Starting Small in Property Development

Sunday Session: In the Beginning - The Journey of Steve Maroun

Estimated read time: 1:20

Summary

Join Rob Flux in another Sunday Session as he chats with Steve Maroun about his journey in the property development world. They explore the challenges and successes, starting from Steve’s first deal—a substantial 24 apartment project amidst financial adversity. Steve shares his learnings about mentors, resilience, and the business of development, giving insight into navigating big risks and rewards in property development. Reflecting on the importance of beginning with smaller, manageable projects, Steve emphasizes learning from every experience to grow and thrive in the industry.

Highlights

Steve started his property journey with a bold 24 apartment project. 🏗️
His father's past experiences with financial adversities during the GFC provided invaluable insights. 💡
The struggle of learning finance dynamics was a pivotal part of Steve's growth in the industry. 🔑
Steve emphasized the importance of having mentors and learning from others' mistakes. 🧑‍🏫
Starting small in property development helps mitigate risks and build necessary skills. 🧱

Key Takeaways

Everyone starts with their 'deal number one' and it's okay if it's not perfect. 🚀
Mentors are invaluable; they help you avoid common mistakes and accelerate your success. 👨‍🏫
Resilience and adaptability are crucial in property development. 🛠️
Starting with smaller projects can help mitigate risks and facilitate learning. 🧩
In property development, learning from mistakes builds stronger foundations for future success. 🔍

Overview

Steve Maroun shares his journey from a complete novice to becoming an accomplished property developer. His story begins with a challenging first project involving 24 apartments, a bold leap that taught him invaluable lessons in resilience, financing, and the industry's realities. Steve's experience underlines the importance of being prepared to face unexpected adversities and learning from every bump along the road.

Throughout the discussion, Rob Flux and Steve dive into the benefits and pitfalls of being a Builder Developer. They reflect on the complexities of managing construction while also emphasizing the advantage it provides in understanding the development process more deeply. Steve opens up about the crucial role of mentors and how his father's experiences shaped his path, offering insights into the practical and emotional elements involved in property development.

Highlighting key takeaways, Steve advises beginners in property development to start small, ensuring they navigate the industry with manageable risks. He stresses the importance of learning from both personal and others' mistakes, using them as stepping stones toward success. With good mentorship and a knack for problem-solving, Steve encourages newcomers to take the plunge into property development thoughtfully and confidently.

Chapters

00:00 - 01:00: Introduction and Welcome The chapter titled 'Introduction and Welcome' begins with Rob Flux introducing himself, greeting his audience, and setting the stage for the session. It's a 'Sunday Session,' indicating a casual or regular talk that Rob conducts. This particular session is noted as being special, though the details of why it is special are not included in the transcript snippet. The background music suggests a welcoming ambiance, drawing listeners in for an engaging discussion. The content likely serves as an opening to a broader topic that Rob will explore in this session.
01:00 - 02:00: Lanevick Overview The chapter titled 'Lanevick Overview' introduces a concept called 'In The Beginning,' which aims to motivate and inspire by taking successful property developers and investors back to their first deal, emphasizing that everyone starts somewhere. The chapter sets up a discussion with Steve Maroun from Lanevick as a special guest to elaborate on these experiences and insights for the audience.
03:00 - 05:00: Steve Maroun's Personal Journey This chapter covers Steve Maroun's personal journey, beginning with a reflection on a past event at the Urban Developer Industry Leader Awards. Despite not winning any awards, the event was remembered positively with good food, drinks, and camaraderie among nominees.
07:00 - 13:00: First Property Deal & Challenges In this chapter titled 'First Property Deal & Challenges', the speaker introduces Lanevick, a boutique family business specializing in property development and construction. With over 2,000 homes constructed and more than 30 years of experience, Lanevick operates mainly on the Eastern Seaboard. The conversation highlights the significant achievements of Lanevick and sets the stage for discussing their first property deal and the challenges faced.
14:00 - 18:00: Construction During Covid-19 The chapter discusses the evolution of a construction business in Sydney, which initially focused on medium to high-density projects and pivoted to the luxury residential space following the Covid-19 pandemic. This shift marks a return to the original focus of the founder, the speaker's father, who started the business over 30 years ago.
18:00 - 23:00: Transition to Smaller Deals The chapter titled 'Transition to Smaller Deals' narrates the journey of an immigrant who arrived in a new country in the mid-1980s with nothing but the shirt on his back and no understanding of the local language. To survive, he entered a trade, specifically cement rendering, and gradually built his business. About 10 to 15 years after his arrival, significant business developments took place.
27:00 - 34:00: Lessons and Mentor Importance The chapter discusses the journey of two brothers who ventured into property development during the boom years of the late 90s. They experienced significant success until the global financial crisis wiped out nearly everything they had, except their family house. This period coincided with the narrator finishing secondary school and marks the beginning of their own journey with Lanevick around 2013-2014. The chapter emphasizes the transition period the narrator went through before fully engaging with the family business, highlighting the importance of lessons learned and mentorship.
39:00 - 43:00: Challenges and Overcoming Adversity In this chapter titled 'Challenges and Overcoming Adversity,' the speaker shares a personal journey motivated by the desire for financial success due to past financial struggles. While academically successful, the speaker was unsure of their future path after secondary school, knowing only the desire to enter the business world to make money. The chapter highlights the impact of financial challenges during upbringing as a driving force in the speaker's ambition.
53:00 - 63:00: Personal Development & Reflection The chapter titled 'Personal Development & Reflection' describes a pivotal moment in the author's life when they transitioned from pursuing a degree in law to starting a property maintenance company. Despite doing well in school and enrolling in a law degree, the author quickly realized that they did not want to spend four years preparing for a career as a solicitor. Instead, they leveraged handyman skills learned during holidays and weekends to embark on a different career path, illustrating themes of self-reflection and proactive career planning.
71:00 - 80:00: Advice for Aspiring Developers This chapter provides advice for aspiring developers by sharing a personal story. The speaker describes starting as a one-man business, intending to handle all tasks, including finding help when needed. To begin building their network, they printed a list of 100 local real estate businesses and started door-knocking. The experience necessitated growing a beard and using beard oil, symbolizing a commitment to the new role. After persistent efforts, they succeeded when a woman named Olga gave them their first opportunity in maintenance work, marking the beginning of their journey.
81:00 - 83:00: Conclusion The conclusion chapter summarizes the journey of someone who started with small property maintenance jobs, such as changing a fence paling, and gradually progressed to more extensive renovations like bathrooms and kitchens. Over the course of three years, this person balanced studying with running a successful property maintenance company. Ultimately, their work led to securing a government contract for inspecting social housing, marking a significant milestone and opportunity.

Sunday Session: In the Beginning - The Journey of Steve Maroun Transcription

00:00 - 00:30 [Music] Hi, folks! It's Rob Flux here with another Sunday Session and today is a very special
00:30 - 01:00 one. We don't do these very often but it's called In The Beginning. It is following the journey of mega successful Property Developers and Property Investors in their space and taking them all the way back to deal number one because it doesn't matter how big and how successful you are, everyone had to start with deal number one. It's a way to motivate and inspire our audience out there to say that doesn't matter where you're starting but you can achieve massive outcomes. Now, today I've got a very special guest, Steve Maroun so from Lanevick. Steve, welcome
01:00 - 01:30 aboard, mate! Rob, thanks very much. Looking forward to it. Thank you, mate. Now, we met at the Urban Developer Industry Awards, Industry Leader Awards going back, close to a year now. I think, maybe, not quite that long but yeah. That's right. We weren't fortunate on the night, however I think we were in the losers camp you and I so.. We were both nominated. That's right. So enjoyed a lovely dinner and some nice drinks and got to clap at a couple of people a little more
01:30 - 02:00 worthy than us on the day. That said, mate. You've done some fantastic things in your world. Now, a lot of people may not have come across Lanevick. So, why don't you give us the two second tour of Lanevick because you're doing some massive things. Over 2,000 homes constructed and 30 plus years experience, mate. Thanks, Rob! Appreciate it. We're a boutique family business. We develop and construct in-house, we're focused predominantly on the Eastern Seaboard
02:00 - 02:30 of Sydney. We've sort of grown from that medium to high density and then had to pivot after Covid and we focus now where we my father originally started 30 plus years ago in that luxury residential space. So, now, you mentioned I guess your father. So, this is a business that he was an immigrant from memory. So, he himself has been somebody who's come
02:30 - 03:00 from nothing. Give me some insight. Correct. Give me some insights into his journey. Yeah. So, his journey started in the mid 80s. Immigrated from overseas with the typical immigrant story just a shirt on their back, no grasp of the language, had to go into a trade. They started cement rendering. He steadily grew his business and about 10 to 15 years after starting here, they, him and his
03:00 - 03:30 brothers, delved into Property Development. They started in the late 90s broad big boom, did quite well for themselves. GFC came, wiped out pretty much everything except family house and that was when I simultaneously culminated with myself finishing secondary school, and the journey of Lanevick started in that 2013-2014 time. So, but, so I guess in that transition period though you didn't go straight into jumping into the family
03:30 - 04:00 business. You yourself went on a little bit of your own journey. Yeah, that's right. That's right. My personal story. So, my personal story was academically I did quite well at school, I didn't know what I wanted to do after finishing secondary school. I just knew that I wanted to be in business and just make money as taboo or as bad that is as it is sound. That was my motivation. I think because of the struggles financially. I think growing up that sort of impacted myself. Anyway,
04:00 - 04:30 I finished school, I went into decided to go into and start a law degree because I did quite well at that in school and remember walking into my first class and fundamentals of law and I was like I do not want to wait four years to you know go down the route of being practicing student solicitor, opening up a firm, and going and doing that. So, I was like what can I do and I picked up some handyman skills and I'd learned some, you know some things in the holidays and the weekends and whatnot. And so, I was like I'll go and start a property maintenance company. My
04:30 - 05:00 value ad is that I'm a one-stop shop and my idea was you know I'll get the work and I'll find someone that can help me you know with the work. And so, I printed out a list of 100 local Real Estates. I went and started door knocking. I had to grow this beard, had to get some good beard oil. And so, I then was fortunate enough. I was fortunate enough. I remember the first lady, her name was Olga, she gave me a shot at the my first probably maintenance
05:00 - 05:30 job. It was a fence, was to change a couple of fence paling and that sort of slowly grew from you know fence paling to painting like painting a room to then renovating a bathroom to renovating a kitchen. And so, over those next 3 years, I was literally going and studying and at the same time had this property maintenance company that was doing quite well for itself. Well then fortunate enough to pick up a government contract. I'm inspecting social housing and then the opportunity
05:30 - 06:00 came up and opportunities don't I guess in hindsight now, it was such a huge opportunity, and at the time it just seemed like it was the right transition. The house came up next door to the family house and we made the decision to go ahead with it and acquire the block of land. And what that acquisition meant was that we were able now to amalgamate my parents' home and put a
06:00 - 06:30 Development Application on that for apartments. And so being clear, this is your first deal, right? It's very unorthodox. It's a.. but it sort of it came from an opportunity that I guess being younger and being a bit naive about what the struggles are seemed right at the time and so we were able.. so that that was the opportunity there. Okay. But at the exact same time,
06:30 - 07:00 while you said you picked up the site next door and you're going to amalgamate that with dad had just gone through his own financial difficulties himself with the GFC. And so, whilst it sounds really good. Hey, I'm teaming up with dad. He's got all this industry experience and sounds like the nice gravy train but in reality dad was in a bit of trouble. It was quite the opposite. That's exactly right. So, if it wasn't for those 3-4 years or those 3 years prior with
07:00 - 07:30 the property maintenance company doing what it was doing, that there would have been you know no chance at all. It would have had to just go traditionally through an auction and it probably you know would have been someone else's story. So but, what happened to dad? Why was dad in difficulty and why was this both an opportunity for you and also I guess an ability? Yeah, great question? So, at the time, after the.. During that GFC period, the banks became.. they start calling in their construction loans and particularly in commercial lending. It's a very I
07:30 - 08:00 guess dog-eat-dog world and so at the time where the GFC started, there was millions of dollars of product on the market that my father and his partners were involved in and where the values who's estimated at 600,000 say for a two-bedroom apartment. All of a sudden the bank's values came in and slashed that at 300,000 and you had to come up with the shortfall to maintain the
08:00 - 08:30 LBR that was required. And so, pretty much they came in overtook, sold them, they made the profits just it was quite as I said quite doggy dog. And so, it pretty much it put my father and his partners back on their journey that they started 20 years earlier. Yeah. So, one I guess force that was outside their control being the GFC has taken away
08:30 - 09:00 20 years of hard work and hard.. Hard work but not but the lessons stayed there and I think this now sort of culminates into the first key takeaway which is mentors. I think you only do learn from mistakes but they don't need to be your own. And so, they that was the key takeaway for me was okay great, you've been through this and we can now takeaway from this,
09:00 - 09:30 what went wrong and we can ensure that this new foundation that we're building it has the.. we can you know avoid it of you know of those risks I guess. Yeah. Now, this particular project, amalgamating the two sides, you said apartments. It wasn't the smallest project on earth, mate. It wasn't at all. And again, it comes back to being I guess young and naive, I mean you sort of I think
09:30 - 10:00 as Developers naturally, you're just optimistic and you don't I think there's a great saying ignorance is bliss, you honestly do not know what you're getting yourself into until you're in the middle of it and you've got no option but to keep going through. And so, as I said for me that was our that was the opportunity that presented itself for myself and you know I just assume that I guess with the experience of the mentor, being my father there along with
10:00 - 10:30 you know my willing to learn and willing to adapt and willing to grow, we'd be able to get through it. And so, it started the process of commissioning the first Surveyor out on site, starting with the Architect, starting with the Environmental Consultant, starting with the all the Engineers and whatnot. It started a 4-year journey which probably should have only been a year journey because you've got you know you've got an asset. You've got a.. you're working
10:30 - 11:00 on a DA, but we were just working and putting it back with Consultants, working covenanting it with Consultants, working.. And so, it started I guess a journey of persistence, sweat, blood and tears, and we were looking back now, it's almost it's extraordinary when I think about how the hell we got through it. But we got through it and got to that point. So, just to put it in perspective because I don't think you've actually mentioned the deal size.
11:00 - 11:30 This was 24 apartments for deal number one, folks. So.. That's right. That's right. It was 24 apartments, four stories over a basement. Yeah. So, with nothing to compare it against I mean as I said it just seemed right. Yeah. So, for everybody out there, that's been listening to me I guess don't do that for deal number one. Exactly. I think step one in your 9 steps
11:30 - 12:00 is start small or start in something that you can manage or you can understand. Yeah. This is the complete opposite. So, maybe we can take away what not to do from from this. Well, I can reassure everyone that you're not the only one who made that mistake. I went too big too early as well. Exactly right. And I went backwards after deal number one, I didn't quite go 24 apartments but I did go 8. Well see, I went from after 24, we went to 2. So,
12:00 - 12:30 and this is the thing is that opportunity comes and goes and you've almost, I'm a big believer in that when it knocks on your door if you do not take it, it's going to go and you don't know when it will come back, and I guess at the time as I said it just seemed bright. It seemed like the you know the stars were aligned and so we decided to go down that route but yeah to delve now into the story of that particular deal over the next as I said four years. Culminated in working on that Development Application, working on that approval.
12:30 - 13:00 We were successful in obtaining the approval and then we looked at ourselves and like okay we now need to get this funded. And funding and finance started to I started to learn about that world and soon I realised it was like it means nothing that you have land, it means nothing that you've got approval. This whole game is finance with I think there's that saying with some houses thrown in the middle, right? And I was like this is just extraordinary like the you know the I guess the
13:00 - 13:30 servicing and leverage and you know interest rates and line fees and application cost, like what is this all like. We just have this vision, we want to deliver it just can't you see the.. and so we have to start thinking creatively and it started an 18-month journey of understanding how are we going to get this thing financed, and we were fortunate enough to
13:30 - 14:00 be able to raise some seed capital. On the back of that seed capital, we were able to finance through a senior, through a big form and we had solved this huge problem and learned so much along that way and positioned us to start construction. Yeah. So, for anyone else out there when you're starting to do deals of this size, residential lending just doesn't work, folks. So, we had to go through residential lending for the acquisition. So we understood that realm, right? However,
14:00 - 14:30 the deal size that you're financing on acquisition versus the construction loan as you know is you need to then go to commercial lending. Like there's no other option. Which means you need to raise equity because commercial lenders want to make sure that there's enough skin in the game that if the event that they don't lose because they'll only ever lend you money the day you prove that you don't need it. Exactly right, mate. They come in at the back end after you've
14:30 - 15:00 you know you've put up all your blood, sweat, and tears. So, we we're positioned right. We're ready to start construction. Our ducks are in order, finance is approved, our DA, our construction certificate is there to go. We break dirt on the first day and the government declares a national pandemic. This is 2019. This is 2020, February 2020
15:00 - 15:30 about what's that five years ago now. And we looked at each other, further the team and we were like, what the hell are we going to do? And my father to his credit and again riding on the experience of your mentors. He was, he had only one answer and the one answer was you've got to put your head down and just do what you can do. You can control only what you can control and everything outside is not
15:30 - 16:00 in your realm. You leave that. Let that be. So we put our head down and it turned out to be the best time ever and probably the last time ever to construct in New South Wales. They opened up Sundays. Labor was at an all-time low. Supply was at an all-time low. We were able to build these apartments in 10 and a half months. From start date which in today's timeline is about an 18-month program. Yeah. People were just people were doing anything they could do to our trades, were just doing anything they could do just get get out of the house. So,
16:00 - 16:30 construction was a critical industry and so we were just rolling and rolling and rolling and you couldn't do anything other than work. And so, we were very fortunate, very fortunate. Now looking in hindsight that we did continue because a lot of of other developers they closed, they closed the fences and they're like we just want to wait and see what's going to happen and so we were very fortunate that we put our head down. We had no other choice to be honest with you and persevere.
16:30 - 17:00 So, push forward and then at the tail end of that I guess the building bonuses came out and all those sorts of things. The government, if you remember, I think Scott Morrison at the time just pumping and stimulating their money maker being the property industry. And so, home builder, first home buyer grants, stamp duty, concessions and our product
17:00 - 17:30 was perfectly placed to pick up all that value add from the government policies. And so these two bedroom two bathroom and one bedroom were just flying out the door. They perfectly placed, perfectly located. We were fortunate enough that we were able to sell these things at the back end at a time a lot quicker than we originally thought. So, I guess and it would I guess located very close to train station. Correct.
17:30 - 18:00 So, this is Western Sydney, Parramatta and so you know generally, the zonings in these areas I mean if it's zoned for high density I think the state government has done their research before you to understand that they want density there. However, at that time being with the amount of immigrants that were coming in overseas, well at that time there was no immigrants coming overseas but given the property being such a
18:00 - 18:30 critical part of our government's revenue, they realised we need to keep this beast alive. And so, they just stimulated it and pushed it up. And that culminated to that 30-40% increases in construction which was led from inflation, and it was the same thing that was happening worldwide. Yeah. Like logistical supply chains were causing all sorts of problems in the construction side. But at the same time because the building boost, well the building grant was there, that was creating I guess a need and a drive that was compensating that from a
18:30 - 19:00 sale perspective. Correct. So, it was demand side incentives and we were as I said again, perfectly placed to benefit from that upside. And the fact that you constructed everything so quickly meant that your exposure to those, I guess building cost increases was much shorter from a duration perspective. So, you didn't.. Right, we honestly again looking
19:00 - 19:30 in hindsight, we jumped on the last train that from from the war zone that we have now. We were literally we started seeing and this now sort of transitions to the next stage which was we sort of I guess comparatively started here and then had to pivot because we started to read in America, the inflation, what it was doing there, the construction rate, what it was doing there and we were doing feasibilities here and we were doing you know real deep analysis here
19:30 - 20:00 and trying to okay what's the next thing you know, what are we going to do next, and you know we've had this 4-5 year journey. And we honestly couldn't find anything that we put down DD on a few sites, lost a bit of money there but I guess we learned from those lessons and we decided that we were going to get out of investment product in Sydney and revert back to actually where my father actually started which was building luxury boutique in Russell
20:00 - 20:30 Lea. And so, we then pivoted to starting in triplexes. So, you've gone from 24 down to 2 from deal one to deal two. Exactly right. So maybe, we should tell people what to do. Let's start from deal two and start that journey. Well again, whilst I didn't do 24 my very next deal was a number two as well for most of the reasons that I think you're about to say. So, why did you go back to duplex, mate? Yeah. So, really it was market
20:30 - 21:00 driven but it was also fundamentally I think where the business was at, it was literally at a very early stage and so we had to revert back and build back ground up. There was an opportunity being the apartment, we capitalized on that, we're able to complete the project but it was very sporadic, right, and it was very I guess all over the place you know. I was wearing four, five, six different hats while was wearing you know the same amount of hats and everything was everywhere,
21:00 - 21:30 right, because it was the outcome and the goal was just to complete this project. So, all hands are on deck. When that completed, we then had our brains back about us. We could think you know we were I guess financially we weren't as burdened as we were previously. And so, we had to then go back to square one and build ground up, focus on our systems, focus on our operations, focus on our structures. And that coincided with the market I guess pivoting to more the owner
21:30 - 22:00 occupy space and I guess with the capital that we had at the time, we then I guess started again in duplexes and that started the journey in I think late 2020. We started from you know duplexes, we then found that and it wasn't just duplexes, it was more owner occupied product that was our whole shift. Our shift is you know we want to service owner occupies. And so, from I think we did the three duplexes, we then pivoted into a three
22:00 - 22:30 lot subdivision infill, sorry two, sorry four lot subdivision infill, then a two lot, then we did a.. this is coinciding with our, so we had sort of two channels that we were running. We were running a infill land sub sort of arm and a boutique luxury residential arm. And we started as I said, the two, we did a four loter, then a two loter, then we did a well right now we're doing a 14 loter, and then the top arm, we did duplex-duplex, we then delved into terraces,
22:30 - 23:00 and right now we're doing that sort of one of our flagship projects. Right now is the six terraces in railway and so, we position ourselves in those centres that we know the state government really wanted density. I think, when the labor government came in, they made it quite clear particularly in the state government in New South Wales, they couldn't
23:00 - 23:30 afford or they didn't want to invest anymore to go out. They wanted to go up. And so, we positioned ourselves in those pockets in both arms. Yeah. So, and I guess, for anyone who's been following me for some time, they're the exact same lessons that I'm teaching, is understand where the transport corridors are the growth nodes. That's going to tell you where the density is going to go, and then depending upon the products that you're creating, you're either in the middle of where the density is adjacent to it or or just within a few streets of it. Correct. Most definitely.
23:30 - 24:00 So, we've been, yeah, so that's coincided. You know we've obviously been able to employ, you know options, delayed settlements with early access, I think that's one of the things you teach. We've been able to employ many different I guess property tools to build our pipeline now that we're very proud to have gotten to now I think it's it's 130 or 140 million or something
24:00 - 24:30 like that. And so, that's where I guess we are now as a business. And so, congratulations by the way, because that's mega achievement actually trying to do that, especially considering the short duration that you've actually done. I think you've done just looking at your website 2,000 plus homes in that timeline in some way shape or form. Yeah. So huge achievement, mate. No,
24:30 - 25:00 I appreciate that. Appreciate that. Yeah, look we've been as I said very fortunate to be able to leverage on mentors. I think the biggest return that you can get in this earth is time. Like I think, as you sort of know, when you sort of deal with the financial issues of things, the next, the only thing that becomes important is time and it's like how can I quicken the learning curve so that I can get to say if a mentors learns it in 20 years, I can get there in eight years or
25:00 - 25:30 if mentors learn in 10 years, I can get there in three years. And so, I've really prior like really prioritized learning from you know learning from the mistakes of others or learning from the taking away from others. And so, that was where also personal development and throwing and immersing myself in those that are. It's funny when we're in the midst of a crisis or the midst of a problem, we think we're the only ones that have ever got through it and that there is no one out there that there is someone there is people out there that have been through what
25:30 - 26:00 you've been through and they know how to get through it. Just go out and look for it and don't be scared to ask for help. And so, I think humbling yourself and really sort of understanding that, putting your ego to the side and saying I don't know everything. You know, although I may have runs on the board but there's still where we want to get to as a business, it's still a long way away. And so, we need to continuously be you know reinventing ourselves
26:00 - 26:30 and growing and putting ourselves in the deep end to really be able to I guess fulfill the potential that we've been I guess blessed with. That's one of my day-to-day sort of I guess maxims. The fact that you went back to those smaller deals almost instantly, do you regret having gone for the big deal first go? Like was it I know that you said it was the right opportunity the right time, but I think would have done it differently. Yeah. Look, I definitely look if like looking
26:30 - 27:00 back now, it's funny. I think the money that we made in the apartment project was the same it would have made. It was the same money we actually made as the triplex one and I think it was a lot more, was a lot more easier to take those learnings on a lower scale. Development is incredibly high risk and at any point in time, one minor issue can derail the whole project,
27:00 - 27:30 and so definitely looking in hindsight, I would definitely say if I was starting again, it will definitely be starting in you know much smaller, you know. Let it be a duplex, let it be a triplex, you know a four-pack. I think learning on a smaller scale means that the failings that you make are not critical to the project success. You know one bad project
27:30 - 28:00 or one bad period in time learning, you know looking at my father's experience, looking at many other Developers experience can push you back 20 years, 15-20 years and so. Definitely particularly, if you're starting out and you've built up this nest egg or this investment, you know this investment fund for yourself, you don't want to you know, you don't want to be just I guess aimlessly you know throwing it to the throwing caution to the wind. I understand and I'd agree
28:00 - 28:30 with every bit of that sentiment, mate. So, a slight change here. So, in your instance, I guess dad was a builder and then you've now taken on the building mantle as well. Correct. And have your own builder's license. So, as Builder Developers, do you find that that's an advantage or do you find that that's a disadvantage
28:30 - 29:00 in coming in and assessing deals? See, it's funny you ask that question. You know, ask a bank five-six years ago before Covid and they'll tell you, our lending policies is about half what we'd give to Traditional Developers, right? Because they build Developers, we're viewed as high risk. Today, you ask a bank and they're like we don't want Developers, we want Builder Developers. And so, to answer your question, there is definitely a competitive advantage when you do have that construction in-house. However, at the same time, the downside of that is that you're not able to scale as quickly as a Developer in that realm
29:00 - 29:30 there. So, the benefit as I said is that you're able to absorb more shocks because you're able to have I guess a Developer margin and a Builder's margin. And that also depends how you buy, right? Like this all comes back to how you buy. Traditionally of course, you're going to have Builders margin and the Developers margin but the downside is that you have to spend a lot of time to build the operations in that construction particularly in New South
29:30 - 30:00 Wales right now. The last four years ago, the state government made a renting generation Compliance Construction overhaul in the class 2 which is the apartment, the apartment space. So, right now in construction and I think I've had it discussed this on a few other podcasts with a few other, I think Peter Esho and Mark Bouris. I think I spoke to him about this particular issue is that the regulatory burden right now in construction has created
30:00 - 30:30 an environment where Builders that are just Traditional Builders have just taken a backward step and they're like, we're too old to have to learn all these new systems, to learn all these new ways of you know all this compliance and all this, and it's resulted in an industry that is under that is not not capable of delivering what the government's I guess ambitious target is. But longwinded response to your original question, definitely an advantage but also has it downsides. Yeah. So I guess, the summary side of that is the time and effort to actually
30:30 - 31:00 run and also the I guess the financial resources to keep the construction arm alive are stopping the development arm from scaling. Correct. It's a live beast in itself, right? It requires site supervisor, site foreman, you know contract admin. That's a fully fledged business in its own. And when it's sole focus and purpose is to is to build just for the development arm, all of a sudden your your development decisions and your acquisition decisions are being influenced by your building
31:00 - 31:30 a pipeline because you don't want to you know you need to keep the business running. You need to keep the boys employed. And so, that's where the disadvantage becomes is like all of a sudden you know when I'm competing say with someone like Rob negotiating on a site, I'm maybe thinking a bit more shorter time because I've got you know 6 to 12 months that I've got to fill a pipeline, where for you, you know you're probably like there's 10-20 other of these, like if this doesn't come
31:30 - 32:00 to fruition, you know who cares. And so, they say you know in negotiation, he who's more desperate, loses or something like that. So, that's where the downside is. I could see times where you have to take on a job in order to keep the guys constructed and other times where you don't want to take on a job because the boys are flat out and they just that correct. They don't have the bandwidth and so you don't want the holding costs. Correct. But the benefit, there is that you can potentially add value through a DA and potentially flick, right? Or you can,
32:00 - 32:30 there's many exits at that point in time. And so, I think the bigger downside is that now not everything stacks up and so, it's more difficult to I guess put projects in your pipeline that are profitable that are not just projects that you can put on your website and say this is what I'm doing that they are actually profitable. If you were to you know get a Builder at an arms length contract, if you were to get you know Designers at arms length. So, it's it's
32:30 - 33:00 not as I guess as exciting, not exciting I guess, it's not as good as people may think. Yeah. And mate, with all the deals that you've constructed, I guess in that timeline, so, Lanevick as an organisation's been I guess running for about 8 years. That's right. I guess with dad and his industry experience that's 30 plus. But just under your helm,
33:00 - 33:30 what's been your proudest moment? So, definitely completing the 24 apartments. It was a culmination and a buildup of 4 to 5 years. It was everything. My sole goals and focus at the time was just to complete this project, and it was getting to the top or not I guess the top in my world at that time and completing this project. When we completed construction and we had simultaneously settled on the apartment and just sort of, looking you know at
33:30 - 34:00 my father and just looking at ourselves and looking in the mirror, it was almost this moment of like it was like relief but it was it wasn't what I thought it would be. It was almost like this sad moment. It was like this is what I've been doing for 4 or 5 years you know, like we got here. It's almost like it's a weird, it's weird to put it in words but it was funny,
34:00 - 34:30 like what should have been the most proudest moment which in hindsight is started this period of deep deep I guess wouldn't call it depression but a real downside of like, okay, what do I do next? Like what do I you know it's almost I guess you get to retirement and it's like, okay, what's the next thing? Like, what like there was no you know, there was no thought other than we need to just complete this. We need to complete this. We need to complete this. We need to complete this. And it was almost we got there and it was as I said just did what put in words.
34:30 - 35:00 So, and I guess, for me, personally when I drive past project number one, I have the same pretty similar feelings. Yeah. You drive, for me, it's on a regular driving route that I go past all the time so it's a.. Likewise, likewise, likewise. So, I go to the gym and I, well I don't need to go that route but I take that street to always drive past because it's just like, oh I just wonder you know how it's looking and you know what's going
35:00 - 35:30 on there, and it's just it's sentimental. It is sentimental when you look at it because it's just really I guess personal like in your.. it's your story. It's your story for 5-6 years you know. So, it's I guess that's the great thing of development is that you can see a tangible I guess statue sort to speak of you know of what you've done. Yeah. And I guess, we were chatting I guess before
35:30 - 36:00 coming on air, it's not just Property Development that you're doing but also personal development I guess. And you touched on there, at the end of that project you kind of went well, now what? Correct. What have you done I guess in and around your personal development journey, mate? Yeah. So, it's a good point. I had to look introspectively. I had to really look, you know deep down in myself and sort of ask myself those questions of you know where do
36:00 - 36:30 I want to go in my life? What do I actually want to do? What does that look like? What does that smell like? What is that? And it sort of I'd always been involved in personal development because it was honestly the personal development that helped me or that enabled me to persevere through those really dark times from 18. I think I told you I was introduced to I think Jim Rohn at 18, and you know the Robert Kiyosaki, you know Tony Robbins and we were able to absorb you know the learnings and teachings of these you know very you know incredible people and that helped me persevere. But then,
36:30 - 37:00 when I got to the stage where we had sort of quote-unquote got there, it was a different type of personal development. And it was this process of introspection, looking within and asking myself, where do I actually want to go? What do I want to do? Where do I you know where do I want to live? How do I?.. What's my lifestyle look like? What's my you know what do I want to give back? What I want, what do I want to be known for? So, all these questions started and
37:00 - 37:30 I think over the next 6 months, I started to you know work with you, know a couple of life coaches at the same time as well worked with like a really made a good focus on looking into what others did you know, what did others do when they sort of you know got to that process where they almost lost themselves, and personal development I would say is as one of my most favorite books. It's a James Allen book. It's called "As a man think of." He says, you know,
37:30 - 38:00 the circumstances that you have around you are a result of your thoughts from you know 6 months, 12 months, 18 months ago. Literally, where we are today is a direct result of your thoughts. And your thoughts start from that little thought, when you're you know the alarm's going off and you need to get up and you're like I'm tired but like I need to.. You are completely accountable and responsible for where you are in your life. And it's simple as that. And although, a lot of things
38:00 - 38:30 that happen may not be your fault, they're your responsibility to make sure that you get over them. And so, I think taking accountability and really understanding that you are flying your plane, you are you know in the.. you're in the front seat. If you want to go left, you can go left. You want to go right, you can go right. Do not blame others. Do not look at the economy. Do not look at you know your friend down the road. Do not look who cares. Who cares about that?
38:30 - 39:00 Just look at yourself. Compare yourself to yourself and just beat yourself. Keep beating yourself. That was one of the.. I think I was a very you know very naturally being very competitive. I would compare myself to you know what that guy was doing, what that person was doing, and all these you know social media and whatnot. And it was unrealistic, right? And it wasn't fair, right? Like my 5-year journey, I shouldn't be comparing that against someone's 20-year journey. And so, I realised that this game is for me and I want to and I should be competing
39:00 - 39:30 against myself. And my criteria became I had to be better than my 12-month self every year on year on year again. That became, I almost forgot I almost left everything and I became focused on how can I beat myself. Very motivational inspiring, mate. So, thank you for sharing that. Appreciate it. Along your journey though, I guess you touched on the fact I guess prior to our coming on air that
39:30 - 40:00 it wasn't all beer and skittles, mate. You, I guess, while you were going through I guess coming through the Covid side of things and trying to help dad through his project and that sort of thing. At one point, you pretty much got down to zero bank. Yeah. It was literally underwater. As I said, I think I remember I was working
40:00 - 40:30 regionally and I pulled up at a Petrol station and filled up fuel, and I remember going to tap my card and it declined once, and then picked up the other card tapped it and it declined as well. I was like coz normally you know had two accounts and looked at my bank account, I was like, this is you know, there was I think, there was an ATO payment or something that had been taken out. And I was looking at the gentleman there and I was looking down. I'm like, it was the first
40:30 - 41:00 time in my life where I was like to myself like, "what the hell am I going to do?" Like you know, like I'm not going to run away and I'm not going to. I'm like, "what the hell am I going to do?" And so, I went back to my car and I scavenged I think like $50 or it was half of what I was earning. And I literally told the general, I'm like, look, here's my license, take my details, like you know like I honestly for some reason don't have this here but you know just take my details. And, but the point is that,
41:00 - 41:30 it was the first time where I sort of asked myself where I questioned myself, I was like, am I doing the right thing? Like the journey that I'm going on like, is this gonna.. not is it going to be worth it but I'm like is this part like is this normal? Like, is this like when you're by yourself and you're alone not lonely but I guess when you're in a quest to really you know achieve an outcome, you're almost on this journey by yourself. And so, you
41:30 - 42:00 don't have anyone to sort of speak to at that time that can understand you or that can. And so, I really question myself. I really question myself of is this you know is this the right path and so. Definitely, there's.. it's a hole you know there's a hole dark world of I guess you know thoughts and emotions and feelings and you know stories made of people you know. You know not doing right I guess by you or you sort of putting yourself in positions
42:00 - 42:30 to be taken advantage of and there's a whole multitude of stories and so, I think the way that I look at it is that these are the learnings that are required for you to build the skin. That's required to deliver the outcome that you want to set out to achieve. And so, it's part of the journey. It's part of the journey. Just take it on, learn from it. There's no issue making a mistake. Just don't make the same mistake twice. Yeah. That's my mantra. And so, I don't you know originally on because I was so competitive. I'll be like,
42:30 - 43:00 how did he you know how did I lose or how did I?.. Now it's like, it's okay if you made the mistake, great! Do not **** make that mistake again. Do not make that, if you make that again then you can be angry at yourself. And so, that's definitely to answer your question. There's very dark times. There's it's not.. It's very difficult in those early stages. And hence, self-belief in yourself. Correct. And
43:00 - 43:30 your ability, the strength in to persevere and that sort of thing is super important. Rob, mate, it's an absolute.. It's a prerequisite you know, resilience. It's a prerequisite in this game. Resilience, adaptability, resourcefulness. It's just a prerequisite. Like, if you're not there, life will life will force experiences on you to get you there. And if you do not persevere through it, you won't get there. You won't get there. So, you know I think you know the world we live in has a great way of
43:30 - 44:00 bringing upon you experiences that are going to get you to where you want to go if you truly believe that you want to get there. So, I think it's a just get through it. The other side you know the grass is greener, I guess on the other side but yeah, particularly, it's.. there are some very dark times. Thank you, mate. So, I guess with that mate, really good segway into probably my final question here. What are the biggest lessons
44:00 - 44:30 that you would like to impart on our audience? Starting out, if they've not done their very first deal. If they're thinking is Property Development the thing for them. Perhaps, they're in their first deal and they're halfway through and struggling. What motivation can you give them to get through? Yeah. Great question! And I spoke to you I think about this backstage. I think, the one key takeaway is mentors. It's just invaluable.
44:30 - 45:00 It is invaluable what you can get from a mentor's experience. A mentor that's been and done this 10 years or 10, 20, 30 years and you can literally pay a monetary fee or.. And this is not an advertisement. It's just funny because you know you have a Property Development Network and whatnot but it is just you know unparalleled the value that you get back from a mentor. And for me, that was my father early on, right? How are you able to jump into 24 apartments? You know you're a first, you're a newbie,
45:00 - 45:30 you're this, you're that. Leveraging on the experience of the mentor put me in a position where I was able to ask the questions and position myself in a way that I was able to be apprehensive of the challenges that were going to come up as they were coming up and come up with the solutions to get there. So, mentors is absolutely invaluable. And the second thing, I think is confidence you know and backing yourself. I think, particularly when you're starting out,
45:30 - 46:00 you're always double checking, triple checking you know paralysis over analysis. I think, there's a point where you have to understand and you're like I may not have every question mark tip, but if I do not like the more I delay myself jumping into this first deal, the longer I'm going to be delaying the learnings and the teachings that I'm going to naturally learn from any first deal. You are never ever.. particularly in the first deal, you are never ever going to be able to have every single base cover. If you were,
46:00 - 46:30 then you'd be an experienced Developer. So, if the number you know if it looks right and I guess you've done your obviously your high level DD and it's not you're not just buying a you know a site that has a tip underneath it, or something like that like. But if it you know if the numbers are right and you know the site feels right, just get into it. Just get into it. You will find a way. You will find a way and you will be so much better off of doing a deal where
46:30 - 47:00 you only made say 15%. Right? But compare that to the to the person that didn't do the deal and waited another two years and then made 25% on his deal, but you're two years ahead of the journey now. By the time that gentleman gets to that 25%, you're doing now deals that are 25- 30% because your experience is. So I think, throw yourself in to start the skill building. The skills is what you want. You don't.. the money is an outcome of that site but the skills is what
47:00 - 47:30 pays you back. Does that skills pay the bills or it is so true that the skills that you that you're going to acquire from just starting that deal, the relationships you're going to get, the you know the network you're going to create, you know you're only going to solve these problems when they're.. when your money's on the line and when you're you know you're stuck in the deal. And so, that's why I would say, back yourself, just back yourself, get in there and just you know just start. Just start. So, I agree with both of those wholeheartedly,
47:30 - 48:00 mate. The one thing that I would say is back yourself with a mentor sitting over so you're not not jumping. That's why mentor was number one. Mentor was number one. And then, the second was back yourself. Yeah, I guess because sometimes we cannot know what we don't know when we get into a deal. So, really important that you've got someone else sanity checking your deal. Steve, mate, it has been amazing with you sharing your journey. I greatly appreciate you doing that and looking forward to catching up with you personally,
48:00 - 48:30 I guess and sharing a few war stories over a beverage or two, mate. No, I appreciate it, Rob. And as I said, I really hope the audience can you know take value away from that. And again, just touching on that last point, just get into it you know, get into it you know there's never going to be a perfect time. Just start. Yeah, very good. With that said mate, just for everyone else out there who's watching, not only do we run these Sunday Sessions and share these sorts of stories,
48:30 - 49:00 but we also run events all the way around the country. We run them physical and virtual so, you can turn up physically in Brisbane, Sydney, Melbourne or Adelaide. And you can hear real stories of real deals where people just like Steve, are actually sharing their journey. Plus, you're getting to hear from Industry Experts and also share in your masterminding and share your problems and your issues and challenges as you go. So, if you're wanting to see us, we would love to see you at one of those upcoming events. Steve, it's been an absolute pleasure,
49:00 - 49:30 mate, and we'll see you on the flip side. Thanks, Rob! See you guys. Bye! [Music]