17 years. But I left Canada when I was 30. I had come out to Australia in 2001, did a year of travelling but never left Sydney. I ended up just loving it here. And I'm still trying to get back to that trip, to go and do a year of travelling around Australia.
[00:13:53] I've had many different lives, Tyrone. I managed large restaurants and had a staff of 80 to 100 people, dealing with all different aspects of dealing with teenagers and young kids who you employ in the hospitality industry. It was more of a glorified babysitting job than anything.

The Journey

Tyrone Shum:
Following his stint in hospitality, he moved into project management and sales within the oil and gas industry.

Mike Day:  
[00:14:26] For the last decade, I worked for a Fortune 500 company in the oil and gas space, managing projects and dealing with huge capital expenditure projects. Lots and lots of materials, tendering, dealing with legal, every aspect of the whole sales process. 
[00:14:48] I have a real background in learning from Fortune 500 lawyers, contract management, contract review. So my past has really sort of helped me to... 
[00:15:00] Managing restaurants is like managing a business because you've got repair and maintenance, you've got staff, you've got so many different aspects to learn about management of that type of business. Then you move over to a huge sales organisation and you've got, like, a $50 million portfolio of projects to manage. And it's a totally different thing. 
[00:15:21] And the management were incredible. They really opened up the P&L to me, the profit and loss statement, and really showed us where the money I was bringing in went and how it was used. 
[00:15:33] And so you get a real sort of flavour, even though I wasn't making those decisions, of exactly what my contribution in these businesses is, and how big, huge corporate business doing $200 million a year or something is done. 
[00:15:49] And then I moved over to be an entrepreneur and look after myself and a director of my own company. So it's incredible how the journey sort of progresses and how life prepares you without even knowing what your sort of ultimate purpose was, and where you're going to find the most joy.

Sports, Eh

Tyrone Shum:   
While Canada and Australia are worlds apart in many ways, growing up in Canada was as focused on one thing as it is for many Australians.

Mike Day:   
[00:16:38] I love, love business and I love numbers, but I would have to say, Tyrone, I definitely wasn't an academic back in school. I was all about sports. 
[00:16:49] I played every sport under the sun. I played ice hockey, I love to ski. But back in primary school, what we call junior high which is like what Americans would call middle school— here we only have two sets, primary and high school, in Canada we had three, its primary school, junior high and high school. 
[00:17:11] From about grade seven onwards I would do every sport under the sun. Whatever the school would offer, I was on the team whether it was the badminton team or the volleyball team or the basketball team or the wrestling team. 
[00:17:24] In high school I refined that quite a bit, I just did what we call football in Canada. I guess we would refer to it here as gridiron. I did play rugby but we didn't call it football there, or footy, it's just called rugby, but it was rugby... not rugby league but union union. And I really liked the union rules a lot better. So but it's been, again, funny that I played three years of rugby and then I ended up living in Australia. 
[00:17:57] But my main passion was always ice hockey. And in Canada, we would never say ice hockey, you just say, 'I play hockey'. Because playing field hockey or grass hockey in which people would probably associate if you said I play hockey, they would assume grass hockey here, right? And they're always surprised here in Australia to learn that there's an ice hockey league and there's rinks everywhere and that we travel around and we play in a really cool league.

Lacing Up the Skates

Tyrone Shum:   
He paints a picture of just how popular ice hockey— or, for Canadians, hockey— is in his hometown.

Mike Day:   
[00:18:46] When I grew up in Calgary, there was only about 700,000 people. And we had 80— that's eight zero— ice rinks in the city. And getting ice time was still difficult because every kid plays hockey. And here, just to give you a flavour, in a city of 5 million people in Sydney, there's only four ice rinks.
[00:19:14] But the competition here is pretty incredible, actually. Like, they have a league cup. Like, there's a couple of different leagues. There's the Australian ice hockey league that travels around Australia, but I didn't play in that. I'm a little bit too old in years to be playing at that level now. 
[00:19:36] I played in what we call a senior league where at the highest level sort of thing. And most of the players on the ice are from Canada, the US, Sweden, Finland, Russia, Czech Republic, France, you know, wherever. It's all European and North American players with probably about a 20% mixture of Aussies. 
[00:20:00] And it's all really good. And we play at just the high finesse level without the full body contact, but it gets pretty rough out there. And I've been known to throw the body around a little bit and be a bit aggressive. I tend to be that way in life in general.

Tyrone Shum:   
As you might expect, keeping a large area of ice frozen in Australia is much harder than on the other side of the world.

Mike Day:   
[00:20:39] The ice is a lot different here as well, because it's so warm, keeping the ice rink cold inside is difficult. And in the summer, the ice is very soft. Whereas in Canada, the ice is solid. It's really, really hard. We would be sharpening our skates every two or three ice times. Whereas here, I can go with one sharpening on my skates for almost the whole year because the ice is so soft.
[00:21:08] I grew up in a community that had a lake. And so everyone who lived in that community had lake access. And we'd sling our hockey stick over our shoulders, put our skates on the stick, walk down to the lake, and we'd be there for hours, probably, at least two or three days a week, just playing what we call shinny. 
[00:21:32] So you have your shins on your legs. And the reason we call it shinny is because you can't raise the puck above your ankles because it'll hurt. So it's just about passing and stick handling. And there's usually no goalies to shoot at, but it's just about moving around the ice. 
[00:21:52] And if you've ever seen ice hockey, it's a very fast paced game. There are systems that we learn, but at any given moment, we just know where we're supposed to be in relation to our position on the ice and what areas of the ice we cover and what our responsibilities are. 
[00:22:08] So it's a very, very fluid game. So it's not like basketball, where you're setting a pic, and this guy has to stand here and here and then you run that play. It's like, the puck can go anywhere. And there's no guarantees of anything. So it's very fluid and dynamic.
[00:22:46] I'm teaching my fiancee to skate and because she's from Colombia, I don't think she'd ever stepped foot on the ice maybe more than a couple of times in her life. So she's always amazed when she comes to the games, and she watches us just skate around, like we're walking, and then still have the ability to handle the puck, get hit by another player and whatever. So it's all encompassing, for sure.

Persistence is Key

Tyrone Shum:   
He had his fair share of falls and mishaps on the ice and sports fields growing up, which he attributes his determination in life to.

Mike Day:   
[00:23:31] I'm a very persistent person. When we set ourselves a goal, whether it be a business or personal or sport or whatever, like, I never give up. It's always straight to the outcome. And even if you're struggling and you're hitting barriers, it's like, stop, pause. What are we doing wrong here? Let's analyse and let's keep driving forward. 
[00:23:56] And even when it comes to property and negotiating deals with vendors, like, sometimes it's just not flowing. And you have to sort of take a pause and go, 'What are we doing here that's creating this not to flow and not to get this deal done?'

Tyrone Shum:   
Day made his way through school with one career goal in mind— and not the one he has today. 

Mike Day:   
[00:24:39] At the end of the day, I really wanted to be a firefighter, actually. And I don't know what happened. I still am trying to get back to myself and why I made the choice I did. I think I got convinced by friends or other people that, '[It's] such a long wait, you're not big enough, maybe you won't pass the test, maybe it'll take six years to get a posting'. 
[00:25:06] And I was really quite anxious to get out in the world and start making money and looking after myself. So I took the decision to not even try. 
[00:25:15] And it's probably one of my life's only regrets, where I just got rid of a dream I'd had since I was a boy. For the sake of money. 
[00:25:27] So when we talk about money now, and we do deals, I really try to centre with myself and say, 'Okay, are you doing this for just the money? Or is there joy? And can you inject love and energy into whatever it is we're going to do?' 
[00:25:44] Because I think I made a decision for money back then, just to get going, to get into the world and become an adult. 
[00:25:52] But I went to University of Calgary, I took a business degree kind of thing. It was horrible, boring. I didn't enjoy school at all, it wasn't really for me. University undergrad degrees are really geared towards trying to sell you something, again, which is a master's or something. And so half your degree is spent just on all these options, and things that are meaningless to you, and you really just want to get to the core subject, learn what you need to learn, so you can get out and start doing business.

Tyrone Shum:
As soon as he was finished, he went straight out with the intention of getting into business.

Mike Day:  
[00:26:37] So I started learning the restaurant industry, because one of my other dreams was to be a bar owner, but I never really pursued that. 
[00:26:45] Because at the end of the day, when you see the type of staff you have to employ, throwing out cutlery, breaking your dishes, the building [needing] constant repair, and with the flue systems in the kitchen, and all the equipment that you need, a lot of your money just gets sucked out by people who don't care about your business. And you're really powerless to that, because you can't function that business without those people.
[00:27:17] Whereas [with] property development, you can choose the people you want to work with that align to your vision, that align to your goals, that care about the outcomes, and you can nurture that. So it took a little bit of time, but we got there in the end.

Tyrone Shum:   
[00:27:35] And I guess maybe a big question for you, would you try even going back to seeing becoming a firefighter, now that you potentially could? Or do you think that's a long con dream?

Mike Day:   
[00:27:47] It's something my fiance asked me the other day, actually. And I mean, I'm certainly in shape to possibly go back and do it. But it's the same story here in Sydney. How long is it going to be till you actually get a posting? Would you come through as a floater? 
[00:28:06] And then the other question, really, for me is like, can I be on shift 24 hours straight and actually function? Because I need my sleep, man.
[00:28:17] I said to her, and she laughed as well. She's like, 'Yeah, I don't know how well you'd go with that, getting up in the middle of the night and actually like having to think about being safe running into a building'. But I think adrenaline would kick in and you'd probably get used to it and be fine. 
[00:28:35] But more recently, I thought to myself, I'd probably be more geared towards... what do they call them? On the ski hill, the guys wearing the red jackets, the ski patrol. So it's still first aid, you're still rescuing people, but you get to do it with a pair of skis on underfoot. And you get to go up and down the mountain looking for people needing help or directing people or making sure people are safe. 
[00:29:03] So I kind of thought maybe that would be something a little bit more that I could do a little later in life after property, and I've checked all the goals and achieved everything I want to here.

No No Reno

Tyrone Shum:   
It’s certainly a big change coming from Canada to Sydney, but he was motivated by all the right reasons.

Mike Day:   
[00:29:48] When I was here in '01, I met a woman [and] by the end of the year we were engaged. We got married and then she wanted to move to Canada. 
[00:29:59] So we went back to Canada and that's where my property development journey started. I did a couple of custom houses, architectural homes. And then my last project was a renovation, and I'll never do that again. 
[00:30:22] That's kind of how I got started in property. And you can see how quickly you can grow your wealth like this. So in Canada at that point in '01 you could buy a house for, say, $200,000. Put $40,000 in renovation into it and sell it for $375,000 three months later. 
[00:30:43] So that's what I did in my last project, which was a really great result, but was an absolute nightmare, and I'll never do it again. So as far as an investment strategy goes. Just me personally. 
[00:30:58] There are people who just love renovations and they could do them over and over and over again, and I take my hat off to them. But I like new things. I like to knock down and rebuild. As soon as you get stuck into something and it's like, 'Oh, we need a new pipe here. You need to replace the plumbing'. And the cost just go like this. And there's too many unknowns for me.

Tyrone Shum:   
The first renovation project he did was an infill lot that he bought from a developer who had already installed all the civils.

Mike Day:   
[00:00:19] [I] worked with an architect for a nice design project, managed the thing by myself, and then came up with a result and put it on the market. 
[00:00:30] And I ended up building it for about $260,000 and we sold it for $380,000. So it took about six months to build. And it was like, 'Okay, good to go'. And then that was kind of the aha moment. It's like, 'Wow, I can really do something special here if I deliver the right product, and I can make a whole year's salary in, say, six or eight months', depending on the build time, of course. 
[00:01:00] Some of the projects we do are like, two [to] two and a half years because of the DA process here. But when you're doing something simple, like I did in Calgary with an infill lot, building a single home, you don't need a DA. It's what we call CDC here. It just takes a few weeks to get your approval, submit your designs, and off you go, it's all compliant, and you just build it.

Tyrone Shum: 
Looking at the profit he made, he wishes he could replicate it over and over again.

Mike Day:   
[00:01:31] I started with a very little amount, like, I think $40,000 of my own capital to buy the property, get everything sorted, get the loan in place, get the construction, and we just did it all. And then, you sell it, you're like, holy cow. And so then I did that again. 
[00:01:47] And then I finished with the reno and I'm like, 'I'm gonna go back to the building something new thing'. And that was really sort of where my passion came in. 

Tyrone Shum:
Then, when he came to Australia, he changed his investment focus.

Mike Day:
[00:02:07] I was sort of transitioning over to a Fortune 500 company in the project management space, and I was having a lot of fun climbing the corporate ladder. So I switched my investment focus to investment properties. So [the] buying and holding sort of strategy, but still building new. Finding the lgrowth corridors in certain cities and capital cities in Australia, building something there that will then appreciate. 
[00:02:37] I recently just sold my first investment property and had a really amazing profit based on the boom following COVID there. So I cashed out right at the right time, last May, right before the interest rates started going up, and everyone was still wild and hot and crazy. So I had a really amazing result with the sales cycle we went through to get the end profit.
[00:03:07] And that actually propelled me into getting out on my own and leading my own  company kind of thing.
[00:03:18] I was doing that before, but I was still kind of taking on a bit of a day job role just for cash flow. 
[00:03:25] But for the last two years, or year and a half, I've been out on my own and it's been the best decision I ever made. I love being in charge of my day. I love being in charge of everything really. And not having anyone looking down on me going, 'What are you doing?' with expectations. 
[00:03:47] And being able to work with a team of investors that I have is incredible, because you have this team of people who support you with their capital, but it allows all of us to achieve our property dreams simultaneously.

Cookie Cutter

Tyrone Shum:   
After Day made his way to Sydney to live, he purchased an investment property. To do this, he leveraged off his existing knowledge of buying an infill lot where a land subdivision developer had started the civils.

Mike Day:   
[00:04:23] I flew up to Brisbane, the developer took me all around, gave me a selection of different lots, and then I picked one. 
[00:04:33] And then we just sort of went ahead, he showed me some off the plan designs he had, so I didn't really go through an architectural design or anything. It was just off the plan cookie cutter type house that there was probably 100 of them in that suburb kind of thing. 
[00:04:47] But we tried to put a little bit of flair on it with different materials outsider or facade looks, but that worked out really well. And it was a very easy, seamless process. 
[00:05:02] The company I did it through offered a project management service because I was so far away. So it was like a $10,000 fee that was fully tax deductible against my salary. So that gave me a bit of benefit. 
[00:05:14] And I had someone up there managing the builder, and all I get is an email saying, 'Okay, we hit this milestone, I've double checked this, here's our checklist, release the next set of payments' kind of thing. And it's like, 'Wow, this is really easy'. 
[00:05:29] And that's kind of what I do for my investors. It's just like, I do all the work. And they just sit back. 
[00:05:36] And some of the things I also have committed to a few of my investors is to teach them the development side of the business. So what are the things I'm doing every day. So there's a few of them that I call quite regularly and update them on things that we've learnt, things that we have to do, compliance issues, engineering issues, legal issues, whatever. And they're really thankful to be able to come on that journey with me and learn the process.


Tyrone Shum:   
The renovation that he did in Canada was what he would describe as his worst investing moment. While the profit wasn’t the problem, the process wasn’t for him. However, this didn’t dampen his dreams.

Mike Day:   
[00:06:50] Then later on in life, about four years ago, I thought, 'I'd really like to just have some steady cash flow'. And so I educated myself and learnt trading on the stock market. And I just focused on the indexes, like the Dow Jones and the S&P 500 and those sort[s] of things. You just played the volatility, buy, sell, buy, sell. 
[00:07:14] And I tried day trading, sort of more futures markets and things like that. And whilst it was profitable in the end on a net result, [it was] very emotionally draining and highs and lows. There's days where you lose thousands of dollars and days where you make thousands of dollars. And then sometimes it takes weeks to make the thousands of dollars. 
[00:07:39] So I just found it a very inconsistent money making model because at the end of the month, if you're depending on, say, a specific amount that you need to live off of, it can be quite volatile. And you need to leave some contingency there to live off of or you could find yourself hitting a bad slide or a turn in the market and not being able to get out quick enough could be a bad result. 
[00:08:07] So, the renovation and that, I'm going to get back into trading, but I'm just going to focus through a broker on someone who looks to know more what they're doing kind of thing and just focus on the futures market. And look at some sort of more long term blue chip type stuff. Trying to play volatility can be quite volatile, literally.

Tyrone Shum:   
He found that it was a great education to understand how the markets work, delving into what makes company stocks fluctuate.

Mike Day:   
[00:08:50] When you look at the S&P 500 or the Dow Jones, it's basically a plethora of America's best companies all sort of contributing to whether that index fluctuates. 
[00:09:01] And it was [a] pretty interesting education to look at all the little things you can put on tools inside the platform that you use to give you indicators of when you should get in [and] when you should get out. And you know, learning how to read these charts, that is basically another language. And what they're trying to tell you to do, and whether you see it or not is a totally different question.

Assume Nothing

Tyrone Shum:   
[00:09:34] I think everyone has different perspectives, every trader. That's the reason why I guess it's an emotional game as well, it's not as clear as black and white.

Mike Day:   
[00:09:41] If I had to pick one, I would say it was probably the renovation. Because I still think I have nightmares to this day of going into start a job. Because I did it all myself. And I had a general contractor helping me with some of the more complex things, but it's like... you rip out a vanity, right? And it's like, 'Okay, I bought a new vanity, but I need to replace all this plumbing under here' and it's like, 'Okay, get a plumber', and that's delayed. 
[00:10:08] And if I did it again, it would just be using a general contractor who can come and scope the job. But still, I just don't like the uncertainty. Again, same as the trading, it's the uncertainty of a renovation, where you go in, you rip something out, and it's like, 'Well, we didn't intend to have to put up a new wall' or, or take a wall down or replace plumbing or replace the kitchen. Maybe we were just gonna paint something. And then it's like, 'Well, I didn't budget for that'. 
[00:10:34] And the best advice I can give to any investor who wants to go into a renovation is: Whatever you think your budget is going to be, just double it. And if the feasibility still stacks up, or the numbers, whatever you're doing, but don't go into it just assuming you're gonna make a profit. Do your research on the end product that you're trying to achieve and what you believe sales are going to be and make sure there's enough revenue there. 
[00:10:58] But at the end of the day, it's all about your reno budget. Because I had educated myself, and I knew a lot of things and spent a lot of time before I endeavored into that, obviously building a few homes. 
[00:11:11] But when you do it new, it's brand new. It just gets built. You don't have to go in and fix things other than defects and things like that. So it was probably something I'll never go back to because I really prefer the knockdown rebuild model.

Tyrone Shum:   
Despite its challenges, they did well with that renovation in terms of the end result.

Mike Day:   
[00:11:39] I think the numbers, just from memory, were something like… I bought [it] for, like, $220,000. And we put $30,000 or $40,000 in renos, and I sold for $370,000. So it was a really good return. At the end of the day, there was a six figure number associated with the profit of the project. 
[00:12:03] But for those four months, if I could take it back, my emotional state and the highs and the lows and the ripping your hair out because you thought you could do a job that you couldn't...
[00:12:16] And the other thing about renovations is allowing enough time in your loans and things like that. Because if you need to have it done in three months, but then you need four or five to complete because some major thing needed fixing, well, then you're screwed. And that can really chew into your profit, the finance costs.
[00:13:02] Some people are really good at it. They're really calm and cool and are just like, 'Yeah, no problem. We know that was coming'. I think that calmness comes in knowledge and your numbers. Because if you allow double, and the expenses keep piling up, but you're not at the ceiling of that budget yet. 

Attention, Renovators

Tyrone Shum:
With that, he has a piece of advice every renovator needs to hear.

Mike Day:  
[00:13:26] Make sure that you leave some budget left for the very end push. Because at the very end, even in developments, in brand new, the very end, it's like, that's where the variations start coming in. 
[00:13:38] It's like, 'Oh, well, I thought this was gonna look different. Can we change it to this?' Or, 'I want this now. Can we change it to that?' So you need to leave some contingency or some budget to make sure that even in brand new because things don't always turn out the way you want them to. So that's why we put contingency into development finance and into development budgeting on brand new. But you also have to do the same in any renovation project as well.

Tyrone Shum:   
When it came to deciding to start his own business, he reflected on his first few developments and the joy they brought him.

Mike Day:   
[00:15:09] The creation and design stage of a development is probably some of the most fun for me. Like, I'd say, it's second, because designing something with an architect, and then...
[00:15:21] But the funnest part is when you start seeing it constructed and bringing it to life. Obviously, the architect, I have to give them 90% responsibility for the vision of something, but I tell them kind of what I want and some of the features we want to see, something we believe is saleable. 
[00:15:39] And you put your little touches on things, like, change that wall, move that here, make this like that, or whatever the example is. Just little luxuries like lighting or putting a niche here or there or cutting out a window or moving the wall interiorly, looking at different materials for the outside facade to really give it that flavour. 

Tyrone Shum:
One of the must-haves for every development he does is a rarity in Australia, but is much-appreciated during certain times of the year.

Mike Day:  
[00:16:07] A fireplace is a must for me in every home, because that's what we have in Canada. So it's just my little touch up. And people wouldn't associate a fireplace with Canada, but at the end of the day, it's a source of warmth for me. And even in Sydney, winters get bloody cold, because the houses aren't centrally heated the way they are in Canada.
[00:16:29] So it's those little touches that I really love about the development process and why I chose that path, because I'm more in charge. Whereas [with] things like renovations, like we've been talking a lot about, you're really restricted unless you have a really big renovation budget to make a lot of dramatic changes.

Tyrone Shum:   
He’s noticed that the two processes are very different, and that his own processes have become more refined with each development.

Mike Day:   
[00:17:22] And I always add to them. So making little changes, going, 'Okay, well, we had a variation here to some design work to get things to pass code. Well, next time we're going to do all those checks before we even submit the DA and then we will reduce the risk of any future variation' kind of thing. 
[00:17:45] So it's always refining, always learning, always continuous improvement. I think that sort of comes from that corporate background that I come from. It's always looking at post analysis of any situation, and then reflecting and refining.

Day’s Development

Tyrone Shum:   
Day’s current development is in a sundrenched location in Sydney’s south, and was named for the blue waters it overlooks.

Mike Day:   
[00:18:24] It's called Azure Burraneer. It's located at 14 Bulls Road in Burraneer down in the Sutherland Shire of Sydney. 
[00:18:34] It's a waterfront property facing northeast, so we get a massive sun aspect. Sunrise in the mornings are absolutely stunning. And that's really my focus: Water adjacent, waterfront, or water view type high end luxury product. 
[00:18:53] And there's a very, very specific reason for that. And it comes down to risk analysis within the investment process. 
[00:19:02] So one of the things my research has identified is that in the high end properties [that cost] $8 million [to] $10 plus million, there's a real undersupply of stock in Sydney. There's a lot of very, very wealthy people in Sydney, who own older homes that are large, their kids have moved out.
[00:19:21] There's a plethora of downsizers in the lower north shore, the eastern suburbs and down here in the Sutherland Shire, around the beaches areas, and I'm sure in the northern beaches as well. And there's just not enough available brand new type residences for people to downsize into, say sell their $15 million home and buy a $9 million home. Something that's really modern and luxurious, with full automation using your smartphones. 

Tyrone Shum:
His current focus is putting a lift into each residence, for the ultimate in luxury and convenience.

Mike Day:  
[00:19:59] So when you drive down into your garage, you can take an elevator— or what we call I guess in Australia, we call them lifts, we call them elevators in Canada— and you get to come out into your home from a lift. That's your front door, basically. 
[00:20:14] And I really liked that high end nature, because we can focus on really high quality materials, looking at sustainability. Because sometimes when you want to build an eco, or a sustainable type product, it's not always very cheap. And the high end sort of allows you to go with your values, and say, 'Well, I want to build something that I feel I'm adding value to the community with'. 
[00:20:46] And the high end allows me to make those selections because people want to live in a home that looks after them, and contributes to their quality of life. 
[00:20:59] So using things like stainless steel pipes instead of PVC. Because sometimes in the hot summer, when you've got water sitting in a PVC pipe, there's certain substances and things that are released through the plastics. Bottled water, you know, don't keep your bottle of water in the hot car, right? Kind of like that. 
[00:21:26] So it just aids towards bettering the owner's experience in not only contributing to their joy of 'Look what I live in', but the environment and the materials that are around them contributing to their humanity and their well being as well.


Tyrone Shum:   
The environments that he creates come in the form of houses, townhouses, and apartments.

Mike Day:   
[00:21:56] So as I started with just those custom houses, and I was looking at a deal in Mosman, recently, where we were going to knock down an existing house and build a nice 400 square metre sort of home kind of thing, really big and bold, and, you know, selling it for, like, $25 million kind of thing. 
[00:22:14] But then there's other ones where there's... I like small boutique, I don't like to go too big in that arena. So, four to 10 townhouses kind of thing, we'll look at sites like that. 
[00:22:30] My current development is, I guess, what you would call a dual occupancy. But effectively what I've done is it's a top and bottom apartment style. With a shared garage. And so it's basically an apartment building with only two units on two floors. Still meeting the eight and a half metre height limit of the zoning controls.
[00:22:52] But when you look at it from the front, so if you guys visit the marketing website called, you'll be able to see the front facade. It looks like a house, Tyrone. It just looks like a 350 square metre house with two floors. But when the garage opens up, it opens up to a 220 square metre garage with two double car garages and plant area and storage room. 
[00:23:18] And then they have personal lifts going up to each residence, and a state of the art security system. Because it's a class two building.

Tyrone Shum:
A class two building is defined as a building where residents live over top of one another or have a shared garage, or both. 

Mike Day:  
[00:23:38] The legislation changed in July 2021 about class two buildings. I'm sure we've all heard on the radio and other podcasts about cladding nightmares and builders using wrong materials in class two buildings and not doing the right structural things in that one apartment that had to basically be evacuated. I remember some time ago. So the class two legislation has tightened up a lot. 
[00:24:02] One of the business focuses I'm going to be taking is to specialise in that class two space. So that will mean taking on some larger projects, building unit buildings, because whether you build something two floors or 10, it's the same process. It's the same regulations, it's the same code. The builder might be a little bit different. But it's generally the same thing.

Tyrone Shum:
The projects he has coming up are still in the feasibility stage, but he’s keen to share what he’s able to.
Mike Day:
[00:24:42] So the process there is it's going to be a high end sort of waterfront type property with about 30 different units. And we're having an architect conceptualise everything in sketches and going to the council and asking for a pre DA meeting to approve our design kind of thing before we even start spending money. 
[00:25:06] So it's another one of those risk analysis things in the development process to say: How can we limit our expenditure before we really know if we can do this? Because this one also is a bit more complicated and will require a planning proposal where we're going to be altering height limits and floorspace ratios and things like that to increase the yield. 
[00:25:25] But council has been telling us or we're getting messages from them saying that they want this kind of development in this area. 
[00:25:33] I don't mind those little challenges. It's a lot of fun. But again, the high end space is where I like to play, because it's just underpinned by buoyancy and support from a lack of inventory for wealthy people to buy those high end type homes.

Planning on Profits

Tyrone Shum:   
With the shortage of building supplies that COVID-19 brought, building costs have skyrocketed. In order to make a profit, Day has a solid plan.

Mike Day:   
[00:26:14] What we do in the build process to try to reduce costs is... like, because the concrete, the structural steel, and the timber and everything that is used in typical developments can really fluctuate month to month. And when you sign a build contract, some builders now are asking for cost plus, some of them are asking for the ability to vary any time a cost varies. And that gives you a lot of uncertainty. 
[00:26:43] One of the strategies I deploy is to lock down the concrete, the structural steel and probably 60% to 70% of the expenditure at the time we sign the contract. So I won't sign the contract with the builder until he's got a commitment from his concrete, given them all of the volume that he's going to order and by when kind of thing, so we can lock away those prices. 
[00:27:09] And then other things you can do to save money, Tyrone, as a developer, is you can take on the role of, say, what an architect sometimes would do or the builder does in house, and you can take on all the material selection for yourself.

Tyrone Shum:
As a tendering specialist who comes from a project development background, Day took on all of the material selections.

Mike Day:  
[00:27:37] So I went and did the hardwood, the tiles, the joinery, all the kitchen cupboards and the stone benchtops. And the door handles, the doors, everything. All your fittings, your fixtures, so pretty much everything your eye can see other than the Gyprock on the wall that the builder sources. And that's another component I asked them to lock down as well, because that's a major sort of component there is. 
[00:28:07] And then what I negotiate with my builder is that all of those costs, that could be, say, let's say it's a $3 million build, let's say $1 million of that cost is items that I'm in charge with, I negotiate with the builder to pass for him to pay the bills on that, but put no margin on that. 
[00:28:29] So because he's not doing any of the work, all he has to do is place the order, receive the materials, and then he allows for some labour to install it, which I pay for in the main 60% [to] 70% bulk of the fixed price contract we do. 
[00:28:45] But in that other 30%, there's no margin on that million dollars. So I've been able to negotiate in the past. I'm not sure how I'm going to go in the future with that strategy. But it has worked for me in the past to reduce build cost and margin by taking on a lot of work. 
[00:29:04] Now, please understand that if you're going to deploy that strategy, you really need to understand how to manage spreadsheets, how to do tendering, how to negotiate with suppliers' rates, and manage those relationships, pitting people against each other to try to get the best price. 
[00:29:24] And it can be quite a laborious job. It took me about five months to tender, and you have to start that quite early on in the process. As soon as you achieve construction certification. Because your builder has certain timelines that he'll need to meet. He's probably got to front 50% of the bill to get the concrete slab and all the building management stuff up and running. And then in the latter 50%, that's where all the materials you're selecting and sourcing start needing to be installed. 
[00:29:58] So you're under the pump as well to meet timelines, to make sure that you have materials ordered, ready, in stock and ready to go for the builder to install.

Tyrone Shum:   
The time and effort he puts in is always worth it, which is illustrated by his profit margin.

Mike Day:   
[00:30:38] And from an investor's standpoint, it's really good because they can see how much of the labour I'm taking on to increase profitability for them. So the profit goes up, their returns go up. And it's a win/win for everyone. 
[00:30:55] Now, obviously, it takes a lot more time and focus. But even things like in the marketing side of things, by taking on certain roles, on my end, I can reduce the impact from our marketing campaign and cost. So maybe you do a few posts of your own instead of paying a marketing company. And you can potentially save yourself $500 to $1,000 a month in ongoing management fees of your marketing campaign. And there's all kinds of little ways that you can sort of trim and save in the budget there.

Tyrone Shum:   
Ultimately, to have a successful project you need to delve in with no holds barred. As a result of rising costs, Day found he needed to pivot.

Mike Day:  
[00:31:57] Finance is probably one of your key drivers in costs in any development. So I prefer the solution of private finance, even though the fees are a little bit higher, because we don't need the serviceability and income testing. So the investors can just put in capital, and we can move very quickly without pre-sales.
[00:32:17] But I'm finding with the increase to build costs, one of the ways that we can save money is by pivoting in the finance solution. And going with a lower cost finance solution and potentially bringing on, say, a serviceability partner. And, for example, someone might come in and say, pay $250,000 in serviceability fees, and the next investor might have $500,000 cash in the deal, but we give them the same equity share, because the serviceability partner is reducing our costs to make the development profitable. So his role is just as critical as someone who put in double the amount of money. 
[00:32:59] So their return on cash invested is actually a bit higher being a serviceability partner, because they're putting in less cash, but they also have to have the income to support these large loans of, like, $8 million [to] $10 million.
[00:33:15] But that's just another strategy you can deploy to reduce costs kind of thing. And we have to look at every aspect. As a business owner, you look at your main cost items in your business model, and then you have to do a deep dive on those. 
[00:33:31] We found some pretty cool hybrid solutions in finance, as you would know, a mixture of privates and a mixture of standard finance. If you don't have someone who can service $10 million, but you've got someone who could service $5 million, we might do a mixture of standard and private.
[00:33:31] That's something I think that a lot of rookie developers don't really understand. And I'm sure there's a lot of people in this space listening, that are trying to get into development, have gone out and done some of these courses by some of these educators, and they're all quite good. They all have something to offer. 
[00:34:15] But at the end of the day, the best education you'll ever get is going in and doing something and going through the whole process, and then refining it after and then doing it again.

Past, Present, and Future

Tyrone Shum:   
[00:34:46] If you met yourself, say, 10 years ago, what do you think you would have said to him?

Mike Day:   
[00:34:51] [I] probably would have slapped him silly to be honest with you. [I was] just a really rigid and ignorant person, just someone who thought, 'This is the way', and I wasn't as open to receiving the gifts of life as I was. And I was very just like... tunnel vision sometimes in my focus. 
[00:35:21] So not a bad thing, but it's just like... I look back and I think, 'Okay, if I had not spent my 20s partying it away, and I could have taken all the money I made and bought a property $100,000 back then, like, as in my early 20s, maybe $150,000'. And those properties are worth $500,000 [to] $600,000 today. 
[00:35:43] Now, hindsight is always 20/20, Tyrone, we always wish we had done things differently. But I would say 20 years ago, I would have slapped him silly, because I would have said, 'Do this, get into life a little bit sooner'. But I had a lot of fun in my 20s. I can't say I regret it. 
[00:36:04] But if I was talking to that person, I would encourage them to look at investing a lot sooner.
[00:36:17] One of the life changing pivotal moments for me was when I read Robert Kiyosaki's Rich Dad, Poor Dad. And I think it's, like, the first sentence or the first page or something in his book, where he's like, 'Security is defined by the number of months that you can survive without a paycheck'. 
[00:36:37] And at the time, I was like, 'Really? I've got maybe two months.' And I always thought a job was security. But it's really not. So you need to have an investment strategy, starting to be deployed. 

Tyrone Shum:
His advice to parents is to encourage their children to get into investing as soon as their early 20s.

Mike Day:  
[00:37:02] Just with something, anything, just to give them a little taste of what it means to have your money working to deploy that mindset for them. 
[00:37:11] Because my dad was an investor his whole life, he played the stock market and loved it. And now he's retired. I think he retired at 55 or 60. And they just live off dividends. 
[00:37:23] But I never really engaged with the whole stock market thing, property was always my thing. But I was very resistant to the whole investment journey until 2006, when I bought my first investment property. 
[00:37:41] So for me to answer your question, I would say, I just encouraged that guy to get into investing a lot sooner. And there's so many different ways that you could do it.

Tyrone Shum:   
[00:37:57] Well, Mike, you've achieved a lot in such a short period of time. And I think you've gone a long way, as you said, there's been so many things that you have accomplished through the property development. How much of your success has been due to your intelligence, skill and hard work? And how much do you think has been probably through luck?

Mike Day:   
[00:38:17] I'd have to say probably 98% is all just hard work, knowledge, [and] understanding. And some of the most probably critical success is just research and not jumping in emotionally too fast. 
[00:38:37] And when I mean research, it's like, research that growth corridor, or research the market cycles. What happened during the last few? What can you anticipate? When should you buy? When should you sell? And that was really what gave me some early success was just the cycle.
[00:38:55] I added a lot of value doing some things here and there, developments and renovations, but it was really just buying at the right time of the cycle. And as Robert Kiyosaki says, you make money when you buy, not when you sell. And that's where I made my money. It's 100,000% true, because you make money when you buy. 
[00:39:13] And if you buy at the wrong time, then you still might make money. But you could have made a lot more if you had done a little bit more research about the market cycle.

Tyrone Shum:   
Turning to the future, he has a couple of things in the pipeline. One is an upcoming series revolving around class two buildings that will include dos and don’ts and cautionary tales for investors and budding developers.

Mike Day:  
[00:40:59] Also, we've got quite a big pipeline of projects in the works at the moment in sort of [the] feasibility stage, as I explained earlier, that will ultimately come to fruition I believe. So watch this space, click follow or like and if you're interested in becoming an investor, definitely reach out, I can explain the whole process to you, happy to, if the timing is right, we can go visit some developments and things together, show you what we're trying to achieve. But the process is pretty simple. But I'm happy to walk you through it. 
[00:41:45] Obviously, growing investor capital helps me to continue to help people grow their wealth dreams as well, using the knowledge and experience of my 20 year journey in managing businesses, managing large portfolios in Fortune 500 companies, and project management in high end luxury developments. 
[00:42:07] So I think I've got a pretty good working knowledge. And like I said, I'm also willing to help the investors learn the process along the way so that they can become a more sophisticated investor. Because at the end of the day, let's say you just wanted to be a money partner always. But one of the main contributions to some of my investors is there's a gentleman who has done four different developments as a money partner, and he brings a lot of really good ideas and says, 'Well, in this one, this happened, and look out for that'. And then you go start asking some questions you may or may not have asked without that teamwork and that support. 

[00:42:49] So you don't always need to learn for the sake of doing. You can learn for the sake of being more sophisticated in your knowledge as an investor and participating and contributing to the team environment that you would be part of in an investor group doing developments.


Tyrone Shum: 
Thank you to Mike Day, our guest on this episode of Property Investory.