Fayad Fayad - Learning Every Aspect of Business and Expanding: The Fayad Brothers Fly the Nest.
With over 20 years of property and construction experience in a variety of project and executive-level roles, Fayad Fayad is the co-founder of Ellerson Property.
Established by Fayad in conjunction with his brother Remon, Ellerson Property is a development group specialising in the creation of premier residential, retail and commercial property, both in the Sydney market and across the country.
Join us in this episode as we learn about Fayad’s experience with construction in his early years. Learn how he thrived in the business straight out of school, climbed his way through the ranks of the company and recently took the leap to start his own business, developing large-scale projects
with his brother Remon.
Resources and Links:
11:39 I was speaking to him the next day, talking about this school, and I said, 'Yeah, I'm all done'. And he goes, 'Okay. Tomorrow, you're on the site, full time'.
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 Fayad Fayad, co-founder of property development agency Ellerson Property. Fayad’s experience with construction began when his dad pulled him into the workforce after his exams finished. Learn how he climbed his way through the ranks of the company to develop large-scale projects with over 15,000 units!
**END INTRO MUSIC**
**START BACKGROUND MUSIC**
After years of experience working as part of his fathers company, Fayad and his brother took the plunge and launched their own business last year.
00:42 The way I approach my business is that I work for my business, and I work for my staff. So what that means is that I don't have a typical day—apart from my set meetings that I have with various different team leaders—my day usually consists of attending to the business's needs.
1:16 So whether that might be attending a construction site to make some decisions out there or give some guidance, or jumping into a sales meeting to help advise or just roaming around the office and making sure everything's okay, and then dealing with their questions. So I'm very responsive to emails. I don't like to have so much of a structured day apart from my timings. But what my days consist of is really attending to business and staff needs.
Being co-founders, how do Fayad and his brother split the responsibilities of the business?
2:07 Currently, my title in the business is co-founder. So we haven't at the moment decided on having a typical structure, my brother and I, so we've decided at the moment— it may change in the future— but at the moment, we'd like to be dual founders. And then we have a general manager that oversees the operations.
THE BROTHERS PREFER PRACTICALITY TO A HIERARCHICAL STRUCTURE.
2:37 And then with him, there are the team leaders, whether that be in planning, sales, marketing. So it's a very flat structure, we don't like to be very hierarchical. So it's very much, whatever you need to get the job done, that's all we need. It's not about setting up a myriad of reporting lines, it's just 'let's get the job done'. So that lends itself to us, Remon and I, to be co-founders, which is more practical, rather than a typical CEO sort of arrangement.
3:13 Absolutely. You guys have had a very interesting background in your history, working in property development for pretty much your whole life and you've grown up in that family of it. But let's jump back then to talk a little bit about yourself personally and get to know you. Maybe let's first start off with where did you grow up?
3:34 So I grew up in the Western suburbs of Sydney. So where we are now, I grew up five kilometres down the road so we just maintain the area. So I haven't gone far from where I've grown up.
3:53 What's it like to actually grow up, go to school in the area and then also work in the area and now that you're only five kilometres away from where you grew up? What was it like for you to go to school and stuff like that?
4:08 The family has a lot of background in the area, so my uncles went to school in the area, my mother went to school in the area, so it is home, but it didn't feel like I was brought up here, it was the family who was brought up here. So the schools I went to, my uncles went to, both primary school and high school. So the feeling was born before I actually went into the schools.
THE FAMILY HAVE ALWAYS LIVED AND WORKED IN THE WESTERN SUBURBS OF SYDNEY.
4:54 It's a very proud feeling, what it was like to grow up in this area and to be in this area at the moment, still doing business. And the way I drive to work is the way my mum used to drop me off to go to school. So it's kind of it's same road, just a bit further down the road. So it kind of takes me back, memory lane every morning on the way to work.
5:25 So mum would drive you to school, you'd go down that same path which you drive to work as well. What were some of the fond memories that you had back in school? So, primary school, growing up?
5:44 There's not much I remember at primary school, I guess. I do definitely remember my first day, and the tail end of primary school, getting into year four, five and six. I just remember it being a very tiny school. There were about 170 [or] 180 students in the school. So it's very close knit.
6:09 I remember one of my fondest memories of primary school was the weekend sport. I was into education, but the highlight for me was the weekend sport. I actually played rugby league from the age of four and a half all the way up to 13. So that was my whole primary school years.
6:55 So tell me a little bit more about the rugby side and the sporting side, what drew you into doing those activities?
7:01 I think with rugby league, being in the Western suburbs of Sydney, I used to follow— and I still do follow— the Parramatta Eels. And I think even in the early days, maybe even before starting rugby league, I used to watch it on the weekend or on a Friday night, and then it'd be something that I'd want to aspire to do.
7:39 So naturally being involved and supporting a team and then actually playing for your own team on the weekend. We kind of just rubbed off on each other. My heroes of the day were on Channel Nine on a Friday night on the football field.
FAYAD AND HIS BROTHER WERE BOTH INTO SPORTS.
8:02 So when I had the opportunity to play for my school, it was what I wanted to do. Apart from other sports as well. So that was my level of respect or the level of following I had for the professional footballers on the field, watching on TV. It just meant that I had to do that myself. So yeah, just following in heroes' footsteps, I guess.
8:37 That's great. So did that love of sport continue on all the way through into high school as well?
8:43 Yeah, it did but I think when you get older, it gets a bit... not so much physical, but it gets a bit more professional. And I guess when I was younger, I was probably the biggest boy in class so my size would do the work. But getting older, I had to do a bit more. Training three nights a week. I went to a great school but it was kind of... I had to choose where my mindset was going.
9:11 'Am I going education or am I going sporting?' Our school was so dominant and so disciplined in their sporting that it was very hard to balance both. So coming from an ethnic background, I guess the best way or the most acceptable decision would be to go down the education route and leave the sport for our younger days, I guess.
10:04 And I guess going to school as well, did you go to the same school as your brother as well?
10:09 Yeah, we went to the same schools. We were, six years apart, but we followed the same paths. So I went to Marist High in Parramatta for my high school, just in Westmead there.
10:22 And what was it like? Because six years apart usually would probably be just when you're finishing high school, and then he's starting high school as well.
10:29 Yeah. I helped him in kindergarten when I was in year six, we kind of spent a year together at the same school, then I moved to high school, and then he carried through to primary school. And then in high school... actually, we didn't cross paths. I finished before he actually started.
FINISHING SCHOOL DIDN’T MEAN THE WORK WAS DONE.
10:54 So let's say you finished high school, what did you do after that? Did you go out and start working, getting some experience? Or did you also go into further education and studies?
11:31 So straight after high school, I remember my last HSC exam was on a Thursday. And my father, actually, I was speaking to him the next day, talking about this school, and I said, 'Yeah, I'm all done'. And he goes, 'Okay. Tomorrow, you're on the site, full time'. So yeah, last exam, I can't remember what that was exactly. But Thursday was my last exam. And Saturday I was on the construction site. So if my dad found out I finished on the Thursday, I think I would have been there on the Friday. And I've been at work since.
12:09 Gosh, oh, you gotta love your dad.
12:16 The next January, I went to do building studies at Hornsby TAFE. And did four years there, finished my building course. And yeah, that was it for education, formal education.
Fayad’s family have been in the development space for decades. What was it like for him to grow up around that?
13:08 I guess it was very aspirational. So my earlier days, even at school, being brought up in a property family, I guess it was something to look up to and be proud about. So I guess it was very easy to be brought up in the sense that I was very proud of it. I was very proud. I was very eager to learn from my father, from my uncles. I don't know if it was second nature, because I grew up on the construction sites.
FROM EARLY CHILDHOOD HE REMEMBERS BEING ON CONSTRUCTION SITES.
13:53 I mean, in my early days in primary school, my weekends were on site, obviously not like slave labour, but just accompanying my dad to the site and playing with the sand. I wasn't really working. But just being in the environment actually instilled something that is still with me today. So being in the family definitely wasn't forced on me. It was more like I was supported in the direction that I took.
Coming up after the break, Fayad reveals the struggles he faced as a young labourer.
16:03 It's hard to come in and tell people who are more experienced than you, to do something that they've done better than you.
We learn the efforts he went to in order to open his own business.
18:22 I made a point of dabbling in every section of the business, whether that be in marketing or sales or actually getting into the day to day, the nitty gritty.
We discuss the progression of his fathers business over the years.
21:54 So coming into the company, property development was just done by my dad and my uncles and a few planners and bankers, and that's it. But the other 98% of the company were out on the construction sites.
And that’s coming up next.
<insert money partner advertisement>
Having been exposed to the development world from a young age, the work came naturally to Fayad when he picked up his first tool. But he still had a lot to learn before he could reach the top.
15:18 Construction is very dog-eat-dog and just very structural, very tough. I don't know if it's the way I was brought up, but I didn't come in as the owner's son, I guess. I started on the construction sites as a labourer, sweeping the units, mixing cement for the bricklayers. And I worked my way through the levels that way.
15:55 So I didn't come in from the top for a couple of reasons, I guess it's just not in my nature to do that. And two, it's hard to come in and tell people who are more experienced than you, to do something that they've done better than you. So it's not very authentic to do that. So I worked my way through the sites, from labourer, to leading hand, to site foreman, project manager, construction manager and where I am now.
16:27 That's amazing. So how long were you working within your family's business, as well?
16:32 So I started in '99, when I finished school. So full time from late '99, all the way up to last year, actually, where I was full-time in the family until right now, where Remon and I have established our own development company.
OVER 20 YEARS OF EXPERIENCE HAS TAUGHT THE BROTHERS A THING OR TWO.
16:51 Yeah. And you would have taken a lot of great experiences over that period of time to be able to establish something that is yours. And now your brother's as well, too.
17:01 Yeah, correct. There's a lot of lessons, a lot of good lessons, hard lessons, that came out of that 20 plus years, that set us up in a good frame of mind and good backing to set up something new. So it is new, but it comes with old and tried and tested processes, I guess.
Working on sites wasn't the only thing he did over the years. How did Fayad prepare to become a business owner himself?
18:22 I made a point of dabbling in every section of the business, whether that be in marketing or sales or actually getting into the day to day, the nitty gritty, so that when I was eventually overseeing all of them, I could speak to the sales manager, in a, 'I've been there, done that' sort of thing, rather than, 'Well, I'm here, I'm the boss, just give me your reports and report to me', and crack the whip and that sort of thing.
RESPECT NEEDS TO BE EARNED, SO THAT’S WHAT FAYAD DID.
18:51 So I made a conscious effort to not spend just an hour in every department but actually spend a good portion of up to months in different departments, working with the teams to get firsthand experience of the ins and outs of every department. So that set me up and fast forwarded me. In the future, it allowed me to speak and earn the respect with them receiving whether it be an instruction or guidance from someone that has been with them and been in the trenches with them.
19:36 And that is so key and fundamental because when people actually understand that you've actually been there and done that and you can talk their language as well, too, they appreciate and respect a lot more.
19:53 Yeah, it's correct. And also I acknowledged that I've got people around me who are better at things than what I would be. And that's why they're in the business. So let's face it, spending one month in a sales team is not going to teach you everything. It does allow you to set frameworks and guidelines and give a bit of direction.
20:24 But at the end of the day, when it gets down to the nuts and bolts, you have to rely on people and take advice from people. And then I'd like to say that I really listen to people and I'm not arrogant in that sense, where I know best.
When Fayad joined the business over 20 years ago it was mainly a construction business, so it was natural for him to go into that side of the work.
21:14 I started on the construction sites and my family's business commenced as a construction company, which then evolved into construction and property development. So at the outset, from the establishment phase, it was a contract builder. So when I started in the company, in '99, it was at that stage where the company was more construction, and had a little office of development.
OVER THE YEARS THE BUSINESS HAS DEVELOPED INTO SOMETHING NEW.
21:48 Whereas these days, it's kind of the other way around. So coming into the company, property development was just done by my dad and my uncles and a few planners and bankers, and that's it. But the other 98% of the company were out on the construction sites. So at that time, that's when I did start in the business. So it was kind of natural to be construction. And being there, that's where I started and spent most of that time.
22:25 That's probably why I've got that construction background in me. That's my sense of release now, heading out to a construction site, even if I don't need to attend to anything, I just— rather than going out for a walk outside— I just duck down to the closest construction site and do a few laps through the building there. Just to get a bit of a recharge.
How did the business develop over time?
23:38 The construction team stayed as it is, if not grew even larger. It's the fact that the property team became a group. So in terms of where myself and my father would spend time, instead of being 90% construction site and then from four to six at night, looking at how the plans are going at the council, it became more of our nine to five.
24:11 And so we had to engage employee construction managers and project directors to oversee the construction business, because we've got that pretty much down pat. It didn't evolve from construction to development. Construction remained, and development just kind of grew another wing. Rather than evolve, it just expanded. So yeah, probably in the early days we had 98% of the staff on construction sites, and 2% in office, and now it's probably 60/40.
Fayad explains the difference between property construction and property development.
25:49 So the developer would buy the site, he would get the approvals, then pass the plans over to the construction side of the business, which is the builder. Build the building, the builder would hand it back to the developer, then do what they want to do with it, either sell it, live in it, rent it out. So I guess the best way to explain it would be if you were to engage a handyman at your house, you are the developer, and the handyman is the builder. So you actually have the final say, you rely on the builder's expertise to actually get the job done.
26:31 So for Ellerson Property, at this point in time, where do you lie at the moment? Or, where does this company lie? Is it more property development, or still be the construction?
26:55 We like to see it as a property development agency, rather than a typical property developer, that owns the land and does everything from planning to sales. And as a landowner, Remon and I have consciously set up the business so that it's like an agency model.
27:22 It currently provides the property development services for family assets, whether that be construction or office buildings that the family owns. And in our past, we've always been approached by other landowners that don't quite know how to get buildings up and running, whether that be from planning, to construction.
THE BROTHERS HAD A CLEAR GOAL IN MIND WHEN SETTING UP THEIR BUSINESS.
27:52 And we'd always have to turn them back because working for yourself and then working for someone else, there's different dynamics. There's a lot more reporting when you're working for a third party rather than for yourself. So when we set up Ellerson Property, we made the conscious decision that we want to future-proof it in such a way, that should someone have a parcel of land but they don't have the expertise to actually get an approval or get construction or sales or funding, they can come to us and and do it from that end.
Fayad built Ellerson Property from the ground up with his brother Remon with great success, but it hasn’t always been a smooth ride. He tells us about one of the mistakes he made in collaboration with the Hilton Hotel group.
Fayad Fayad 1:33
So I was on holiday with a few friends in the Gold Coast. And I mean, it's not our backyard, but we were there for a holiday, and the Hilton Hotel was getting built at that time. And it had an arrangement where you could buy the apartment and then put it back into the hotel pool. So it's kind of like, you buy it, but then you offer it back to the hotel, and then they run it. It's still running now.
But I guess it was like an impulse buy. I didn't do my homework. Put down the deposit. Paid a little bit of money for it. And right now, 10 years later, it's probably worth the same as what I paid for it. It took a backward step, and then came back in. And it's not a good reflection on the property space in general. This was bought in the middle of the boom, it was holiday hotel branded, it was kind of pumped up a bit. So that was my worst, and today it's still worth the same value. So in terms of being worse in property it means kind of staying where you are.
Tyrone Shum 3:19
Yeah. You lost opportunity costs there.
Fayad Fayad 3:22
Yeah. So it's kind of... if that's the worst in property, property can't be too bad.
Tyrone Shum 3:45
What was it that attracted you? Was it because potentially you could have gone up and used it in your spare time? Or is it because it's a branded type of apartment there that you could rent out? What was the attraction to purchasing that investment?
Fayad Fayad 3:57
I think it was a bit of both. At the time, I was buying a few apartments in different areas, like one in Sydney CBD and one in the Northern Beaches. And it was kind of at that time where I was looking outside of our nine to five business, I guess, and just investing in different aspirational apartments. The one in Queensland was what made me do it. I have a passion for getting into hotels, I still do now. And I think being part of a hotel sort of environment— it was an opportunity to be there but not be there. So just get a flavour of it. So buy an apartment, and you're actually part of a hotel. So it's kind of like you're thinking that maybe this is my way of getting into hotels.
So yeah, I do have in the back of my mind, I've always loved to get into hotels and eventually own hotels, either through Ellerson or through the family. That's a dream of mine, to get into hotels, and I saw this as an opportunity to one, have a place for holidays when I wanted to, and two, also to be part of a hotel environment, hotel business, I guess.
Tyrone Shum 5:36
So you've had a lot of experience and built thousands and thousands of apartments across... actually, has it been mostly in New South Wales, that you've built apartments in the past? Or has it actually gone into other states as well?
Fayad Fayad 5:52
We've invested interstate. We've been partners with other developers, but we let them do the role, because it's their backyard. Yeah. But our nine to five and where we get our hands dirty is in Sydney.
Tyrone Shum 6:09
So over that period of time, you've obviously built a lot of apartments, was there actually an opportunity to potentially convert one of them into a hotel?
Fayad Fayad 6:23
Yeah, I mean, structurally, it's fairly similar. It's just that property, it comes down to zoning as well. So we buy a lot in the residential areas. So it doesn't tend to lend itself to hotel builds. But the more we get into Parramatta CBD, like at the moment we're working on a complex where it's a combination of three towers, so two towers are actually residential, and one tower is a hotel. So it's been approved. So now we're just looking at ways to pre-sell the apartments and potentially, we're looking at the hotel structure, whether we engage a manager to run it, or do we sell the actual hotel structure to an established hotel operator.
FAYAD PASSION IS HOTELS, BUT IT’S A TOTALLY DIFFERENT GAME TO WHAT HE’S USED TO.
So it's funny you mentioned that because at the moment we're there. But I guess what I mean by 'my vision to be in hotels' is to actually be in the operation. So not so much as owning the building and then renting it out to, like, a Marriott or a Four Seasons, it's actually being that Marriott or being the Four Seasons. So that's where my passion is. That's a totally different business, I guess. And it could be another step in the door, the first step was the apartment in the Hilton on the Gold Coast. And this one might be developing and constructing the building as a landlord and then have a Hilton, or someone similar to that, being the tenant and operating a hotel out of it.
Tyrone Shum 8:17
Wow. It's amazing. You are living very, very close to your dream now construction-wise.
Fayad Fayad 8:22
Yeah. I can see it, it's on the horizon. I don't do things half-heartedly. So if I want to get into hotels I'd have to really know my stuff, and not just be a developer turned into a hotel operator. It's just a totally different ballgame. And I don't want to stuff it up.
Fayad’s ‘aha’ moment happened when he was working on his first development, which actually started as an investment property.
Fayad Fayad 9:46
I purchased a $500,000 four bedroom home on a block of land, a typical suburban home, cottage, I guess. So yeah, that was in my early days, a couple of years out of school. So I guess the 'aha' moment there was... I don't want to say how easy it is, but getting onto the property ladder... it definitely wasn't easy, but it was easier than what I thought.
On the construction sites I was building for the company, but then at the tail end, I'd see people coming in and moving in and then I'd think about 'where are all these rich people coming from?'. So I'd see like, three or four, at the time, they were probably $400,000 apartments. I didn't know much about property investing at the time, and the banks and lending and all that stuff. And I just think people would come here with a $400,000 cheque, pick up their keys and move into them.
IT WAS HIS FATHER WHO PUSHED HIM TO INVEST AS A YOUNG MAN.
And I’d go, like, 'how many of these sorts of people are there? I don't know these sort of people. Where are they coming from?'. It wasn't until I got into it myself, like a few years out from school, where the property I was talking about came up for sale in our street. And my father said, 'I think you should get into property. You know how to build and I guess the next natural step is, it's a good way to invest some money'.
And I said 'Yeah, Dad, but how do I do it? I don't have $500,000'. And he goes, 'What do you mean?' And I said, 'I want to buy it, but how do I get into it?'. He goes 'No, no, no, no, no, here's what you do'. At the time, the banks I think were lending 90% so you needed a 10% deposit. We happened to know the people, so we kind of structured the deposit until settlement, and got 90% from the bank. And so that whole journey was like, 'Hang on, I could get a $500,000 home with $50,000'.
THERE ARE SO MANY RESOURCES AVAILABLE TO HELP YOU INVEST.
And even that $50,000, the way I got it was a little bit of saving, and then talking to the vendor about the structured way to come up with that $50,000 at the time. So I got a little bit of help from Dad and the plan with the vendor, a little bit of savings, came up with the $50,000. But I guess why it became an 'aha' moment is because actually there's so many resources around that actually want you to invest and help you to invest.
So I'd be there sitting, before this time I'd be sitting there or I'd be driving past the for sale sign, $600,000. That's nice, but how do I get there? Like I'm gonna have to wait to earn $600,000? And how are people doing it daily? And once I got into that process and then worked out that there was a $50,000 investment and then the bank came up with the rest... the big question mark, in my mind for the property development industry was 'How widespread is it? How many people can come up with these $300,000 and $400,000 cheques?'.
So then going through my experience and then working out 'Well hang on, these $300,000 or $400,000 apartments actually really only cost people maybe $30,000 and the rest were relying on banks or other ways of getting funds'. And so I kind of said 'Well hang on, this property space, it's for everyone then'. So experiencing that journey firsthand really was a real standout moment and a real eye opener and a door opener for the industry in my head.
Tyrone Shum 14:22
Does that mean then you go 'wow, instead of just buying one of these properties, I could buy, say, ten of these properties'?
Fayad Fayad 14:26
I actually developed that property into a duplex. It sat there for a little bit, earned some rent, got a DA on it, went back to the bank, got a bit more money, started building. And me with my background in building, I did a bit of it myself. So kind of helped with the costs there. It's my first investment and an investment I still have today.
Tyrone Shum 15:19
So I'm assuming that you also spend quite a bit of time as well looking at investing in properties, or do you mostly focus on property development at this point in time?
Fayad Fayad 15:26
I'm a bit of both. So at the moment, we deal with real estate agents in the property development space, so we get offered a lot of development sites for sale. So in those conversations, you actually come across some good investments, whether that be a newly built or completed office tower that's come onto the market. So although we're predominantly property development, and turning a piece of land into finished apartments for the end user, we do do our own investments. As a by the by I guess, like in the actual process of property development, you get offered opportunities to become a property investor as well.
Coming up after the break, we learn about the mentor who inspired Fayad’s vision.
So I guess a good balance between my father and him was that he was very pushing the boundaries, which was good for the end user.
Fayad reveals his plans for the future of the company.
We've spoken to a lot of hotel operators in the past that are wanting to, as I mentioned earlier, potentially rent our buildings.
He shares the best advice he could give to young investors and developers.
That's one thing that I think I've only really embraced in the last couple of years. And if I'd done it earlier, I think it'd be a lot better.
And that’s next. I’m Tyrone Shum and you’re listening to Property Investory.
<insert money partner advert>
Growing up around the property construction industry, Fayad learned alot from his father who helped him to get onto the property ladder. But aside from that, who else did he turn to as a mentor?
Fayad Fayad 17:06
I'd like to say my late uncle, he was a great mentor in my early days. He passed away 10 years ago now. So he was very inspirational and, I guess, a life coach growing up. So he was the guy who's very young, so it's kind of like a big brother sort of model. So he was my mentor, he was in the property business, in the company with my father as well. So that little bit younger, closer to my age. And I guess we had similar interests in property and in construction. I'd like to say where I am today, his pathway kind of led me to where I am today, following his path. So yeah.
Tyrone Shum 18:11
So the reason why he also inspired you and was like a mentor to you was because he also accomplished what you have wanted to achieve as well?
Fayad Fayad 18:21
Yeah, from a business sense, I guess he always aspired to build great properties. So he would never skimp on design or quality or finishes. That's from a construction sense. He put everything at his building centre, so often have conversations with cost effectiveness or maintaining the budget, but from his sense is that no, this building, I need to build it as if I was living in it. And I want to build as if it's my home.
HIS FATHER AND UNCLE BALANCED EACH OTHER OUT IN A BUSINESS SENSE.
So I guess a good balance between my father and him was that he was very pushing the boundaries, which was good for the end user. But from a business sense, my father was always there to kind of keep it a little bit balanced. That was a good blend of two. And my style is more like him in that sense. So he actually allowed me to think the way I think now, which is that property development and the delivery of construction projects isn't... the success is based on the profitability of it.
But at the end of the day, there is some room to move to make sure that the end product isn't just about spreadsheets and numbers and a page, it's actually putting out a building that you're proud of and that your end user could always thank you for, that they can enjoy living in, rather than just saying, 'Okay, well, thanks for putting a roof over our head' and that's it. We'd like them to actually enjoy and be proud of the building that they're in.
Tyrone Shum 20:10
Fayad shares the differences between the residential units they’ve built in the past compared to what they are building for the future.
Fayad Fayad 20:43
The nature of our buildings now are very, I guess, mixed use in that they could be... again, you'd have retail spaces at the bottom, you'd have a few levels of office space, and then you have your residential above. So you could kind of live in that whole complex, whether you need to get groceries down at the stores downstairs, work in the upper levels, and then live right at the top of the tower.
And I guess, one thing we want to keep in mind is that we want people one, not only people will be sure they're looking for the best price at the time, but people are willing to pay that little bit more just to have that best to live in the best building in the street or the best building in the suburb. So there is that.
BUYERS ARE WILLING TO SPEND MORE TO BE PART OF THE STORY OF AN ELLERSON DEVELOPMENT.
And then what I find that makes your job more, I guess, fun, more interesting too, to be able to put something up that you're proud of. And then there's also buyers coming on board that are willing to spend that little bit more, just to be part of that tower, that story. And it's the way the whole building operates. You can't charge more just because the building looks better. That's the way the whole thing works.
You know, I mean, I often get asked— sometimes seriously, or as a joke— people ask me, 'are you an architect or a developer?'. I'm definitely not an architect. But I like to have that vision. A typical developer wouldn't be more focused on some way a building looks. It's more about the waiting. The building performs in terms of profitability and all that. Whereas I'm a blend of both, I'd like to think. I probably competed with myself that time.
Fayad discusses further his mindset and motivation.
Fayad Fayad 24:07
I love my documentaries. And I'm big on listening to podcasts. The one that gets me up and going every morning is, I listen to the GaryVee Experience every morning. And whenever I can, if I'm driving to sites, it's always on in my car. And that really just breaks things down and it just cuts out a lot of smoke and mirrors. It just really makes operating business a lot more practical.
Tyrone Shum 24:57
Gary's awesome. He's just one of a kind. I've met him once and speaking to him, he’s so down to earth and genuine and he just has that kind of inspirational part about him. And when he gets up on stage, man, he gets the crowd fired up.
Fayad Fayad 25:15
And he's so, so genuine. So authentic. I've met him a couple times face to face and he's very humble and very interested in what you're doing, rather than just showing that he's interested. He's really interested.
He reveals the advice which completely changed his mindset and fast tracked his success.
Fayad Fayad 26.02
The best piece of advice I read once is from Richard Branson, where he would explain, and he'd been through it in the past, that if you're presented with an opportunity, and although you don't have all your ducks in order to take on that opportunity, but it's an opportunity that you want to get involved in, you should just take it and then work out how to work your way through it, not to turn it back, as it may never come back to you, the opportunity.
YOU’LL NEVER BE TRULY READY.
So I guess, if it's an opportunity that you're looking for, and you said, 'Well, I might not be that ready for it, come back to me in a few years time, and when I've built this, and I've ticked that box, and I've done this course, and I've done that'. I guess that probably holds you back. If you're getting everything perfect, one, the opportunity may never come back to you again or you get into a point where you're continuously making it perfect, and you never actually get the job done.
So I guess that's one real big piece of advice that stuck with me in establishing Ellerson Properties. If it were up to me, and if it was about getting all my boxes ticked, and everything set up, Ellerson Property wouldn't exist until probably another 10 or 15 years time. But it's more 'opportunity came, let's do it. Let's get it done, and then work out how to do it'.
A big part of working out how to get things done is the teamwork around us, that's helped us to get there. And they've appreciated the fact that although we know how to build, we know how to develop property, but setting up our own business? That's something new. And that's where their support is, and they appreciate we're in that space at the moment. And they're helping us along. So it's a good team.
Drawing on the advice from Richard Branson, Fayad thinks about what he would tell his younger self if he could go back in time.
Fayad Fayad 29:10
You don't need to make sure everything is perfect, and have everything 100, if not 110% right, before you go and embark on something. If it's almost there, get it. Just grab it, do it and then it'll work itself out. That's one thing that I think I've only really embraced in the last couple of years. And if I'd done it earlier, I think it'd be a lot better.
I ask Fayad where he sees himself and the company in five years time.
Fayad Fayad 29:53
The vision that I have and God willing we get there is, I like to see pretty much what we do at the moment, but on a larger scale. So right now we have X amount of projects under our management, I'd like to see a combination of family projects growing. And also having third party developers who don't quite have the functionality of developing a building, they may just be landowners coming on board, coming on our journey and providing that service for them.
So I guess one, an expansion of what we're doing now, two, having some more landowners coming in on the journey, enjoying our service, so we can develop their buildings. And three, like I mentioned earlier, I'd really like to get into hotel space. So I know five years may be a bit too early, but maybe 10 years.
Tyrone Shum 31:01
10 years sounds like a good timeframe. What would it take to actually build a hotel? I've never delved into that space to have a look. But what actually do you need?
Fayad Fayad 31:11
I think the building side, we've got that covered. It's more about the operational and making sure that the numbers stack up to get the right mix, where to put the hotel, how many beds you need. We've spoken to a lot of hotel operators in the past that are wanting to, as I mentioned earlier, potentially rent our buildings. So we build the shell for them, they come in with their builders, they'll fit out to make it look like a hotel, and then they'll operate it.
FAYAD HAS BIG PLANS FOR THE FUTURE.
So in talking with them, there's a lot of things that I couldn't quite understand. I understand how to build the thing for them, and how to sell the structure to them. But what makes their business profitable? That's something that I'd like to spend the next few years trying to understand. And then I can work out, if I've got that sorted, can I then go and delve into that side of things as well.
Tyrone Shum 32:17
It's a completely different world out there.
Fayad Fayad 32:18
It is different, it's totally different. It's a different role. Like I've mentioned before, I don't want to pretend I know it just because I've built a couple of structures before and had hotel operators in and around me. I don't pretend that I'm a hotel operator. I have built hotels, but I'd like to know the point two and point three of that journey I was explaining earlier, before I set foot into that. That's definitely on my radar.
So how much—if any—of his success is determined by luck?
Fayad Fayad 33:08
I think luck is a funny word in property development. Some people say you're lucky that your apartment doubled in price in five years, or you're lucky that you got a good deal on your apartment. But that'd be put down skill, as well as in buying at the right time, knowing the market, working out what's about to boom, what train station's just about to be built. So you know to buy an apartment there.
So, it depends on the way you look at it in property. People who don't acknowledge that you need to know a few things or be smart about the property space will call it luck. Because it's very hard to differentiate. It's not like you can prove why your apartment or your home increased in value. You can't prove it. But you just knew it was the right time to buy before it went up in price.
LUCK DOESN'T PLAY MUCH OF A PART.
So I guess because you can't prove it, someone might say well, it's luck. And you kind of have to just shrug it and say it has to be luck, because you can't really explain it. And I guess that's what I've found. A lot of people in the space, they either talk about 'How did you know that was going to happen in that area to buy that parcel of land?'. Or do you get other people who say 'You're so lucky that you bought that land where it happened to be a train station or a train or a light rail stop is going to happen right at your doorstep'. So it depends how you look at it.
Tyrone Shum 35:11
Yeah, I think it's more the how and preparation and knowledge and skill to be able to find all that, isn't it. You've got that knowledge to be able to get into it.
Fayad Fayad 35:22
Where luck comes into it is I guess, meeting people and being at the right place at the right time. That's what luck is. Not so much the processes or acquisition, it's more the networking side of things. So there's so many people I've met out of pure coincidence, I was just lucky to be at this function where I met this guy, I'm still doing business with him 10 years down the line. So I guess that's where luck comes into it, from meeting people. But then from that point, it becomes a skillset. What do you do with that introduction?
Thank you to Fayad Fayad, our guest on this episode of Property Investory.