In this episode she takes a look at dramatically dropping developments, the importance of being prepared in any market— especially a volatile one—, and finding the confidence you need to follow through with your strategy. She also delves into how we can work on our conscious states with one handy little item we all have somewhere in the house, and shares why she’s so glad modern freezers don’t need to be manually defrosted!

Timestamps:
00:52 | The Market and Mindset
02:44 | Development Stages
04:03 | Be Prepared
09:04 | The Ol’ Ego
14:08 | Freeze it Away
16:05 | Halt!
19:01 | Dark, in More Ways than One
22:02 | Don’t Feed Your Fear

Resources and Links:

[00:14:35] And it's a form of dumping because it's all in your head. It's in your thinking. We do this to ourselves, Tyrone, and we don't do it. No one else does it to us. Yes, the situation might be difficult, but it's how we interpret that situation and how we deal with it that is the vital step to move us forward.

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 of Mindset Monday we’re chatting with life and property coach Jill McIntyre. Not afraid of a challenge, she jumps straight into the uncertain market, starting with the New South Wales south coast. While interest rates and the cost of materials may be rising, that doesn’t mean every investor’s stress levels should be.

Tyrone Shum:   

With the market having turned and with interesting yet testing times ahead, developers are facing some unique challenges in the current environment. McIntyre has come prepared to chat about the mindset behind the developer, and has brought a full freezer’s worth of advice and tips with her.

Jill McIntyre:   

[00:00:52] This is a pretty big topic at the moment, because we're talking about tradies, we're talking about cash flow, we're talking about interest rates, we're talking about the where the market is going [situation, like] is it dropping? What's the long term situation? So there's a lot of components that lead into the bigger question of what we're moving forward with. It's really the bigger picture that we're looking at. 

  

[00:01:22] But what I'm finding more and more with many of my clients who are in a situation where they've got two, three and four properties, and they're wanting to multiply and grow. 

 

[00:01:34] One, for example, at the moment is in the Wollongong area, and looking very much about what's happening at the market there because it's dropped dramatically. And he's doing a six townhouse development. 

  

[00:01:48] But at the same stage, he well and truly is following the market on a daily basis, to know whether it's going up and down, whether he will sell when DA comes through with approval, or whether to keep it. 

  

[00:02:01] Always be very, very mindful of the multiple options of thinking outside the square to be able to find a solution that fits. I think, also, Tyrone, we've got to be mindful that although when we start a development, for example, we do our due diligence, we work through it all. We've got the feasibility, all of the numbers stack up according to what we've done in our research— we've also got to fit in with the market and be able to follow the market and read the market. 

 

[00:02:33] And our intention might be to go through with a deal right to the end, and sell off the plan or to sell off individually or keep or whatever you want to do with the end product. 

Jill McIntyre:  

[00:02:44] But we've also got to be open to be looking at the different stages of development. Would it be better to cut and still make a profit? Yes, but not as much money and sell off with DA approval. All of the different leverages of what comes in to be able to assess it, still making money because you've value add[ed], and you've also been conservative with your numbers at the beginning. 

 

[00:03:12] So I think the big key is keep your foot on what's happening in the area, also be looking at what are the exit strategies that could benefit you. And some of them might be, No, if I sold at that stage with DA approval I've seen from years ago when there's been a drop in the economy, in the market, that people have gone through all the stepping stones and get DA approval. But by the time they get to that stage, if they were to sell, they wouldn't even recoup their DA approval costs and everything that's incurred with it. 

  

[00:03:49] We're not at that point in the economy, which is a plus and a half. But nevertheless be open to different exit strategies and what works best for you. We're talking about risk factor here. Would you agree with me, Tyrone?

Tyrone Shum:   

[00:04:03] I think you've hit a really important point here. Because the fact is, is that yes, when the market changes, a lot of us need to also be prepared. Especially when before you jump into development, you've got to work out all the multiple exit strategies, particularly the worst case scenarios. And not that we all want to have these things happen. 

  

[00:04:25] But unfortunately, when the market turns, and no one expects that, you want to be prepared to see that. Because the last thing you want to happen is when it does turn and things like this happen and you're not prepared for an exit strategy for maybe, for example, selling it with a DA or maybe having to liquidate it just so that way you can actually not make a loss or anything like that. 

 

[00:04:44] A lot of developers unfortunately are not prepared for that. And I've seen that happens way way too often recently as well. And then when rates go up, increasing costs of materials, all those things actually have a huge impact on the development and no one could easily have predicted that instead of actually having a 5% buffer in their feasibility, you end up having to have maybe 10% [to] 20% on top of that, due to the increase in costs.

Jill McIntyre:   

[00:05:09] Can I just come in there, and I think one of the golden rules in anything in property is when you're working on a development of any size or stage is to always have a number of exit strategies. And that is number one. 

  

[00:05:25] When you're newbie developers, of course, you're starting off with, 'I'm going to buy and hold' or, 'I'm going to buy and this is what's going to happen'. But we've got to think wider than that. And with experience under your belt, you'd know exactly those that are listening to me with multiple developments on the go. And with your vision of where you're going over the next 12 months, keep on thinking outside the square. If scenario A, B, and C happens, what could you do? And what's the outcome? How could you make this work or a bit of fit for you? Because we've got to also fit in with where the market is.

Tyrone Shum:   

[00:06:00] That's right. And I think what's really interesting is, the market has cycles in the property market, I think everyone realises that, especially with experienced developers. A lot of them who have been through two or three market cycles really understands how that works. 

  

[00:06:16] And the thing is, is to understand that there is different methods or different strategies to approach different markets. In, say, for example, a booming market, as you said, with a DA approved, then you could consider going all the way through to building it, and then selling it because it seems to be a less riskier strategy due to the fact that a rising market can increase your sales prices and cover any mistakes you have. 

  

[00:06:42] But maybe say in a flat, or maybe a down market, the strategy will have completely changed because you may want to go all the way through, or you may need to look at multiple exit strategies, as we discussed, to be able to go, 'Okay, which one's going to be the best [and] suitable for this market?' because there's a lot of uncertainty and predictability.

Jill McIntyre:   

[00:07:00] Well, I think you're also governed with the market turning and of course, interest rates have gone up considerably to when the actual feasibility might have been done. 

 

[00:07:14] So of course, you've got to stop and think with the rise in materials for start, an interest rate extra costing, that you might be on the agenda of being able to sustain with the money that you've already got from your investors or for your own availability. 

  

[00:07:32] So this is where it comes in about getting mezzanine finance for an interest rate, but how is that going to work? Because you've got to be able to sell your potential investment to someone that you've got to show the collateral that their money is going to be safe. 

  

[00:07:51] So it's also coming into the confidence that you've got in following through with this strategy. If you've got the wobbles about this deal going down, well, you need to actually be thinking twice about it, and perhaps getting and sourcing help from someone else so that they can go over the numbers, that knows what you're doing, and coming up with ideas. 

 

[00:08:17] Because when we're imploding in a situation where it's tough, where money is cash flows, not falling into place, interest rates up, materials up, everything is happening, what we're doing, we get very caught up in our own thinking and our own mindset. It's purely a day to day basis. 

  

[00:08:41] And sometimes we need to seek help to get out of that way to try and think about another way of working. There's always ways Tyrone, but we've got to find it. But then you've got to be able to sell it to the potential investor, when the market is against you, at that particular time. So you've got to do a change and a shift in thinking too.

Tyrone Shum:   

[00:09:04] And this is [a] perfect segue into my next question to ask you is: In regards to the mindset, because if you've done a few projects, and you've been successful in the up market, in the market that has just been passed, and you've been able to go deliver on these things, but then the market now suddenly changes. And you've not really experienced something like this as a developer, I guess what kinds of things would you want to try and keep in the back of your mind or frame your mindset to be able to overcome these kinds of challenges?

Jill McIntyre:   

[00:09:39] Well, let's face it, the old ego can kick in and take over and tell us on a daily basis that who are we to be able to have a successful deal? Now, you might have done a dozen successful deals up to that point. But when the chips are down, our ego and our thinking and the little voice in our head can certainly take over and tell us a very different story 24/7. 

  

[00:10:05] And this is where we've got to keep on feeding our mindset with positive stuff. There is a solution here, where is the solution? How can I do and find that solution? 

  

[00:10:19] And a good way to do it for me, Tyrone, would be [to] draw a line down the centre of the page, and on the left hand side is a negative side and the problem, [and] on the right hand side is the solution. 

  

[00:10:31] And on the negative side is very much: I can't just imploding in where I am, how can I move and shift this project? And what would the solution be? And from that, one of the positives would be: What am I going to do daily that's going to encourage and support the mindset that's in a positive space, to be moving forward to go out and meet people? 

  

[00:10:58] If you don't have confidence in what you're doing on a daily basis, and the chips are down, there's no way known that you're going to gravitate to the people who are going to help you, because they'll find the chips in your armour straight off. So feeding your mindset with a solution side of: What are you actually going to do that's going to support you? 

  

[00:11:23] And we've got to keep in mind that there's many people that have walked this path. I've lost money in property, I would suggest you have too, Tyrone. There's very few that get to the stage where we are, where we haven't lost money. And I'm not advocating to lose money at all. But when we're imploding, we think we're the only lone soldier in the world that this has ever happened to. And you feel embarrassed about asking for help or where to go. 

  

[00:11:53] But stop and think about who you can step out of your boundaries for and seek help from. Even Facebook pages where you can pose a question and different things. Or coming up with one of your podcasts, Tyrone, where someone else has gone through a similar situation to where they are. It doesn't necessarily mean that you will get the answers. But what you're doing is opening your thinking in your mindset that whatever someone might say could trigger off a solution that you haven't thought about before, or an opportunity. 

  

[00:12:33] So I always call it if you've got your 'Closed for Business' sign at the front of you today. Or have you got your 'Open for Business' sign out the front of you? And there's a very big difference. You're closed for business, you're stuck in your own head, and you're going nowhere. Open for business and you will attract. So keep that in mind.

Tyrone Shum:   

[00:12:55] That is very, very true. And I can relate to that just from last year's experiences. Because of the changing market. Things were just unfortunately not the best for me last year. But I guess in sharing those kinds of experiences where the market changed, there was a lot of uncertainty. It also impacted some of the development deals that I was involved in as well, too. And touch wood and thank God a lot of them now have started to come to fruition. 

  

[00:13:23] But I think there was a short period of time where I just had my head down and bum up. But I just couldn't get out of my head because I was just so worried. And I just guess all I could do was just write down solutions, just like exactly what you said. 

  

[00:13:36] But you just kept looking at it and going: Why is it taking so long? And you get frustrated. And that's been the challenge that I've been also struggling through my own head. 

Coming up after the break, she shares a tried and tested tip…

[00:14:08] This is something that I shared with Tyrone along in a podcast a number of years ago.

Why you should try to shift trains of thought…

[00:16:48] In your conscious state, this is where your motivation, this is where your drive, your adrenaline comes from.

She explains why we shouldn’t view the world as a dark and scary place.

[00:20:59] And if we did something like that, we've got to really think outside the square to be creating those three things.

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

McIntyre has a bag full of mindset tips and tricks. One of her favourites involves some household items you’re sure to have easily accessible— especially if you’re in the kitchen.

Jill McIntyre:   

[00:14:08] This is something that I shared with Tyrone along in a podcast a number of years ago about any thoughts that you have that aren't serving you, people who could have been in deals with, or situations or outcomes. Write them on a bit of paper and put them in a jiffy bag in the bottom of the freezer. And thank heavens we've got fridges that we don't have to defrost today. And there they stay. 

  

[00:14:35] And it's a form of dumping because it's all in your head. It's in your thinking. We do this to ourselves, Tyrone, and we don't do it. No one else does it to us. Yes, the situation might be difficult, but it's how we interpret that situation and how we deal with it that is the vital step to move us forward. And the more we get consumed in our negative thinking, the more we will go down, not up.

Tyrone Shum:   

[00:15:07] And I noticed that last year, unfortunately, because it was just so stressful. So much all happened all at the same time. And I think at that point in time, as I'm a strong Christian believer as well, too, I got close to the god. But not only that, I started to also make a habit or routine to listen to positive YouTube videos that were giving me that kind of change in mindset, because that was the struggle I was going through. 

 

[00:15:32] And I still do today. Every morning, I wake up, and the first thing I listen to is a strong, positive message either through a sermon from a pastor or a motivational speech through business mindset, and so forth. 

 

[00:15:44] So I think that really helps. Because we can wake up in the day or in the morning, and have either a positive mindset, positive thoughts coming through the head, or you can start worrying about, you know, what's the next thing gonna happen? How do you fix this up? And if you set the mindset right in the morning, which is what I've been trying to do, it really, really does help set the day really well.

Jill McIntyre:   

[00:16:05] So just stop there. You're telling yourself you're trying to do it. So you're sending a message to your subconscious that you're trying.

  

[00:16:14] Now, what we need to do is to shift the train into a positive that this is what you're actually doing. You're walking the path daily. Because remember, coming back, that you and I are speaking and doing this podcast in an hour state, in a conscious state of thinking, Tyrone. You're getting up every morning, and you're listening to positive stuff. This is in your conscious state. And we only spend one to 5% of our day in a conscious state. 

  

[00:16:48] In your conscious state, this is where your motivation, this is where your drive, your adrenaline comes from. The more that we can work on our conscious state, and raise the bar there, rather than our subconscious, which is 95 to 99% of our time, that's on autopilot. Yes, we need our subconscious to follow through. But at the same stage, whatever picture we are painting in a conscious state with our vision, that's being related through to our subconscious, it's then conforming as if it's correct. 

  

[00:17:27] And it can all be negative stuff, but it doesn't believe it. So we've got to be feeding positive stuff into our conscious state in a daily basis, to be following through with the back end, which is our subconscious. 

  

[00:17:46] I've got clients these days, and I call them in the very select elastic band club, as I call them. Go to the supermarket and buy a bunch of broccolini for $2.95 today, and the more that you can put your little elastic band— you can throw the vegetables away, this isn't important in this exercise. But what you do is put the elastic band and every time you feel that you're moving out of a conscious space into something that's not serving you, pull your elastic band, and ping yourself. It will automatically take you back to a conscious state. 

  

[00:18:27] This isn't life and death with a deal that is going through hardship. It is a way of working through the process in a conscious state that you're open for change, you're open for growth, you're open to bring in positive thinking and help. Because if we go back to where you were last year, did you try and do the lone soldier and do it yourself? Or did you reach out for help and support from people that you valued?

Tyrone Shum:   

[00:19:01] I can picture very vividly. I was in my office. And in my office it's very quiet and dark at times. So yes, it felt that way for a lot. And especially when I got up quite early, actually in the mornings I was doing about 5am starts. So that way I didn't have kids and all that. But it just felt very quiet and dark when I was going through there. So it was very vivid in that memory. 

  

[00:19:25] So yes, I think [for the] majority [of the] time I did the lone thing. But I still had a lot of calls coming in from clients and stuff like that when we were going through this challenging time. So that really wasn't reaching for help, it was all about trying to put out the fires.

Jill McIntyre:   

[00:19:41] Hear what you're saying. Because you were going up and down in your own space. You were regurgitating the hardship and the trauma that you were going through. And yes, you were waking at five o'clock because that was the time where you could start to work without the kids. But I would say you would have been waking up with very little sleep overnight too. Because even in your sleeping hours, your brain was still going 110 miles an hour. Because of all of the ramifications of what's at stake here, if you don't get out of where you are, or what's happening, or every bit of news that comes through seems to be adding to the doom and the gloom. 

 

[00:20:23] And if you can go into solutions mode all the time, this automatically flips your thinking from a negative into a positive, into a now state. We are quite often in a negative state in our subconscious, because that's the patterning that we've learnt to cope by shutting down. We need to be more conscious about, okay, this is my space right now. But what's the three things I'm going to do today that are going to be a positive move forward to help and support my growth today? 

  

[00:20:59] And if we did something like that, we've got to really think outside the square to be creating those three things. Because everything's hardship, everything's attached to hardship. I haven't got the time today, I haven't got the money today. Oh no, I can't go to them and everything's wrong. The whole world seems to be dark. 

  

[00:21:20] But in actual fact, we've got to step out of that space. And we've got to do something about it. Because no one else can do it. It's only us. We're doing a good job on our head.

Tyrone Shum:   

[00:21:33] So if we try to reframe that, rather than it's too hard, I don't have the money, I don't have the clients, it's like, tomorrow, or today, I'm going to be able to find a solution to be able to provide the money so I can pay my clients back. Today, I'm going to find that project where it's actually going to be very profitable for this next development solution or site that I'm going to be doing. So reframing, from what I'm understanding, is very, very important in helping us change that mindset from the negative to the positive.

Jill McIntyre:   

[00:22:02] If you're going to keep on telling yourself, 'This is too hard. I don't want to go there. Oh gee there's no solution here. The short of money, how are we going to pay for the electricity bill, let alone anything else and the interest payments?', if you keep on reinforcing that, that's what your conscious state is sending to your subconscious. Hardship, scarcity, fear. 

 

[00:22:25] Now, the fear stacks are always there. And we are absolutely feeding our fears, like a vampire going to the blood bank for the afternoon tea bit. And we've got to get out of that space. It is a mindset space. 

  

[00:22:43] I always say that property is the vehicle that we're all riding on. But the bigger picture is the vision and our bigger outcome is our mindset. That's our driving force. And we've got to look beyond that. 

  

[00:23:00] The good thing is that, yes, things are harder for some people and developers at the moment. But there's lots who are still thriving because they were conservative with their numbers to start off with. And they factored in 2% interest. Well, it's gone beyond that, even in the interest rate rises. 

  

[00:23:21] But the bottom line is, there's always got to be another way. I had a session last night with a client. And we're looking at getting some money out of a deal to feed into another deal. And working of solutions, there would have been about six different solutions that could be ways to do it. But if we haven't been down this pathway before, we're not open to it. 'Where do I start? How do I do? How do I structure it? Who's going to want to come into a deal that's falling over?' We look at yes, it might be falling over at the moment. But long term? If we thought differently, is there a different outcome that we could have on this solution? 

  

[00:24:06] So it's coming up would some short term money boost help you if you could work in a different direction. And you've got to work on the possibilities to create those daily inputs of moving forward.

Tyrone Shum:   

[00:24:22] I love that. And I was gonna say one thing that I found that was really helpful is to have somebody else to talk to, or to be a bouncing ball [to] bounce ideas and put them on there. So that way you can come up with the solutions. Because I think that's what I lacked last year was that I probably didn't have enough support in that site to be able to bounce ideas and get thoughts out there. And as you said, that person came up with six solutions because you were on the call with him, which is phenomenal.

Jill McIntyre:   

[00:24:50] The other thing is, too, that's important is don't keep on working on the solutions just in your head. Your head is overloaded when we're in that situation. Your head is a cracking point. And this is where it's very, very good to find other ways to work through solutions. 

  

[00:25:12] Writing is a very good viewpoint. Now, you mightn't be a good writer and all the time, your ego will come in and say, 'I haven't got time to do that today. No, that's not going to aid me'. All these sorts of things. So you start to think about, there's got to be an escape valve in where you are to let out what is not working for you today, to allow new stuff in. Otherwise, we just keep on uploading more and more with head overload, which is really difficult. 

  

[00:25:45] So start to write what's bugging you right now. Get it down, and feel that you're dumping it, put it in the freezer. Go back to that one, leave it there. And you've got to think of this process of if I'm gonna put something on paper, my heart and soul's going on that paper because I'm bummed or I'm annoyed or it's not working, or the money's not happening or whatever that you're putting in the freezer. 

  

[00:26:13] But you've got to believe that you are disempowering that thought that you're putting into the freezer. You are taking the control out of them controlling or it controlling you. And you've got to believe that by you being in charge and them being frozen, you frozen them in time. You've frozen it in time. That gives your head more space to expand and to think and to grow, and to bring in new pathways and opportunities. 

 

[00:26:52] Because if you just put things in the freezer, and you're not really working through the ownership of what you're doing to release it out of one area and put it into another, it is important. 

 

[00:27:07] When I'm suggesting also, I had this discussion with a client this week, because I'm very big into writing and dumping on paper. And that was one exercise I was doing with this client. And she said, 'Oh, can I type this? I feel I'm far quicker at typing than whatl I am at writing'. 

  

[00:27:27] And I said to her, it was interesting because about three or four years ago, I had a client that went through this exercise. And the next week, he came back to me and I said, 'How did the dumping go?' He said, 'Oh, it was terrific'. He said, 'I wrote pages and pages'. And he said, 'I did it on the computer because I can write quicker'. And he said, 'Yes, I've printed it out and gone through'. And there's another exercise of which you can burn it and diminish it and whatever. 

  

[00:27:59] And he said, 'I've printed the pages out, but I've kept the actual writing because I'm so proud of it'. And I said, 'You're dumping it out of your head to be sitting in the middle of a computer that's now toxic. What are you going to do with that?' 

  

[00:28:14] So this is where it's very, very important to me to put it on paper in a spiral book or something that you can pull out, tear, burn, get rid of, but go through the process as you're doing it. What are you actually doing? You're releasing it from your thinking, you're dissolving it, you're allowing it to go out to wherever you want it to go in the freezer, but put it on paper and not to computer if you're typing.

Thank you to Jill McIntyre, our guest on this special episode of Property Investory.