With two decades of high-level Australian property and construction industry experience, Remon Fayad is the co-founder of property development cooperative Ellerson Property. Launched in 2020 by Remon and his brother Fayad, Ellerson Property aims to deliver the next generation of apartment living in Australia.
Fayad was introduced to the industry at a young age with construction running through his blood. We follow his journey from when he was working on a construction site as a teenager, to the seemingly glitz and glamour world of professional sports agency, to going back to his roots and now building large scale developments with 4000, 5000, and even 15,000 units. Join us in this episode as we learn the ins and outs of property development
from one of its experts.
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7:03 So eight weeks in, I went up to my mum first, being a bit of a mummy's boy. So I went to mum and said, 'I don't actually like construction, what am I going to do? How do I tell dad?'
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 Remon Fayad, co-founder of property development agency Ellerson Property. Remon was introduced to the industry at a young age and we learn how he went from a construction site, to being a professional sports agent, to now building large scale developments from 4000 to even 15,000 units!
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Remon and his brother have grown up around construction and property development. With construction in their blood, it’s now time for their generation to take the reins and lead the business in a new direction.
0:37 My family have been in property their whole lives, through construction. My grandfather, his grandfather, going all the way back to... we're third generation now, but even his father, his grandfather, they were builders back in our homeland of Lebanon.
0:58 So in the 1800s they were building schools and roads and all that, so it's been in our blood, it's been instilled in us. And yeah, it literally is in our blood, and we've grown into it from a very early age. Now today me and my brother have created another company, set up another arm, just more of a development arm. And we're looking for new fresher ways to do things differently.
THE BROTHERS OWE THEIR POSITION TO PREVIOUS GENERATIONS.
1:22 We wouldn't be in this position without our family, without our history, but it's got to a stage where we want to try to do things differently. New 21st century kind of thing, you know, young, new, fresher approach, still using what we have learned in the past and through our family.
With the company on his shoulders, he keeps himself physically and mentally strong.
1:53 So I'd be up at 5am, go to the gym first thing in the morning, that just sets you off on that right path where you're achieving something, you're doing something keeps the mind fresh, body feeling good. So with a personal trainer every morning at 6:30am, straight after that into the office at about 7:30 [or] 8 o'clock, pick up the coffee, go through the news, I always like to start the day reading what's going on in the world in the news.
2:19 Whether it's property, sport, everything. I'm big on sports, so sports is my break from work, you could say. And then I get stuck into the day, which is meeting with the heads of each department going over their reports, seeing where everything is. So it's not like I get in and check emails at a certain time.
FAYAD PROMOTES A FREEDOM CULTURE IN THE WORKPLACE.
2:44 It's more, we're creating a company where everyone's free to talk to each other, walk around, it's not, 'You do this, sit at your desk', it's, 'Get up, walk around, go for a coffee to have a meeting'. So there's not a real set structure. Everyone's doing their work. But it's more about just getting everyone involved a bit more.
3:08 My stronger point, which I have learned in the past, is in planning and acquisition. So I gravitate towards dealing a lot more with the real estate agents, dealing a lot with state government and local councils to get our approvals through. So that would take up most of my time still, because it's just naturally the way it is. We've got the planning team, but at the end of the day that's what I come back to.
3:32 And then yeah, my brother Fayad, who's also the other co-founder, grew up more on the construction side of it. So it was a good balance. So yeah, we've actually balanced that well, which has helped us to get to this point and start this company.
At what point did the brothers establish their positions?
3:57 I think our father at a young age saw our kind of strong points. So straight from school, my brother went out on site, I went out on site, didn't like it as much. So my dad saw that and kind of put me in the office business management side of it. So it was good.
4:11 And yeah, it's worked out beautifully now. So we both have our strong points. We both still crossover, like I'll crossover into construction, he'll crossover in acquisition, but you just have your strong points and we go to each other for advice and updates on where everything's at.
Remon grew up and went to school in Constitution Hill, where he is still based now.
5:25 I've literally—in the 32 years of my life—I've been, not in a bubble, but everything has been in Western Sydney. Like I was born in Westmead Hospital. I grew up in Constitution Hill, and I went to school at Marist Brothers Parramatta, just across the road from Westmead Hospital.
HIS FAMILY BEFORE HIM BELIEVED WESTERN SYDNEY TO BE A FRUITFUL AREA FOR BUSINESS.
5:38 Yeah, and just knowing the area is what obviously kept us there. Going back to my grandfather and uncles in the business, they were always in Western Sydney, they believed in Western Sydney, they knew the area. And yeah, growing up is when it was instilled in us. So we stick to what we know, as well. So it's not that we don't go out to other areas.
6:00 But we know what we can develop for, we know what we can build for, we know the sites. So we just stuck to our stronger point which was Western Sydney where we knew what we were doing.
6:13 So growing up in Western Sydney, you went to school there? Did you actually also finish high school around the area and then go on to further education?
6:20 Yes. So I went to Marist Brothers Parramatta from year 7 all the way to year 12. Then after school, it's interesting, to give you a bit more of a background, I went on site, a construction site, as soon as I finished school, expecting it just to go through the flow, because that's what my brother did as well.
FAYAD ASSUMED EVERYTHING WOULD WORK OUT FOR HIM IN THE CONSTRUCTION SIDE OF THINGS.
6:37 So I was expecting, you know, to go on site, go through the ranks, go through the steps. But it was probably about six to eight weeks into construction. I didn't actually like the construction side of it. I was always into sport when I was younger, that was soccer, footie, tennis, I played everything. So eight weeks in, I went up to my mum first, being a bit of a mummy's boy.
7:07 So I went to mum and said, 'I don't actually like construction, what am I going to do? How do I tell dad?' And she's like, 'Just tell him openly. We're not going to force you to do what you don't want to do. We want you to be happy in life, we want you to be successful. But at the same time, you need to be happy, which is the most important thing'. So I actually stepped away from construction and property and went on to do sports management.
7:32 So I was managing football players, soccer players, basketball players. I had my accreditation with the NRL. So I did that for about a year. But I mean, stepping away from that then allowed me to realise what I did have in the construction industry in the property industry.
7:45 So, I mean, I took some stuff away from it, it was good. It was a good learning experience. But again, without the support of my parents here, I wouldn't be in that position now where they let me step away and see what I had.
What was it about the sports industry that led him back to construction?
(8:43) I thought it would be all the glitz and glamour of sports and celebrities and getting involved in the team. But I just didn't have that, didn't have the passion that I felt. Like I gave it time, I had a lot of work experience with other agents, but I just didn't have that. It was good at the start when you're learning something new.
THE GRASS ISN'T ALWAYS GREENER.
8:58 But then probably about six months in I just thought, 'You know what this is not, it's not what I thought it would be.' And not because I wanted to get straight to the top and be the number one agent, I just saw the nitty gritty of it, the behind the scenes. It just wasn't a passion, like I didn't have the passion that I thought I would have had. And again, that then obviously allowed me to take a step back and say, 'Okay, I had it good.'
9:20 And I've been blessed with what my family has helped me set up, and what they've set up for me, so it was like, 'Okay, look, let me just have another shot at it'. And that's when my dad pulled me in and said, 'Okay, you don't like construction, it's fine. Let's look at the business side of it'. And that's when he started getting me involved with dealing with real estate agents and dealing with planning.
9:37 And I saw the potential there and just went from there. But I mean, it's good. I mean, what I learned in sport management allowed me to bring some of those key attributes to the property industry, which is all the teamwork and working together. So it was good. I mean, I didn't like it, it wasn't a future, but to say I didn't learn anything from it wouldn't be right. I did learn a lot from there. And yeah, it allowed me to appreciate what I do have.
Growing up in high school would you spend time learning the ropes from your parents?
10:22 Yeah, on holidays. Like term holidays, two week holiday breaks, so my dad would wake me up at 6am. Or wake up my brother at 6am. Yeah, there were no holidays. But I wanted to do it. It wasn't about waking me up and dragging me out of bed. It was what I wanted to do, what I wanted to learn. I mean, yeah, growing up early on.
10:43 From when I was six or seven or eight, when I could start understanding things a bit better, we'd have a family barbecue with all our cousins and relatives. And the talk was construction, the talk was property. So without realising it, you were learning, you're picking up on things as well. So yeah, just gradually built it up. A lot of people in my year at school, a lot of their families are involved in property.
11:03 So it was there without physically really focusing on it. Like you just heard it in the background. So you learn and learn. But yeah, from a young age I've been involved in it. And yeah, I knew there was always going to be some kind of future there.
Remon shares his parents’ career and business story.
11:40 Property has been their number one investment vehicle, you could say. But over the years, with my father kind of gradually getting into different kinds of businesses, he realised that property is now for me and my brother. So he's kind of now started to do a bit more for medical, for finance. He's getting into a bit more businesses.
12:04 But yeah, they've been nurturing. They've been great. They've allowed us to do what we want to do. It's not a yes or no, it's, 'Come to me, let's talk', you know, 'Let's work out a way'. So they've been great. They'll always be in property. I mean, they've got a lot of properties. Mum's always been involved in the business, obviously, not as much as dad.
12:24 But she's part of it. She's in the office daily. But yeah, she's more the mother to go-to when you need an issue solved and there's a problem. So she's the office mum, we call her here. So she looks after everyone.
With there being so many pathways in property development, the Fayad family settled mainly on apartment developments. But now the brothers want to shake things up a little.
13:23 The apartment development was a strong point at the start. Seeing the development, just seeing it come alive...You'd be on the way to school, I'll be driving past that development site.
13:35 And I'd see the apartments going up. And we were building one behind the school. So when I was in class, people were saying, 'Oh, that's your development'. That gave you like, pride, you were proud. You know what I mean? So seeing stuff like that people saying, 'Oh, your family's doing well, your company's doing well', it inspired me to want to keep doing it and keep that tradition going.
THE BROTHERS WANT TO CREATE MORE COMMUNITIES IN THEIR FUTURE DEVELOPMENTS.
13:53 So apartment development is always the best. But now, with the new group, my brother and I, we want to create more communities. And I want to give that retail mix, I want to give that vibe to each development. When you walk into an Ellerson development, you want to know it's an Ellerson development. Good retail makes good living. That's why we will always be apartments. It's what we know.
14:15 It's what we've been doing for over 50 years, what the family has been doing, so I think that is our strong point. And we'll keep doing that. But yeah, it was always apartments, not to say we won't do anything else, but apartments will be strong points. We've developed commercial buildings in the past. We've done townhouses, we've done retail shops, we've done shopping centres, but we just always 90% will always be apartments.
14:37 And on a scale of the apartments, like how many apartments do you usually look at doing on average?
14:49 There are always about 2000 apartments under construction at any given one time. In the planning, there could be up to, I mean, there's some of the big developments like we've got one in Leppington which is earmarked for 15,000 apartments in a 80,000 square metre shopping centre.
THEY’RE HERE TO STAY LONG TERM.
15:04 So obviously that's not being built overnight. That's a 10-15 year project, which will be built over time. There's one in Schofield, which is 4000 apartments, one in Parklea, 5000. So we're really, we're long term. We're here to stay, we're developing, we're working with local communities, working with local councils to get the best development.
15:25 So we're, like I said, we're proud of what we develop. We're not here today, gone tomorrow, we stand behind our products. And yes, so the kind of development that we're doing, we're creating communities, creating many suburbs, you could say, yeah, and we really, really enjoy doing that. It's not just putting up apartments and hopefully leasing the shops later, we're getting that retail mix, right from the start.
15:47 We're engaging retail architects, retail agents to get that input to make it shorter, more viable developments.
Ellerson Property are dealing with large scale developments, constructing massive apartment complexes, building communities and even creating suburbs. How are they finding the demand for these kinds of works?
16:22 Obviously COVID has put a pause on immigration. But before that, there was a huge drive we saw. I mean, everyone could see that Australia's the safe haven, everyone's coming to Australia, whether it's investing or wanting to move. So I think the demand is there from overseas, especially once tourism picks up again. But I think, like I said, our developments are not two year projects, they're 15 year projects, they're 10 year projects.
PARENTS ARE BUYING FOR THEIR CHILDREN'S FUTURES.
16:46 So we do know that the immigration is going to pick up again, the borders are gonna eventually open, it's not going to be closed for a while. And we're still seeing a large number of locals here who are still buying for family members overseas. So mums and dads are buying property here for their future, for their kids to come out in the future and study. So study and education is a big part.
16:46 I mean, Australia's got the best education in the world. So you've got your background, like your Chinese, your Indian, they're all buying here, too, for their kids' futures. So between immigration, education and growth, I think those three cover us over the next 10 to 15 years, I would say.
17:30 And that's really interesting, because we're looking at long term like, you know, usually smaller developments take anywhere between, say, 12 to 24 months. And basically you're in and out and you got your cash and so forth. But you're looking at like 5 [or] 10 years, how do you actually sustain a business for that period of time?
18:07 So when I say a 15,000, or 4000 unit development, it's not getting the money for the 15,000 units up front, you stage it with the funder, you stage it with whoever your financier is at the time. So yes, it's a 15,000 unit development, but they'll look at it 500 units at a time, and you'll deliver it in stages. So they're gonna fund you for the first 500. They'll roll that money into the next stage, the next stage, and the next stage.
THE BUSINESS RUNS BECAUSE OF THE CASH FLOW THEY’VE SECURED.
18:31 But at the same time, we've got a pool of assets, we've got commercial buildings, we've got retail assets, we've got hotels, a hospitality business where we keep funding for that as well. So there's a lot of cash flow, but cash flow is king, you need a lot of obviously major cash flow to keep businesses going. But at the same time, the construction development arm of a development is run through our finance team, and they forecast.
18:58 So they look at it in stages. And we've got a head of finance, we've got a finance director, who's ex-ANZ. So he understands the whole process. And he's got the context in the industry. So they will continue to work with the funders, and we like to only work with a minimal amount of financiers.
19:14 So once you've delivered one job, or two or three jobs, they trust you, the trust is there, and you just keep repeating business, and they know you're going to deliver, so the risk is a lot more minimal. So a key to that would be proving yourself in the first couple. And then yeah, they'll naturally just come back to you, and want to do more and more.
19:31 Fantastic. Yeah, that's always been the challenge, I guess, with any development because I think at the end of the day, when people are actually buying property just to invest, they hold on to it and you've got your stable cash flow from rentals, but with these ones, as you said, until you actually deliver on it, and obviously with pre-sales and so forth, that's when you keep rolling the funds through.
19:49 But I mean even the pre-sales now there's a lot of build to rent that's happening now. So, financiers are good, they're more business minded. Your traditional banks when we used to go with Westpac, ANZ, there was 110% debt coverage, which in this market just never gets off the ground. So financiers now have understood the markets changing and doing a lot more build-to-rent developments, which we're also doing a few of them too.
FAYAD HAS BECOME MORE INVOLVED IN THE FINANCE SIDE OF THE BUSINESS RECENTLY.
20:14 So it's educating them as much as just asking for money. Yeah, it's good. I now have over the last maybe four or five years, got more involved in the finance side, which has allowed me to travel a lot more to Hong Kong, to India, to Dubai, to get all these funds and see what people are looking for.
20:34 And I think they're willing to change, they're willing to adapt. So whatever the market is, this financier will change, or you'd use a different financier for a different project, just to keep it flowing.
Remon explains the concept of build-to-rent, outlining its key benefits.
21:05 I mean, it's been the talk of the town for the last year or two, but there was no incentive, there was no real incentives for developers to do it. But recently, the government has come in with a 50% land tax reduction, if you did build-to-rent. So they started to realise this more and more, but in short build-to-rent is, obviously build it, and you can only rent it. And you've got a renter for a certain period, there's got to be an onsite manager, there's got to be amenities for the community.
21:32 So like a community centre or somewhere for the residents to meet. It's good. It's again another element of the business where it can assist you with cash flow. Financiers like it. So basically, you do a development site, you'd rent it out, and then you'd refinance. And that's how financiers live out. Or a financier has two different arms where they have a construction loan, and they have a long term hold asset loan, so they'll do both.
BUILD-TO-RENT IS BEGINNING TO TAKE OFF WITH GOVERNMENT INCENTIVES.
22:02 So another pool will refinance it and just keep the money turning there. So you pay them interest or whatnot. So there's a lot of people doing it now. And it's another good thing for people, where obviously affordability is an issue in Sydney for a lot of people. So rental is their only option. And yeah, you'll see a lot more coming up. And yeah, we'll continue to do some, but it's good. I mean, you can still own assets and you can rent at the same time. So I think a lot of people are doing that now.
22:34 That's great. So just to clarify and understand you would be building the, as a developer, building the apartments, and then also to be private property, managing them as well as renting out to tenants as well. Therefore, you literally have to set up an arm to run that?
22:48 The property management. Yeah, so we've got a property manager in here as well, who will be doing that. But again, it allows us to then either go to the local real estate agent or run it with us, depending on how big it is or whatnot. But yeah, we got a property manager in-house who runs that whole thing. But yeah, you're right. It's another arm, you're basically setting up the business to purely look after that. So yeah, there are many hotel service, department kind of developments.
23:09 It's very smart. It's like, almost like you got a big chunk of cash coming in from the sales of the properties. And then you also got your rental arm, which is the long term strategy.
23:17 Exactly, and that's what I said, cash flows, and that'll be the cash flow that can help the business running whichever business needs.
23:24 I mean, I heard a few developers say, you know, build some, keep some, sell some, you know.
23:28 Yeah, we used to do that. So we'd sell some in the development, and then we'd keep some, like 10 or 20 in the development. But now we've actually said now let's do proper build-to-rent developments where it's pure rent. I think in the next three years, we've earmarked about 3000 apartments to do as build to rent.
23:46 And it allows options as well, there's a lot more people who want to rent. So there is the market for it. And yeah, it allows us to give options for both people.
24:03 And then talking about finding financiers. You're talking about going overseas to get funding and so forth. Are we talking about private funding? We're not talking about going to a banking institution overseas?
24:12 No private funds. Yes, so private funds, overseas managed, whether it's a super fund or private funding, but it's funds from overseas. So the fund managers for these private high net worth individuals come through us.
What is it about Australia that these private investors are attracted to compared to other countries?
25:01 Government stability is a big one, touchwood, there's never war. There's never controversy or major things that shake up the government. And Australia's still young, they can see the growth and the potential. It's distant from everyone, so it never gets caught up in all the European issues or the American issues. We're far away, we're safe, we're young.
AUSTRALIA IS FAR AWAY, SAFE, AND YOUNG, WHICH HOLDS APPEAL FOR OVERSEAS INVESTORS.
25:29 And obviously having the experience in it. If you guys have been there for 50 years, with all your experience, we know what you're doing. We know something's working, something's going right. So we know Western Sydney is our strong point, so we can sell that well. We can tell them where to live, what we're delivering, how we're delivering it, the return.
25:45 And again, you can say as much, but you need to show it as well. So we've obviously, we've developed, we've delivered in the past and with these funders, but I think going back to your question is it's the safety of the country, and the potential growth. We're such a big country with a small population of 25 million, but that will continue to grow.
26:07 People are continuing to come over and they know that there is money to be made for their businesses, but the growth, potential growth, is what the key is I think.
Moving on, I ask him about his company name, and where it originated from.
26:45 So Ellerson comes from, it's a combination of two words. The E L L is from a street we grew up in, it was my first house in Merrylands, in Western Sydney. So Ellis Street, Merrylands. I was there for the first five or six years of my life.
27:04 My brother was there probably for the first 10 years of his life, before we moved to Constitution Hill, so ELL comes from Ellis. And the second part of Ellerson which is the E R S O N is from Anderson Street in Parramatta, which was my brother and I, our first project together. So we combined the two where we first grew up and our first project and became Ellerson.
Remon describes that first development project they did as brothers.
27:51 It's a 23 story, 173 apartment development, which is a build-to-rent. So it also holds a lot of sentimental value to us, because we're going to hold it, we're going to build it, we're going to rent it and it will always come back to being our first development together.
28:05 So that's the one yeah, it's always gonna have that bit of a special feeling. Ground floor retail, on the park in the Parramatta CBD. And something we'll always cherish, I guess, and have that special feeling for.
28:19 And how did you and your brother find that first development site?
28:24 Again, luckily, we knew local agents. We had that site for a while. So we bought it probably over 10 years ago, I'd say. But this was before the Parramatta boom. So we actually had a DA approval on a six story, 50 unit development. But when Paramatta was changing, it was a growth, we took the opportunity. And we decided to rezone the site, which is obviously uplifting and changing LEP's.
THE BROTHERS SAW AN OPPORTUNITY.
28:49 We got it to a 23 story tower, increased the unit number, and yeah, got it through local agents and built that reputation in the industry, knowing all the agents, you know, they come to us, they know that we are capable of settling and delivering. So yeah, it was just a simple, nothing out of the ordinary acquisition of just a normal, clean acquisition. And we ended up with the one that we kept, the one that we're gonna always have a special, special place for us.
29:19 Absolutely. So 10 years ago, you purchased it, had the DA approve on it for 50 units. And then with the change in that, how did you go through that process?
29:38 So it was actually our town planner, he was a consultant on the job. He said it was being approved. We're about to start construction and he said, 'Guys, there's a lot happening in Parramatta, as you know. I think this site has the ability to have more uplift', it was in the park so the design had to be specially designed. So it's actually like the building steps down. So it's not overshadowing the park.
29:59 So, a planner told us that, and we went to the council, we said, 'Would this be something that you would support a rezoning for?' They said, 'Yes, definitely. We're all for it. Taking into account the overshadowing of the park and surrounding properties'. But from there, it started, we went through a design competition, we got the rezoning done first. So we re-zoned that to 23 stories.
THE COUNCIL WERE ON BOARD FOR THE REZONING.
30:21 And then went into a design competition. So three local architects all put their submissions in and went through that. And the winning architect was a group in the Eastern suburbs. 'Alexander design group'. Yeah, and now the building's under construction up to level nine I think, out of 23. And yeah, moving forward. So you can see that, if you buy a site today, doesn't mean you get to build it tomorrow.
30:48 So we bought it 10 years ago, and now it's under construction. So people would say, 'What's taking so long, why is the site not moving?' But in the background, you see how much work goes into it. It's not about, like you said earlier, there's so many aspects of the property life, it's not just buy the site, build tomorrow. It's planning, dealing with Council, local government, design competitions. A rezoning process takes two years.
IT DIDN'T HAPPEN OVERNIGHT.
31:11 Then the DA takes another you know, design competition, and then is pre-sales, obviously not for this one as it's build to rent, but a lot goes into that, those early stages of development.
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.
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.
1:32 And you mentioned CC, what does that mean for listeners out there?
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.
1:48 And usually how long does the CC period take?
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.
Having achieved a phenomenal amount in a short time, Remon praises his team for helping to propel the company forward.
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.
He admits that no matter how brilliant your teammates are or how much you plan and prepare, there are always setbacks.
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.
6:31 Talking about actually understanding and running, how many departments would you say you've currently got in your business at the moment?
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.
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?
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.
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.
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.
11:55 It sounds like your father was a loving man, but also a tough businessman as well.
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.
His father was a massive influence in his personal and business life. But did he have any other mentors throughout the years?
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.
I ask Remon what kind of materials he read to inspire himself.
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.
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?
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.
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?
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.
20:50 Excellent. And what about for yourself personally, what do you see for yourself in five years time?
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.
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?
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.
Thank you so much to Remon Fayad for taking the time to speak with me on Property Investory.