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Louise Fitzgerald-Baker Transcript

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Louise Fitzgerald-Baker:
I said, “I want to buy a couple of houses and knock them down and build some townhouses.” and he said, “Well what’s you know what’s the worst that can happen?” And I said, “Well you know, the worst is we lose everything, everything the house all our life savings, everything.”

Tyrone Shum:
This is Property Investory where we talk to successful property investors to find out more about their stories, mindset and strategies.

I’m Tyrone Shum and in this episode we’re speaking with Louise Fitzgerald-Baker author of the Pink Hard Hats. As a property developer and entrepreneur, she goes into detail about the life changing occurrences that led her to property, the importance of removing emotion from investing and how she was able to go from property investor to property developer.

Louise Fitzgerald Baker:
My name is Louise Fitzgerald-Baker and I’m from the Pink Hard Hats and I’m a property investor, real estate agent and property developer and general entrepreneur, I’ve written books and speak and so I’ve done a few things around and with property throughout my career so far.

Tyrone Shum:
With a busy daily schedule, Fitzgerald-Baker shares that much of her work occurs in a creative space, that she deliberately integrated into her home…

Louise Fitzgerald-Baker:
It’s taken a while to build a life like this, but now I have built an office beside my house as part of the house and so once I go to work, I am in a beautiful room which looks out over the water, on a sofa beside me. And what I do on a daily basis is I do a lot of writing, coaching, speaking, managing properties and researching and so some of that involves meeting new people and some of that involves being in my own space but it’s fairly deliberately orchestrated to have this. It hasn’t been the way my career has been all my life. You know there’s been times I’ve had a team of people, but in this chapter this is what I have now.

Tyrone Shum:
She adds that it is because of this unique and relaxing work environment that she’s been able to mould her work around her life…

Louise Fitzgerald-Baker:
It’s been an opportunity to create the world I wanted to work within. So I work around my life rather than you know live around my work. And it’s been really deliberate. So the space I work with, the views that I’ve got or the music that I’m listening to, that cat sleeping beside me, the door behind me you know. I’ve got the Wallabies jumping in front of the view out the to the landscape and so it’s really, really great. It’s a space that I can be creative in and I can carefully orchestrate the life so I’m designing.

Tyrone Shum:
Despite her current success, Fitzgerald-Baker had to face a devastating loss at a young age…

Louise Fitzgerald-Baker:
I’m the youngest of five children. I grew up in Melbourne and my life changed dramatically at the age of two.

So my father walked out the door and unfortunately never returned. He was killed in a car accident leaving my mother widowed with five kids under 12 to look after. And for a little person I guess you just realise when I walked out and then quite shortly after it my mother was faced with a very similar dilemma. So in her case she had a serious choice to make without any insurance. She was financially destitute when he passed away so suddenly he was only 40 and she was 38 and she’d never written a check in her life. So on top of having to deal with the grief, she was faced with with her terrible choice that no one should really have to make. And that was, “Mary you have three options, you either go on the pension and frankly who would blame you, you abort – you know essentially stop everything. You know her husband had three menswear shops and a half built house in middle Brighton in Victoria in a really nice suburb and they sort of said look just stop everything sell out and and and possibly even separate the kids to give yourself a fighting chance to be able to bring them up.” And she decided 12 hours later to drive to work and take over his family business, having never written a check in her life and so for a little person, for all of us our lives shifted very, very dramatically. And you know we got to see I guess a front row view of a woman faced with a circumstance none of us should ever ever want to be. But how she recovered her position and grew through that was an amazing testimony. And so that was really I guess my beginning. I’m the youngest of those kids with three brothers and a twin sister. And part of that was her negotiation of both life and the role that money played in that.

Tyrone Shum:
Fitzgerald-Baker explains that because of this loss, much of her position and mindset in life arose from her upbringing and her mother’s tenacity and hard work…

Louise Fitzgerald-Baker:
I think all your memories are really just of that one key person who’s pivotal but Mum will go to work at about 630 morning and then she’d be home that 6 at night and we suddenly had a house that changed in regards to the people involved in it. So she was a stay at home Catholic housewife, before, she now became a working mum and literally overnight. And my aunt and uncle and grandparents were involved in helping care for us. The boys about couple of years later were sent to boarding school. And so it was just Julie and I. And so it was I guess you know nothing else as you grow up and into that. But as the years went on we continued to see a working mum a very hardworking mum and she learned business the hard way. In the 70s there weren’t that many women in business, especially in menswear. She got ripped off left, right and centre and so it was really a school of hard knocks but it didn’t get her down you know? Her attitude, mindset and her ability to grow through it was just profound. I think she passed that on to all of the kids. You know it’s no accident that the majority of the children turned out to be self-made millionaires and very, very entrepreneurial. Each of us in very different ways.

So and I think that a lot of what she passed along to us was really the idea that it’s not what happens to you it is really what you do with life.

Tyrone Shum:
And that it was through her mother’s experience that she and her siblings were able to get the outlook they have in life now…

Louise Fitzgerald-Baker:
My brothers or teenagers six years older and they all went to finish year 12 and were required to. And in the school holidays we’d all have roles in the family businesses. She went from menswear to test lows and property was also something she became involved with passively as an investor and it was just expected that you know as she did, we would all grow up and buy multiple properties as a means of an underpinning security for our lives. And I think she really did pass on a sense to us that oh my gosh you know money can’t protect you but it can insulate you. And I know myself that had she had a financial cushioning then her choices would have been different in the aftermath of my father’s untimely death. So I think for all of us there was a sense that money is not a panacea it can’t solve life’s problems. But it can cushion the fall and certainly stop that downward spiral getting any worse. So we really took that on to see the importance that income can play in a lost recovery when when things don’t go to plan.

Tyrone Shum:
Onto the educational side of things, Fitzgerald-Baker shares how her passion for schooling turned into an opportunity to become involved in marketing, sales and eventually property…

Louise Fitzgerald-Baker:
I was good at school. School loved me and I loved it. I was one of those kids that had kind of a photographic memory and I had a really good time you know I was into the sports and I loved the whole idea of school. I enjoyed it. And then I went on to uni as my twin did so the girls in the family were the first really to go to university. Prior to that it wasn’t such an expectation for that generation before really. But by the time we came along and we were finishing school in the late 80s it was really expected that you’d go on to uni. And not knowing really what I want to do I did a double major in communications and major in marketing it kept my options open and then I went in to market research. Fast moving consumer goods and using brands and buyer behavior to be able to orchestrate and sell products and it was something I really loved. The psychology of sales through the way a product was pitched or presented to the market was fascinating because it involved business marketing and psychology and so I did that for several years before having an opportunity to work in a free trade zone. Australia’s only free trade zone in the Northern Territory with the former vice chancellor of the university. He said put your money where your mouth is. If you’re any good at marketing. Throw his curveball. He threw me an opportunity to work in a free trade zone. That was 22 percent occupied. And my brother who is a marketing manager was to obviously fill those places and within about a year and a half we got it to 98 percent capacity and we became an amazing testimony for free trade zones both in this country and then overseas and then I ended up doing a bit of secondment work in Southeast Asia. I had a great time in Darwin in the 90s and went on to work for the chief minister of the Northern Territory, who is like one of the premiers in one of the other states and while he was presiding over a two billion dollar budget, I got to do work in regards to the research side. So I’ve had a really colorful academic and business experience before taking on the property side and falling into that space many years later.

Tyrone Shum:
It was following her time in the Northern Territory that she began to settle down with family life and the need to generate income creatively, through property.

Louise Fitzgerald-Baker:
After the Northern Territory, I met my husband in the Northern Territory and we ended up coming back to Sydney. He was working on TV news and then we moved to Canberra and then Brisbane. When we got to Brisbane that was where I had – no when we got to Canberra I had children and then once we hit Brisbane that’s when essentially the kids started going to school.

So I always worked while the kids were young. I worked part time in whatever I was doing and I really acquainted myself with the way that I would generate income. I became more imaginative in the way I would let money work for me because suddenly I had these little people that I had to fit my life around. And it was no longer my choice to go leave five days a week and not see them so I had to come up with different ways to generate money so that I could build the lifestyle we were looking to create. But at the same time raise these gorgeous kids.

Tyrone Shum:
With an avid interest in property, a strong influence from her mother and the need for financial security, Fitzgerald-Baker explains that her entrance into the property world had always been somewhat planned…

Louise Fitzgerald-Baker:
I’ve always really had an interest in property because I’ve watched my mother be an investor for many years and a landlady and I had seen that that was really the expectation. Not to just to have your own home of course but to have multiple income streams working for you and in that time property was a means to an end for an income stream. I mean these days and I get onto that a bit late but these days there’s many, many more choices out there that I didn’t have back in say the 80s but as soon as I was able to, say in my 20s, I bought my first house and bought several properties along the way and then just began to build a little portfolio quietly on the side. It became harder to do once we had kids and we were down an income and obviously things became – or I had to become a little more cumbersome of income and and holding these properties and some of them were positively geared but not by much and so we had to think differently. And there was one point at which my husband who was a closet soldier actually very, very noble but inconvenient. He would often be called to a war all over the world and as much as that was an amazing and generous experience of him to go, it was also fraught with a lot of danger. I remember thinking as much it was financially rewarding for him to leave for four to six months, but that’s not the way I wanted to raise my family and there must be another way. And that’s when I thought I think it’s time that I gave this a shot. By the time I moved to Brisbane I had studied, got my real estate license and had thrown myself into property and was surrounded by property people anyway. But I’ve never really stepped back from investing to developing and till that point when I thought you know what I want to give this a shot myself.

Tyrone Shum:
Okay this is really interesting on time and sort of put the puzzles together because I have a question before I jump into it.

When you said your husband’s a closet soldier who never served before could you sort of elaborate on that first?

Louise Fitzgerald-Baker:
Bit of a joke.

He’s a reservist he’s an Army reservist. So that means I married a reporter and had no idea that this little job on the side where he would occasionally go off and soldier would have been so you know doing his soldiering would have been an interruption to our lives later on. So little did I know that every time there was a conflict across the world he would get invited, not conscripted but invited to participate and disappear and disappear. And sometimes you know in really quite dangerous places where communication would be cut off and so it’s not a lifestyle.

I imagined I’d see myself in, in places where suddenly I’m raising the kids really alone and having to think about the basics of, “What if he doesn’t come back?” and how does that leave me. So I say tongue in cheek closet soldier but essentially it’s not like I married a soldier on an Army base who had the support of a whole base and free dental and health care and all of that to cushion me. I was essentially a mum in the suburbs with a husband that would disappear for months on end in places where he may not ultimately return. And he was a very conscientious participant in that. Just like if you are married to a fireman and it’s Christmas and there are fires across the country, they disappear and that cause is always going to be bigger than them what’s going on at home and that’s what you see, that’s what you become part of whether you realize it or not. But I didn’t really believe that the guy I married was a TV reporter, you know, he would come home every night so I guess I got a little surprised along the way and I thought gosh this is working out a little differently to how I imagined. And one of the compelling components beyond his world view which is very generous and very much big picture and he’s got a real social conscience, was the idea that of course we were remunerated well for him disappearing. So I guess there was a small part of me that went if I could insulate us financially then maybe he would have disappeared quite so much.

Tyrone Shum:
Coming up after the break we will delve into Louise Fitzgerald-Baker’s property development journey…

Louise Fitzgerald-Baker:
He said you’ve got my blessing you know and you really do need your partner to back you on something like that because property development is not for the faint hearted.

Tyrone Shum:
How she grew her portfolio…

Louise Fitzgerald-Baker:
I bought my first house and bought several properties along the way and then just began to build a little portfolio quietly on the side.

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

With the support of her husband and some property knowledge she decided to dive straight into property development…

Louise Fitzgerald-Baker:
That was really where I said to him you know I really want to use this investing, take it to a next level and have a go at developing and he said, “Well what do you want to do?” and I said, “I want to buy a couple of houses and knock them down and build some townhouses.” and he said, “Well what’s you know what’s the worst that can happen?” And I said, “Well you know, the worst is we lose everything, everything the house all our life savings, everything.”

And he said, “Okay.”

He said you’ve got my blessing you know and you really do need your partner to back you on something like that because property development is not for the faint hearted. Property investment, different kettle of fish. You can set and forget, sit on it much like you’d do in shares with you know blue chip shares. You just sit on it and really over the course of time the likelihood that you’re going to really lose a lot of money is unlikely. You know you just buy steady, you do your research, you buy well and you set and forget and then you just manage the numbers all the way through and hopefully with the uplift and capital growth you’re compensated well for it over time. But property development is a whole different kettle of fish. You really, in my experience, a third of developers make excellent, excellent income. A third for all their time, effort, sweat and tears will probably break even and a third will lose money. On varying levels, they will lose. And that’s not the ratios you hear in the world. If you look at property investor magazine everyone’s a winner. But in real life. When you’re out there you see quite differently. It’s not a fool’s game and you have to have the stomach for it.

Tyrone Shum:
Fitzgerald-Baker shares that one of the worst investing moments she’s experienced stemmed not from the outcome of the investment but from the emotional rollercoaster felt by her clients during the buying process…

Louise Fitzgerald-Baker:
There’s been times where you really had the heart in your throat and really I think, one of the stories that comes to mind, is probably more of a lesson than anything else, I was actually buying property for some clients. So I was a buyers agent for them.

I’m not sure and eventually we had scoped the market, they were looking for a house and they had instructed me to buy this particular house for $450 000 at the time and this is not my worst moment but this is I guess just an example of what it can be like for certain people as they get their head around property. And I guess I realised that not everyone has the stomach for it.

Tyrone Shum:
She goes on to state that despite securing the property for her clients at a lower price, the emotional turmoil felt by the latter is what made a successful investing moment the most stressful.

Louise Fitzgerald-Baker:
On this particular occasion we’d done the research. They had recently missed out on a property down the road and suburb. And so the instruction was clear, it was, “Louise, go in, secure the property at $450 thousand and do it today.” And I said, “Look my advice is to you, I don’t think that’s in your best interests. I think you can get it better than that.” And on this particular occasion it was going to auction and I suggested that we go and sit at the auction. So of course we attended the auction and I said, “Look my expectation and hope is that we can get it for you between $420 000 and $430 000.

And on that particular day we went to the auction we bid. We bid to $420 000, it got handed in and the negotiation was with us. And that strategy was fairly deliberate so that we would be the first and only people that they would come to at that point to begin the negotiations post the purchase and on that particular day we ended up securing that property and getting that for them at $420 000 and it was so funny because these people were not with me they were over the phone and I was replaying to them the strategy, which was essentially we’re bidding, we’re bidding to $420 000, we’re stopping, we are now negotiating and we are pausing.

And in that time I hadn’t realized that one of the parties on the other end of the call was vomiting and vomiting with grief and despair and anguish and pain and I remember saying to him at the time we know when his wife is saying you know don’t tell anyone we really weren’t. And later on we had a giggle about it because of course you know they got it 30 under what their instruction was. But I just said remind me to never do property development with you guys, you just have to have the stomach for it.

So some people just don’t have the stomach for all the risk or the appetite for that type of negotiation because sometimes you do have your heart in your throat and I remember on one day on one occasion the same sort of thing on a bigger scale where I was securing my own property and I was standing firm at a price.

And it was an excellent price and the seller ended up standing firmer and basically declined the sale. Basically decided not to sign the contract and it really can come down to he who blinks first. Because it was really good who wants this more and in the case where all the evidence was suggesting that he should have signed this at that price with those terms. He just said no. And sometimes you can’t know what the other party’s doing in a negotiation so there’s just some funny times where you just have your moments where your heart’s in his right and you can’t control who’s on the other end of the phone, or who’s on the other side of the contract, and how they’re going to respond to your position, your bluff or your move.

Tyrone Shum:
It’s almost like a game of poker.

Louise Fitzgerald-Baker:
In fact you know I think so yeah. Kenny Rogers song The Gambler you gotta know when to hold them know and follow them know when to walk away and know when to really use it comes into the guy it comes into the game, because you do need to know when to walk away and when to run. And I’ve had to hold them, fold them and walk away and run in every deal. You have to make a call fairly decisively and say I’m walking away at this point or I’m out and just you know not looking back because you can’t second guess yourself, you have to be clear enough to know your strategy, stick to your strategy and not get emotional about property.

Tyrone Shum:
During her property development journey, Fitzgerald-Baker shares the worst moment she’s experienced and the series of obstacles that led to it…

Louise Fitzgerald-Baker:
I think there’s been a few over the years where things have not necessarily gone to plan. We had one project for instance where the criteria, we just had a series of three things go wrong and I find that you can normally take one or maybe two hits if you’re good but if you get three it can be really tricky and on this one it was actually a small project it should have been straightforward it was a little for pack in an area where it was zoned for development. It was zoned for Lotrimin residential so it should’ve really been straightforward but on this particular occasion we had 50 submitters against us. One guy had a letter box dropped the plans to everyone in the locality and actually door knocked and ended up getting a series of marks against us which was just unprecedented. Actually the law really wasn’t in their favour because it’s not as though we were changing the zoning we were completely compliant in everything we were doing. But that was the first strike where it took time just to go through a process that we hadn’t scoped, envisaged or imagined or even allowed for financially. And even though there was no jeopardy there was no real sense that we wouldn’t get it through. It was just the time and the interruption and then the second thing that happened was when the conditions came through there they were arduous. So council had decided that they were going to increase the compliance on this particular block and what they did was they required a level of engineering that was disproportionate to the size of this development. It had culverts under the ground that you might see in major engineering feats, but on this particular four pack with no particular slope it was completely disproportionate and over scoped and that was the second thing. And we probably hadn’t seen it, we didn’t have the experience as this was early on in my career. We didn’t have the experience to truly understand what engineering compliance on that scale would cost and look like. And the third thing that happened it was a time in Queensland where they decided to change the contributions. So the taxes that you pay went for $15000 a box to $28000 a box.

Tyrone Shum:
While that lengthy development process ended up draining her, she was able to minimise loss and gain experience on how to avoid similar issues for the future.

Louise Fitzgerald-Baker:
We really had a triple whammy on that little, tiny deal. And when you’re doing 20 or 30 or 40, it’s different but when you’re doing four, your margin of error is very small. So on that particular project we could have sustained one or two but as I said three was really quite tricky you know and that was an occasion where we really had to manage our position to get that project done, delivered, sold and just move on.

We really made very little money. It was probably eleven thousand dollars or something but my job really came in the end not losing money. That really became the task because the odds were against us. The market was flat. Our costs had gone up and we were releasing we didn’t have the money we didn’t have the favour of a running market and really the market can be very forgiving. So you could sustain a few hits like that if year in parts of this country where the market was just running at the time and you had the opportunity of capital growth to be able to fall back on, but we had a static market to release to. So the deal then came making sure we and the investors involved didn’t lose anything. Having said that it was years of my life that you get compensated for it.

Louise Fitzgerald-Baker:
You just have to make sure that you’re either playing with money that you are prepared, not wanting but prepared, to potentially lose if you’re gonna go into property development.

Tyrone Shum:
This is Property Investory where we talk to successful property investors to find out more about their stories, mindset and strategies.

I’m Tyrone Shum and in this episode we’re continuing the conversation with property developer Louise Fitzgerald-Baker, where we’ll be delving into her development process, the organisational habits she keeps in place, the important life lessons she’s learnt and how she’s applied that to her property developments.

Despite not being able to narrow down to a particular aha moment, Fitzgerald-Baker shares that following her instincts when building allowed her to realise the beauty of property developing.

Louise Fitzgerald Baker:
I think there was one occasion where we were doing 12 units on a site and I really, as a boutique developer I was very careful in my design phase. I would always – coming from a market research background – I would anticipate trends that were not here yet and build for what was to come and not currently in the market rather than copying what was already there. And on this particular block they had the most beautiful poinciana tree to the front. And I remember and we had the ability and permission to remove it but I remember thinking it would be so beautiful if we kept it. And some of my colleagues were saying, ‘You’re mad! You’re mad!’ you know. ‘You could have really, you could squeeze a few more units on that block and keeping the tree is too sentimental, you’re thinking with your heart not with your head.’

However I couldn’t bring myself to remove this beautiful 80 year old Poinciana tree with bright orange flowers. So we designed, I designed the project around it.

We had an eleven meter setback not a six meter setback and we went to council cap in hand said, ‘We really want to keep the tree, would you give us some relaxation on the number we could put behind it so that we’re not penalised for keeping the tree?’ And they really came to the party. They saw the sentimentality of what I was trying to achieve and they really applauded it. And so we built this block of unit townhouses, well they were essentially units but with large gardens for the ones at the front almost like townhouses, and it was only three stories but essentially around this beautiful tree. And we used the colour schemes to contrast, so it was dark blue so that we could help fit, against the orange flowers it would just pop. And the council loved it, the clients, the buyers loved it and it has just been timeless and has held the test of time. So yeah that was probably an example where everything just came together beautifully and seamlessly.

Tyrone Shum:
She adds that it was with this particular project that she was able to work with the council rather than against it, highlighting the benefits of good intentions and clear communication.

Louise Fitzgerald Baker:
We had no obligation to keep the tree, so it was a refreshing and untested terrain actually to go to council and say this is the design we’d like to build in and do we have your blessing to do so. But what we needed from them was in not building further forward, could we still create the design using the space that we had left and would they allow that to happen? And in this particular case the council really loved it. They said we see what you’re trying to achieve, it’s boutique, it’s different, it’s beautiful. So yes, we will allow you to save the tree, do an 11 metre setback, give you that relaxation but give you the ability to do the number of units you would have had otherwise. And so that was a real lesson in, there are sometimes human beings on the other side. Sometimes we can assume that as property people, that we’re on one side of the fence and council’s on the other and it can feel a little adversarial sometimes. But I have found that if you have the right intentions and you are able to articulate clearly what you’re trying to achieve, and you speak to the people that have a similar philosophy to you.

They can listen. Which has been really refreshing.

Tyrone Shum:
Discussing her jump into property development, Fitzgerald-Baker shares the steps she took to gain the confidence she needed to kickstart her property career.

Louise Fitzgerald Baker:
I was reading property investor magazine cover to cover every month that it came out and I would study it and read it and then I’d go to a lot of auctions and watch the property prices and I studied the market for eight months before I bought my first property. I was hellishly conservative.

I had a lot to lose so I wasn’t going to bet the house unless I felt really confident that the market would be supportive of what I was trying to achieve. And then I got to the stage where I just thought, I feel I know intellectually everything that I can probably know about this. I now really need to throw myself in and just do it because it’s a bit like, you can read about what a cake tastes like, you can see pictures of it, but unless you bite into it you really can’t say you’ve had an experience of what that taste like. And it’s a little bit the same. You can devour as many magazines and journals and articles and blogs and blogs and turn yourself inside out. But at some point you just have to play and that was really where I got to and that’s really with his blessing.

And we’ve been tested over the years. There’s been your project where we’ve had to look at each other and he’s gone, ‘Yeah okay we’ll write this through.’ So you need that support because it would be terrible for a party to be a fair weather friends where they just say, ‘Yes I’ll support you and you win and if you don’t, I’ll remind you of it every other day.’ That would not be fun at all.

Tyrone Shum:
Discussing the importance of being mentally prepared for a loss, she also shares why we should appreciate the abundance of profitable opportunities we have today.

Louise Fitzgerald Baker:
You just have to make sure that you’re either playing with money that you are prepared, not wanting but prepared, to potentially lose if you’re gonna go into property development.

No one ever expects to, but you just have to be mindful of the risk and not everyone has that appetite. Not everyone has an appetite for risk. But as I said, back in those days property was the vehicle to be able to catapult your position from just surviving to actually getting ahead. And that’s really why I chose it because it was familiar to me. It makes sense and it was an avenue that I’ve seen could take you from survival to thriving and that’s really where I want it to be. Whereas these days as you know there’s a lot of other vehicles. There are online businesses, direct selling, virtual franchising, affiliate marketing. There’s so many other ways that you can generate cash flow from home and in your own time and space.

But back in the days in the 80s, or 90s when really, when I started developing it was 2007, it wasn’t like that. We didn’t have that many avenues, so I had to just play with the chicks that I was dealt.

Tyrone Shum:
Thinking back to her first project, Fitzgerald-Baker outlines the research process she went through before locking down on that first development.

Louise Fitzgerald Baker:
I had done my research. I bought two properties. I had two houses side by side, case in the city. I thought well they’re not going to go down in value and they were already signed on low to medium residential so I knew I could do something with it. So my first point was getting my foot on it, getting a sense of what was possible, finding out through town planners what is possible and probable for that block. And then once I got a sense of the price, then the first part was just getting my foot on it. So securing it under contract with a clause that would give me the ability to do my due diligence safely but secure the deal in the meantime. And at the time I had a one and a half year old and a five and a half year old a seven year old and so I remember being there with the baby when we were doing this deal and it was really, you don’t know what you don’t know sometimes Tyrone. Like looking back it was a really gutsy move. But at the time I remember thinking this really would work. You know I can’t see a reason why it can’t work! I’ve done my research, it’s three kilometres from the city, it’s zoned accordingly. I think it’s really got a 99 percent chance of doing very well for us.

And so what followed on that particular deal. It was a, it wasn’t seamless but it was a three year project. A lot went right and a lot went wrong and it changed my life at the end of it.

Tyrone Shum:
And how the success of that deal helped launch her property career…

Louise Fitzgerald Baker:
I didn’t know what I didn’t know. It was 2007, it was a high point in the market in Brisbane, it was three kilometres from the city and it was a property along the rail line and it was two houses, one was really a ramshackle house that had to be cooled down and was an eyesore to the front. And then there was quite a lovely house to the back which I moved and sold off the property and then what I had designed or what I had envisioned

I was going to put three whole townhouses to the front and then eight body corporate ones to the back and that and then I’d sell the front for more of a premium because they were on the street quite a bit from the rail and then the ones along the rail they would sell for a more affordable price.

So that was how I had envisioned it working. And at the time I remember the bank ended up you know I had no experience and we hadn’t costed in the GST and I remember having a conversation with my bank manager and he said, ‘Well who’s paying the GST?’ And I said, ‘Well I’m not, I haven’t got it.’ And he said, ‘Well we’re gonna have to then.’

Tyrone Shum:
Attesting this amazing outcome to not only luck but the state of the market during that time, Fitzgerald-Baker shares the life-changing realisation that this particular project gave her.

Louise Fitzgerald Baker:
It was, the timing was quite lucky so that someone like myself with virtually no experience but with a lot of research and I guess I could talk my way through it to the banks to sell it to the banks. I had the ability to then go for it and I had to use all our property, our home. We borrowed against everything we had. So that’s where we really had to put our money where our mouth. And that’s where I had to get my husband’s blessing to say, ‘Well if we lose, we lose it all right.’ And essentially on that I ended up going with a builder that I knew and trusted. That was the good news. The bad news was he had a foreman that wasn’t trustworthy and you know he was losing money on that job and the foreman wasn’t turning up and he was selling air conditioning units through other vehicles. So it was really quite dodgy. But in the end, the build was delayed. And I remember thinking is this ever going to end? And then eventually we finished it and we [were] just in time to release into the global financial crisis. And I just thought, ‘Oh here we go.’ But I ended up selling the front too and I sold them and we made the profit that we expected and we refinanced the back and then eventually went on to sell them. But that actual project meant that after three years of living hand-to-mouth, eating baked beans and just having to, just to really be mindful about it. I was working a full time job plus managing this project on the side and my husband was working and we had three small children. It was a really heady time. But when we got to the end of it I remember we had sold the front to pretty much pay down the majority of the remaining debt, refinance against the rest and we were financially, I remember the bank said you’re financially free.

And we could have just held those units and really had a nice steady income and not replaced a wage forever. And so I remember thinking, ‘Wow this property gig is amazing’ and it felt almost like being in a really dark place for years and then suddenly getting to the end and the light, that we came through that tunnel and we could see the light suddenly. And then that really took off my property development career so went on to build about 42 million dollars worth of property over the next 10 years during school hours while the kids were at school. And that’s sort of what the game I played. So that really gave me the confidence and courage for my you know and for investors as they did investing with me in the early days they were sophisticated investors and they knew of my level of experience and so you know some of their returns and some of the projects were 65 percent annualised return, in compensation for them trusting me before I had the runs on the board. And then once I had the runs on the board I got more sophisticated in the way I could structure it so that I wasn’t paying as much money for money, and that you know, that’s often the tradeoff you have to make between experience and trust.

Tyrone Shum:
Coming up after the break we will delve into why Louise Fitzgerald-Baker has stepped away from property.

Louise Fitzgerald-Baker:
I’ve actually stepped aside from the property through this mark for this time in the market, because I often work within a radius of where I live

Tyrone Shum:
She shares more details about her book.

Louise Fitzgerald-Baker:
The book itself was about generational resilience, money 101, and how to recover your position when life deals you a blow you didn’t expect

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

Despite having had so much success as a property developer, Fitzgerald-Baker shares why she’s decided to step away from property developing and what her current focus is.

Louise Fitzgerald Baker:
I’ve actually stepped aside from the property through this mark for this time in the market, because I often work within a radius of where I live so that I can be intimately involved with the deals rather than working interstate because I’m bringing up a family as well. And so for me the risk became disproportionate to the return, for the area that I was working with. Unless I decided to move into a different asset class and just to have some land developments or something slightly different. And I didn’t want to move into a different avenue. And also my stage of life changed, you know, so I’m now at a point where I thought I really want to go into cash flow positive businesses and opportunities that have virtually no risk. And so I’ve changed what I’m doing. So in regards to that I wrote the book the pink hard hat, building a resilient woman and that’s really the story of generational resilience across the three generations of women in my family. And my mother is one story I shared with you today but there was also, it started with my grandmother and then it goes on. And then I’ve got three daughters and how I’m teaching and educating and equipping them to grow into this world and know and understand and use money as a teammate.

Tyrone Shum:
Drawing from her own story and the stories of the women in her life, Fitzgerald-Baker shares why educating individuals and more particularly women, has become an important goal for her…

Louise Fitzgerald-Baker:
The book itself was about generational resilience, money 101, and how to recover your position when life deals you a blow you didn’t expect and then in raising the next generation what are we doing. So I wrote that book and then have seen in the last year – we launched that in February, National Australia Bank launched the book – and I’ve been speaking and doing a lot of speaking to corporates and companies about really leadership growth, financial contribution, women’s role in that and all of those pockets. So that’s really been an area that I’m working with now, virtual franchising and other income streams. Particularly I have a heart for helping women make the financial contribution while you know, as their life shifts and changes. So that’s been a real passion for me. And I guess you know in the future, so I still have property, I’ve now stepped back into a silent more investing role, both residential and commercially and just sit and wait the market out until it becomes more compelling and irresistible to play. And then when I do go back into it, it will be in a different space so I anticipate it will be more around tiny housing and housing for pockets of the community that are not currently accommodated with great dignity. So the fastest growing homeless demographic in this country is women over 55, and that’s really alarming and scary for me to see and I can’t really sit by and watch that. So I’m really certain that my future will involve somehow being part of a solution for that demographic so that they can age with dignity in places that they are proud to be in.

Tyrone Shum:
Talking about the various types of developments she’s completed, Fitzgerald-Baker discusses the importance of devoting her attention to individual rather than multiple projects at any given time…

Louise Fitzgerald Baker:
I did everything from four packs to twelve packs to up to thirty units in a block. And I use my intuition to be able to anticipate what the market wasn’t currently seeing enough of yet and building to that and then I only did one development at a time. I found I did try, I did go through a period where I’d do multiple but I found for me particularly was the risk, and I just wanted to give all my care and attention to one at a time and then that worked really well for me. And then just basically carefully stepping once, not getting ahead of myself. And not getting caught up in it because when you’re in property development.

You really go into it, I went into it for lifestyle. I went into it because I was very mindful of the world I wanted to create for me and my family. And the level, the pink hard hat is a metaphor for insulation, you know to insulate yourself. When you go into a worksite you wear a hard hat to protect what’s important, and you wear a hi vis vest to stay feasible and steel capped boots to give you confidence to [walk] wherever you want to walk on the site. And my message to women is wear the hat, stay visible in relationships and be confident enough to walk freely in constructing a life that you want to design.

Tyrone Shum:
Fitzgerald-Baker shares that individuals should maintain a mindset that not only allows them the confidence to invest or develop but also appreciate the journey and its rewards…

Louise Fitzgerald-Baker:
I think that essentially you know from that side it’s about mindfully creating a world you want to be in, rather than just getting caught in the hamster wheel of “Oh I finished deal, now I throw all my money into the next deal and then you almost heave into the next deal and cannot enjoy it.

So I was really deliberate about starting a project, loving the project and really enjoying the design and what I was going to create. I would celebrate the end of a project with a great party and invite everyone that was part of it and we would almost birth the project. And then I would celebrate with my family because it can often be a long time between drinks. It would be three years and sometimes you get to the end of that three years and you didn’t make money, and sometimes you did and that ship will come in very well and sometimes it was just a small boat but we would just say, ‘Well right, what are we going to do with that?’ And then I was very mindful about enjoying those times because I didn’t want to be one of those people that just went, ‘Oh one deal, done. Now the next deal, now the next deal.’ Because why are we doing it? It would just be, we’re just doing a job then, you know we bought ourselves a job.

The whole reason we choose this vehicle much like any other vehicle whether it be direct sailing or whatever it is, is because we want a lifestyle and we want money working for us, not us working for money to the point where we forget to enjoy.

Well the whole point of [it].

Tyrone Shum:
Providing such an insight into the value of property developing, Fitzgerald-Baker shares whether there were any mentors that influenced her.

Louise Fitzgerald Baker:
I have a brother in property and he’s six years ahead of me and he’s really big on the marketing side, so obviously [him], but as a mentor maybe not because he was sort of on such a bigger level than me that his experiences didn’t transport to my little world. Because my projects were all very small in contrast you know, they’re under five million or under ten million and his projects were way bigger so it almost didn’t translate.

I think there was another case where on a big project I did have a mentor just see me through that and sometimes it helps and sometimes it’s just interesting to see that it gives you the confidence to know you’re actually going to be okay. That you actually know more than you think you do. And I read a lot and really I guess I didn’t have strong – it was really just what I read and who I surrounded myself with and just being clear on my own journey.

Tyrone Shum:
However, while Fitzgerald-Baker shares there was no one particular mentor, she does give credit to the resources that assisted her

Louise Fitzgerald Baker:
The Property Investor magazine, obviously my brother’s book which is Seven Steps to wealth, he is amazing and has written that book.

That’s a great one. And it’s all about how buildings don’t appreciate but land does. For me,

Property Investing magazine was useful because it showed a lot of people doing the deals that I was wanting to do and it gave the numbers. And at the time I was hungry for that detail to know I’d be okay. So wherever you can get access to information that it is an open book on the numbers as well.

I think Barefoot Investor was a great book as well. I really enjoyed that and because it sort of simplifies the journey of just one step ahead at a time and also know what financial abundance is for you.

It may not be a big house. Some of us can be overcommitted with that. It might be the simplicity of knowing that you’re going to be okay, you’ve got your house paid off as humble as it is, and you’re able to travel and be present with your kids. There’s so much in that and the older I get the more I realise the importance of that. That it’s not about money and wealth, because that’s the whole point then you know when you leave, then you can step get elegantly away and say, ‘I’ve had enough thank you, I’m ready to play a different game, I’m ready to do something else and my whole identity is not tied up with this deal or being necessarily a property developer. It’s okay because I’m reinventing myself for my next chapter.’

Tyrone Shum:
On another note, Fitzgerald-Baker shares the best advice she’s received and how you should take this advice into consideration during your own journey…

Louise Fitzgerald Baker:
I think just one step at a time. Take it one day at a time, one step at a time. Don’t get too ahead of yourself and enjoy the journey along the way, would probably be it. And don’t compare yourself to what others are doing. Just keep your own blinkers on so that you stay in your own lane. We all have a lane on this highway and we all have different cars and we are all going at different speeds and some of us pool over and others are speeding along. And it can be easy to be distracted at what others are doing and how fast they are going and the car the driving, but I would just say stay in your own lane. Be mindful of the pace you want to go out in and the vehicle you want to use and be part of [it] and the music you play while you’re doing it.

So really just be at peace with that, and surround yourself with people that are doing that already. Today with podcasts like yours, and Instagram, and Facebook groups and everything… you’ve got so much more at your fingertips than what I had growing this business and people are way more reachable than they used to be. So use that to your advantage but without becoming overwhelmed.

Tyrone Shum:
While taking her journey one step at a time has undoubtedly helped catapult her career, she also highlights how her personal habit of maintaining a routine has allowed her to stay productive in both her personal and professional life…

Louise Fitzgerald Baker:
I do the same things every day.

I think consistency is helpful in a world that can be strategic and change quickly.

I had to work out what helps me keep a cool head. And so for me it’s little things. I wake up at a certain hour and make sure I run seven or eight kilometres. I put my headphones in and I’m listening to positive uplifting music, or podcasts, or information. I come home, I clean the house until 8:30 am – which sounds really strange but and then I go to work, I take a cup of tea and hopefully spill it on the table and I go to work. Then I literally work until the children finish school and then I have time and space with them and go into the evening being available to the kids. And it sounds like a really strange way of talking even about housework, but what I actually found was if I contained those aspects within a day I could return to a home that was ordered and everything, it just seemed to me that I could cope with anything. When the house was organised everything was ordered I could build wealth between school hours and then create a nice home as well. Which sounds really old fashioned now that I’m saying it out loud but that’s what’s worked for me.

Those little habits of making sure I was contained, the house was contained, everything else was running smoothly. And then whatever happened in the business between those hours I could manage it. That’s how it worked for me.

Tyrone Shum:
Reminiscing ten years into the past, Fitzgerald-Baker delves into the advice she would have given herself in hindsight and how she’s imparting this knowledge onto her daughters now…

Louise Fitzgerald Baker:
I would’ve said enjoy the ride girlfriend.

Multiple income streams.

That’s the really, the big lesson for me. And that’s what I’m teaching my girls. My daughters are now 19 and 17 and for them I’ve already got them learning about multiple income streams, learning to generate income from multiple stations in life so that you know as you evolve and become parents and become whatever it is next, that money doesn’t ever become something that you feel is going to hold you back. That you’ve got that magic superpower that you can generate income in whatever you’re doing and that’s what I teach my kids. So that they’re confident as they navigate their way through life and they never feel beholden and they’re never in a situation, or a job, or a relationship where they’re feeling less because financially they can’t squeeze out of it.

Tyrone Shum:
On a final note, Fitzgerald-Baker shares why she believes that the recipe to successful property investing comes not only from skill, hard work or luck, but rather a combination.

Louise Fitzgerald Baker:
There really is an element of luck in this.

I would love to say it’s all about the skill and the talent and hard work but property is a game and sometimes you just need a little bit of luck, or God, or [the] Universe, or whatever you want to call it because there are times where – and there’s an element where – it’s out of your control. And it’s difficult to put a proportion to it.

I do think if you have the personality, personality is another part. Like skill and intelligence is one thing, but to be honest I think it’s as much about discipline, your personality, tenacity.

I think if you’ve got the discipline personality and tenacity then no matter what life will dish out, whether it’s the 2011 floods, whether it’s the 2009 GFC, whether it’s the war on terror, you know a couple of years ago where the husband leaves stage west or whatever it is that life dishes up, you’ve got the wherewithal to go through it and not implode.

And that is really a function of discipline, tenacity and personality.

Tyrone Shum:
Showcasing these exact qualities throughout her own property journey and with so much advice to give, you can reach out to Louise Fitzgerald-Baker through the following avenues.

Louise Fitzgerald Baker:
I’m on the pink hard hat dot com dot au. And that has all my events and you can get the book from that website as well. There are my Facebook, so Louise Fitzgerald-Baker, The Pink Hard Hat Financially Independent Women is on Facebook and Instagram if you’re on Instagram I’m @loufitzbaker.

So all of those places they can find me and reach out. I’m very accessible and I just wish all of them, both men and women, I know you’ve got a whole group of listeners out there, I just wish them really all the best. I wish you all the best in that journey and property is an amazing vehicle, it can take you to the place where you need to be and it’s such an exciting journey. So I wish them the best as they go on it.

Tyrone Shum:
Thank you to Louise Fitzgerald-Baker, our guest on this episode of Property Investory.

If you want to hear more about her journey, then visit our website at www.propertyinvestory.com.

Also, if you haven’t subscribed to receive your free property case studies that I only send out exclusively via email, you can text me your email address to 0499 88 10 40 to subscribe.

These real case studies are from experienced property investors where they share specific numbers of their portfolio, the strategies and much more.

Simply text me your email address to 0499 88 10 40 to get your free case studies. Thanks for listening!

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