The mindset shift that people have to make is the money is subservient to them. They're not subservient to the money. Hello,
and welcome to the Business of Architecture. I'm your host, Ryan Willard, and today is my privilege to converse with Mr. Richie Clemson, the co founder of property CEO. So Richard has had a very interesting career spanning nearly four decades in property development, Mr. Clapp Sun has firmly established himself within the industry. He is the founder of property co where he imparts his vast knowledge guiding both budding and seasoned property developers to achieve significant returns from small to medium scale projects, where G is commendable portfolio is a testament to his expertise. Originally, he was trained as a structural engineer, and he has lent his skills to an array of new builds commercial ventures, and industrial conversions. Moreover, throughout his distinguished career, he has taken many developers and property experts under his wing, offering them invaluable mentorship. Beyond property development, he's carved out reputation as a business coach and strategic. Under his leadership, one of the UK foremost structural engineering firms have flourished. Furthermore, he earned the prestigious appointment by the government to serve as a peer review engineer for the London 2012 Olympic Stadium. So this was a fantastic episode, I got some brilliant insights here into wealth creation, the difference between earning money and making money. It's very clear, Richie has gotten an extraordinary amount of expertise, understanding both from a professional working in the construction industry, and as an entrepreneur, dealing and working with development and self initiated projects. Again, a very hot topic right now for architects particularly here at Business of Architecture as we're leading a campaign and a mission for the affluent architect for architects to be able to build wealth. Becoming a developer becoming a property CEO is one of those skills is one of those opportunities that is available to us all. And people like Richie can be a great facilitator of that expertise. So sit back, relax and enjoy Ritchie collapsing.
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Richie, Welcome to the Business of Architecture. How are you?
I'm very good. Ryan, thanks for asking me. I'm very pleased to be here.
My pleasure. So for very interesting career, you're not an architect. So I always enjoy speaking with people who have kind of outside of the the architecture industry, your director at property CEO, which is a Training Agency, if you like, or training consulting firm where you're helping people make money from small scale property development, your your own background was as as an engineer,
is that right? That's correct. Yeah. But chartered structural engineer by profession. There
you go. So So you've very similar kind of profession to architecture. And now you're spending a lot your time teaching landlords, property developers, professionals, investors, how to actually take on small scale developments, and turn them into businesses, which is, you know, actually last night I was here in New York, we led an event called the architect developer, where we had a kind of roundtable discussion, which was filled with architects with one architect who had done some very simple renovations to their own home. Or she was quite complex renovations to someone who just finished their first development project, someone who have done five, to one architect who, literally their whole business model is architects developer, and they've rebuilt large slaves of Dumbo Brooklyn, so kind of a real spectrum of scale from small residential to multi housing to multimillion dollar schemes.
So there was some fantastic evening. It
was it was very interesting, very, very interesting. And This is a topic which I think, you know, so many architects are interested in doing because. And I would imagine a lot of other property professionals or construction professionals, because you're working so closely with these financial assets, you're inputting a whole load of your own expertise. And yet the upside for you, as a service professional, is not always comparable with say, the person who's taking the most risk financially, which would be the developer. And that's often for certainly for architects, that's often a kind of a source of either frustration or inspiration depending.
Well, I guess, I guess the frustration, you need to turn into inspiration, because there's no point sitting there with frustration there shouldn't do something about it.
Yeah, absolutely. Absolutely. So perhaps you can start by telling us a little bit about your own career trajectory, what took you from engineering to what you're doing now? Yeah,
well, it's interesting. I mean, I followed the professional route, right. And so I left. I left school at 16 here in the UK. And, you know, I come from a good background, but we weren't a wealthy family. So, you know, you have to make your own way. And my father was a structural engineer was still is a structural engineer doesn't practice anymore. And he was a fellow of the Institute, a structural engineer. So he got to a fairly high level, very technical individual, very capable, very clever man. And I suppose naturally, you, you think about following your father. And he bought, he used to bring accountancy books home and told me to read them, and I read them, and I couldn't be bothered with that. So I left school at 16. And I started on the drawing board. And I did my educational day release my university degree day release and became a chartered structural engineer in my mid 20s. But very quickly, I realized that actually, the engineering wasn't really getting me out of bed. That wasn't the exciting thing. I, I joined a large corporate Long story short, I went through a couple of businesses joined a large corporate who was very acquisitive. And a company called ws P used to be called William Sell partnership back in the day, and I was there, the very early days. I mean, they're a global business now. And I learned a lot there about acquisition and growth of business. And in 1998, I decided to leave and start my own business. I bought a practicing structural engineering company in in West London, and went out and acquired a number of other businesses along the way, and built a build ourselves up for ourselves. So we always had a plan to build that business for sale was a 10 year plan. And we did it in 10 years. A lot of people say how can you have a 10 year plan? Well, you because you have a plan, the route the route changes, but if you said 10 years, you got to work 10 years, I missed it by four days. So I was always a bit, a bit furious about that. But anyway, we grew that business. And, and for me, I'm I am a structural engineer. I'm a chartered structural engineer. So I'm professionally qualified. But I'm a businessman. And what I did is, I worked out how to how to get that business Scout at the right level, and get a multiplier into that business to sell it at a high level of seven figures. And we positioned ourselves, I basically became probably one of the best structural engineering firms in the country, if not partly in the world, not me personally. But I had some real top performers that I engaged into the business. And we positioned ourselves. So we were invited by the government to peer review the 2012 Olympic Stadium, national aquatics and the villager. So we worked at that very high level. So you sort of people say, Well, you're the best in the world. Well, the best engineers in the world, design those buildings, and well, they had to find someone better to check those engineers. And that was us. And so that position does for a sale, and 2008, we executed a sale in 2010 for this year now, and left and retired. So that's my structural engineering journey.
I mean, that in itself was incredibly impressive, because A, it's very unusual to hear people even think that you said to have a 10 year plan and to be thinking about an exit and an exit being like an equity event or a sale in, in the world of engineering or architecture. About that to that takes quite a leap. I mean, in lots of other businesses and industries. That's quite standard, standard thinking, but in construction, that's not often that's an innovation, if you like,
I think it is, yeah, you know, I am an innovator, you know, I like to push the boundaries. I like to do things. And you said it right. You said at the beginning of this, this podcast, you said there's a lot of architects who often look at the rewards they get for their architecture, and the same as our structural engineers, compared to what the developer got. Well, I look to very quickly worked out what I was earning as, as an owner, owner, director of a fairly reasonable size, but well performing structural engineering firm. And then I worked out what I would earn if I sold the business. And it was It paled into insignificance. So why wouldn't you build a business for yourself? You know, you're many, many more times in terms of money back out the back end, and it's all profit. And it's a great saying, someone said to me once, if you can bank some money, bank some money, because you can go again. So I retired in my mid 40s. And during that time, although as a structural engineer, I did sort of high level engineering, I didn't really crunch the numbers, I didn't run the projects at a team to do that. And I worked with developers. So for many years, I've worked with existing developers, and worked with them to do things better. I'm a bit of an out of the box thinker, I'm a little bit to the point, sometimes, you know, I have a short attention span, and I don't see why we can't do something, I like to not hex heads together and say, Come on, surely we can find a solution. Doesn't matter what we've always done, let's find a solution. So I used to work with developers and help them develop and be better developers. And I've worked with other people that wanted to become developers. And that gave me an appetite for working with developers, and did a few of my own developments along the way, you know, on that journey, and, as I say, retired in 2010. So that was my engineering journey over and done with in my early 40s.
Fantastic. And then And then what happened? So you're
gonna ask that you're gonna go, oh, so what happened? Then? How did you get to where you got to? Well, I think the journey is interesting, because we, I suppose we all a lot of us have this ambition to retire. And I now know probably, that's probably not the right thing. And I think I'm a believer now in work and retirement or retirement or work if you can actually tie them together. They're the same thing. And I said to someone the other evening, I, just after a presentation I'd done onstage in London, and I said, they said, What do you mean by that? Because I talked about that common. And I said, Well, think about the your, your pop stars, you and your musicians, or your great actors, do they? Do they retire at 65? And buy a camper van and travel the world? No, they don't. Or an RV, if you're in the States, they don't. So they they just get that balance? Right. And their work is is their retirement, their retirement is their work. And I think I think what I know in 2010, I got that wrong. So I bought a boat, a boat, some cars, I bought quite a few cars, I bought a big house, big pool, big cinema room in the basement. And I thought we'd done it all. And then I dabbled with some businesses. But I had no real purpose or focus or vision on what I wanted to do. And I think that's the that's the thing that we often can get to and a lot of entrepreneurs that sell out interesting enough, I was talking to a great entrepreneur in this country here in the UK, who said they're a bit like lottery winners, lottery winners have no purpose, and they normally blow their money within two or three years. Yeah, a lot of entrepreneurs who sell out, can lose everything within a few years. And thankfully, I didn't. But I definitely made some mistakes, you know, one that cost me half a million pound. Which the kids weren't happy, there's part of their inheritance gone. So they were all over that one. But if things happen, and then you think well, what I want to do,
what did you do to lose a half million quid?
What did I do I let someone else run a business. Okay. I set up a construction company with a friend of mine number one role, don't work with your friends. But we did. And you know, it went quite well. It was a bit of fun. Let him run it. And my fault took me off the ball, let him run it and he messed it up. And so I had to step back in. And I mean, he did a runner, he basically just disappeared. So there we go. No backbone of that fella. But anyway, such as like, you learn, I had to step back in and I remember actually is interesting because this this makes you stronger. All these things make you stronger. And Orion my account that said to me said no, you're okay. You don't have too many personal guarantees on this. I said no, but we owe people money. You should check if we don't have personal guarantees. I said no, but we owe people money. So I need to pay him. And so we had lots of unfinished projects, deposits paid by clients, their work hasn't been started. And lots of trade contractors. I remember. Coincidentally, I was chatting about this last night to I met at an event a couple of trades people plumbers in the UK. And I was telling this story. And I said, well, there were two electricians who were owed 15,000 pounds. And they had no personal guarantees, but that was the difference of them paying their mortgage or not. Also paid them so the half a million was me paying everyone off finishing all the obligations of the business and moving on. So yeah, it was an interesting year 2016 When you see half a million quid just going out your bank account month after month. Yes, it's an interesting journey, but getting good at pulling all that to one side. What I what I decided to do was actually I guess, let me tell you the story. I will I wanted to find out what I wanted to do in life. And I think when you get to a point when you can pretty much do what you want. So we got rid of that construction company. Eventually, I had to liquidate one start a new one finished the obligations and sold it off. Okay. And I had a period in 2016, where I had absolutely nothing to do again. And so I thought, What should I do? And a friend of mine said, Come on, he's got a couple of tickets to an event in London, the weekend and it was all about fix your mind find your true purpose in life. And I thought, I thought, right, I thought that'd be fascinating. So I went along, and I played, you know, played the game with them, I thought you're gonna go all in, if you're gonna go to something, you got to go all in. And it was a bit odd. Some of the things were a bit, I call woowoo. For me, but we were working with our unconscious minds. Okay. And we had to do this exercise and the long story short, because I could talk, talk for an hour about this accumulated with turning the last page of this process, picking up a pen using your unconscious mind or writing your true purpose in life.
And I did it. I wrote this statement. And I looked at it. And
then the guy who was running the event, David Scott called David shepherd in the UK. He come over and he said, Hey, get an honest and I've done. I said, I've written this. He went, that's really good. I said, Yeah, but what do you think about it? How did that happen? He said, Did you do everything? I said, I said, Yes, I did. He said, That's fine, then. And I said, Yeah, but I've got all these business interests. So I had other stuff going on, including developments. And he said, they said, Well, which one of those businesses relate to, to your purpose in life, and it was property CEO, which is what I now run. And he said, Well, just just do what your purpose is do that for the rest of your life, and you'll be the richest you could ever imagine.
And he walked away. And he turned back. And he said, but I don't mean financially.
And my statement that I wrote, My statement that I wrote back in 2017, January 2017, was inspirational, thought provoking leader with the energy and drive to enthuse others. And that's what I do. And so we decided to set up properties to formalize what I was doing in my business partner was a student of mine. And this coincided with the end of the years private training. So to train people privately, he said to me, we should start a property training company. Now. There are a few property training companies in the UK who had a bit of a bad rap. I don't know whether that's fair or unfair. But I wasn't really interested in starting another company. But long story short, he persuaded me the best decision I've ever made. And really, all I do now is, you know, I'm the sort of, I guess, frontman in lots of ways for the business. I'm the property guy. I've been in this industry over 40 years, and professionally qualified, I've done this loads and loads. And so now, I go around the country speaking to hundreds, if not 1000s of people every year. And I train students, I train students, both brand new people to become property developers and existing people, or existing developers to do a better and it fits around two visions have two visions, and this is why I do what I do. Not only is that purpose, that statement in life, always behind me inspirational, thought provoking leader with the energy and drive to infuse others. But two visions one vision app to help do my bit to solve the housing crisis in the UK, because we fall hundreds of 1000 700,000 Short every year. And if I can train small scale property developers that used to deliver 30% of the housing in this country, but now deliver less than 12. I can do my bit there. And we desperately need houses in the UK. And second part of the vision is to help those people and as you rightly say, right, it does include a lot of industry professionals, whether that be architects, structural engineers, project managers, cost consultants, as well as other business people out there in completely unrelated industries. If they want to earn 100 200 300,000 A year 400, doing property development, small scale property development, you know, smaller projects between five and 20 units. And as they're prepared to put the hard work, and I'd love to help them, support them with my team, and my processes and change their life. And that's exciting, changing people's lives, when they're prepared to put the work in and you get them to because 200 300,000 a year doesn't make any difference to the big UK house builders, whether that be Barrett's or persimmon or Bellway. But two to 300,000 a year by converting maybe an old industrial building or office block into some flat changes the life of an individual. Yeah, that's what I do. Now, why I do it. Absolutely.
Amazing, very, very inspiring. Kind of the two wings there of your, of your vision. The first part was talk about the housing crisis and the very images again, and I like the fact this is something that's very much on the priority for so many architects, and why becoming a developer actually is very empowering, because you can have a direct impact on actually creating housing. And actually an architect's, I do believe have a very good eye for actually identifying sites or identifying plots, which most developers would would walk away from, and they're able to actually see something unusual or unlock it in a very innovative way. I mean, yesterday's talk here in New York was filled of kind of urban gap sites of architects taking them ones that developers have overlooked and doing something very interesting and and unleashing a lot of equity inside of that, with the, with the developers very interested in as well that that you actually helping not just professionals get into development, but existing small scale developers to bed to increase their, their volume, if you like, how do you? How do you do this? What what what kind of process do you take people through when they first kind of start consulting with you?
Okay, yeah, so, so I'll tell you what we did. Let me just take you back in terms of I used to train people privately. And that's how I met my business partner. So I trained him for a year. And I used to take either individuals or a small group on a 12 month journey, and go through a process with them. That was fairly, fairly prescriptive. But it wasn't entirely laid out, I guess. Because I used to do it myself. I knew what I was doing. The fundamental principle to this to set the scene for this is I train you to run a property development company. And let me let me wind the clock back to when I first met Ian, who's the co founder of property co here. He met me, I came offstage at an event. And he came up to me. And his background is global corporate finance, business underwriting. Anyway, he'd retired out of that, and he seeks me out, someone had recommended me, he'd come to see me, I came offstage. He come over and said, I've come here to see you tonight. Great talk about but I'd like you to try me to be a property developer. That's okay. And he said, have some questions. And amongst his questions, he said, my number one question is, how can you get me credibility to be a property developer? How can you get my credibility up? I said, just remind me what it is you've done again. So he told me global corporate finance. So I said, No, I can't do that. Then. He said, Would you mean, I said, I can't get you credibility as a property developer. He said, Well, that's what I want. I said, I don't care what you want. I said, you know, if I came into your industry, am I gonna get credibility straightaway? Well, no, I'm not, you know, and if I wanted to be a doctor, or a dentist, I got to learn alongside one if I want to be a structural engineer, nine years, it took me to get qualified. Now with all the training on the on the job stuff. Oh, I said, but what I can do, I can get your credibility as a property CEO, Chief Executive Officer, what's that? He said, was that mean? And I said, Well, let's take this cabinet minister analogy we have in the UK Government ministers, and we have a minister in charge of defense. Do you think for one minute that minister knows anything about tanks and guns and army? Probably not. And next month, they might go to health, let's say health? Do they do they suddenly have all of the experience of doctors and medicines and hospitals when No, they don't? And being completely apolitical, not going? Well, of course, they bloom and open, forget any politics. What they do is they use their skills as a ministerial leader, department leader, CEO, if you like, of those businesses, Allah Richard Branson. Richard Branson is not an expert on aeroplanes, cruise ships, finance, or probably anything else he does. But he's a CEO. And that's a number one fundamental principle because it's about leverage. So overarching everything, all I teach people, right is to run a business. And most people in the UK and probably around the world don't get trained how to run a business. And he just happens to be a property development business. And I take him on a 12 month journey, which revolves around Open University style education. So they have about 100 modules. And this is serious educational stuff. It's, you know, these bespoke modules took us a year, one year to record all of these modules, write it all down, take everything out of my head, put it together, edit it, get it ready to bring people in. So they get 100 modules. They do eight weeks of education. And then we have a full industry coaching team. I'm talking about structural engineers, architects, project managers, cost consultants, planning consultants, that help guide them along that way. Business Coaches, performance coaches, branding coaches, and they have all these interactions as well as a lot of interactions with myself and in and they do those eight weeks of education. Then they come to the room and they come to the room they spent in so education, I think as an adult. You have to learn online because you You can't learn in a classroom as an adult, because you go the average speed of the person in the classroom. And as we develop into adults, I mean, I would be bored in a classroom because my attention span is very short. And so, you know, I want to learn faster, faster, faster. Whereas if you're a bit slow, you're going to fall behind. So we that's why we have the online. So when you come in the room, we do primarily what I would call live deal reviews, lighten analysis up on a big screen, looking at projects, look at opportunities, like you're saying they're in New York, these gap sites, what can we do with them? How can we create them, and we'd play around with those in a we have what we call Academy days and developers club, developers club has all the industry professionals there, and we play around with it. And we cement the theoretical education into a practical education and training process in the room. And effectively after the end of 12 months, we we teach people, we have a process, it's like any good business there's, there's a process and there's a system around it. We call it eight pillars. I'm a great believer that every business has eight pillars around it. Any business, I used to advise on business structure and businesses for sale. And you know, you can look at HR, finance, marketing, sales, and you can build up eight pillars, we have a process of eight pillars a system and a process that we take people through. And at the end of it, we've taught you how to build a team and go and run a property development business. So you don't have to be a structural engineer, you're never going to be an architect you it's impossible for you to be a planning consultant. And you're not going to lay the bricks, people. It's bizarre I say to people, do you fancy laying the brick work? Oh, no, wouldn't be doing that. What about wiring it up? No, we've got that I wouldn't be doing that. So why do you want to be the project manager or the architect? You don't? You actually just engaged with the team, and our cabinet minister and Richard Branson as the CEO. That's the approach. That's the theory that we add on the practical side, all framed around, Brian being the CEO of a property company. Does that answer your question? Yeah. So
that's so actually, what you're doing is you're giving people a kind of new way of looking at their own business. So if you're working with a developer, you're kind of getting them to, I'm assuming here to kind of get more out of the weeds and be more in a strategic position. Yeah, and understand the mechanics of the business. And then when you're, when you're working with other professionals who enter into development, then again, it's it's from the perspective of them becoming the CEO, as opposed to actually being too in the weeds that right? Yeah,
it is. And of course, there's a lot though, you see, there's so many existing developers, and I know many in this country, who've never had the opportunity to be educated. Because there isn't really any sort of fault. There are some university degrees and stuff you can do and estate management and real estate and so, but they're not really training you to be a developer. So there's no real formal education, I guess what we do is about as close as you can get to that with our Open University style, sort of education, but I think there's a lot of existing developers who've just learned their business and their craft and a school of hard knocks, often hex trades people that's that's got grown up, and some of them very successful. But when you start introducing to them, processes of leverage, because there's a lot of developers who don't have time, they have lots of money, but no time and you know, money's no good without time because time is more important than money. And so, if you those people will sometimes work with how you leverage it, how you don't run your own projects. You know, I have a great great saying I love it. It's don't buy a dog and bark yourself. You know, you just get someone to do the job for you. There's a great book that actually is out at the moment. Still don't like that word. Don't buy dog barking. So if you can use that that's free from me. But there's a great book, Dan Sullivan. Oh, yeah, document Benjamin Hardy. Oh, yeah.
I know that I know by saw Benjamin Hardy speak the other week, actually.
Oh, they've got a great book. It's called who not how Yep. Okay. Worth read. It was a recommended a presentation I was doing as as a book of the month. And it really it sort of, it sort of dovetails in with everything I say because the who not how principle it is. If we think about development, you don't go How can I build the brickwork? No, no you want who's going to build the brickwork. You don't go How can I learn to be a planning consultant? Are you gonna go who can do the planning? And you don't think how am I going to how am I going to run the team? Well, you don't who's going to run the team? You're going to run the business and the who not how philosophy is so so powerful, that I think it sort of opens up this this objective what to do, and I think that's where existing developers fall foul, and there's lots of technicalities and stuff they don't know. They often don't know formally about contracts, JCT contracts, which is a joint contract tribunal, which is a process of contracts we have in the UK, which a lot of the UK people would be familiar with. And so it's open their eyes to that to leverage the business structure, how you actually structure the business properly. But I think the leverage is the biggest thing that probably people don't understand. We Just a fundamental part of it for those existing developers.
So when you're working with engineers or architects who are becoming developers, how do you stop them from kind of getting too involved in the project? Because I can imagine and, you know, architects, they love to try and do everything themselves. And this is exactly what you're what you're kind of training people to do is to exercise leverage and be thinking about building out teams and, and processes. For an architect, they might be kind of looking, that's one of the reasons why they want to do the project is because they want to have kind of creative control. And to be the one that's, you know, this is its freedom, both financially, intellectually and creatively. So is there is there a conflict in that? Or is that still very possible inside of a kind of highly leveraged model?
I think it is. Okay. And I think an architect has shown a lot of architects have the passion for that design. But the money, there's two things you can do in life, you can earn money, and you can make money. So you can exchange your time for money, or you can make money and making money is generally more preferable. And if we look at a typical small scale development project in the UK, yielding, let's just pick some numbers. Okay, let's pick 300,000 profit, you're gonna make 300,000 pounds, let's be very generous, because they won't get this much. But let's assume the architect got paid 30,000 pounds fee architectural fee, 30,000 pounds to do that project. Okay. Now, the question I often ask people, and it applies to an architect, project manager, structural engineer, project managers, typically, it applies to as well. So a lot of project managers go, I'm going to run my own projects, no one runs a project as well as me. No, but there's the whole 8020 rule. Do they run 80%? As good as you and that's good enough? So the question I then say, so let's say the project manager, and it relates to say back to the architecture, but I think there's a twist with an architecture or with architects. So if if I said to project management, I often do this because they're the common ones. And I say, Okay, how much is your project management fee? Let's say 30,000 pounds, I say, okay, 30,000 pounds, great stuff when I really want to run it. Okay, that's great. And then I just go off track completely. I say, Hey, tell you what, here's a question. What if I gave you 10 million pound? Okay, you got 10 million pound right now? What would you do? What would you do over the next five or 10 years? Oh, yeah. I think about that, what would I do? Oh, well, I'd love to, I'd love to, I'd love to do this. Okay. And it might be I don't know, motor racing. I'd love to, I'd love to travel the world. You know, my wife and I, I'd love to, to really get my kids into into this or that. I want to learn to fly. I'd love to I'd love to learn to play the guitar voice. And they'd all they rattle off when you get them into that that frame of their January. Think about it. 10 million pounds in your bank visualize it.
They rattle off all the things I say to that's interesting, isn't it?
Not once did you say? And what I wouldn't mind doing is a bit of project management on the side. Okay, so I go, that's not your passion. And you might have relayed to me before it was your passion? Oh, yeah. Oh, perhaps it's not. And then I say so the end of the day as well, that 30,000 Pound has to be earned. So there's your hourly rate, whatever way you cut and carve it, you are earning an hourly rate, how many hours you've got to put in a project manager project quite a lot. And there's a lot of hassle. And if you're on sort of your 24/7 call, a contractor is ringing you up the team and so on. Yet, as a CEO, you're making 10 times that you're making 300,000 pounds for probably a 10th of the work. Now, I don't know there's not I mean, I'm a simple bloke, there's not a lot of maths in that to say where the best returns are. And so your hourly rate as a developer is many, many more times more than 10 times that of a project manager. And if there's all these other passion projects that help a charity do that, that you want to do? Well, you can never do that if you're the project manager. And what you ought to be doing as well, as a developer is looking for your next project because the hours you spend looking for your next project will generate you another 300,000 It won't, it won't you know, it's not about earning that 30 or earning that 30,000 you're not leveraging and you can't go and generate that other 300 Now bring it back to architecture because I think I think architects have a passion a lot more than some project managers and I'm not knocking project managers think I've got a passion for this you might have okay, but generally, most people would prefer to go into consultancy don't generally do it for the money because there isn't a huge amount of reward. I definitely went into as a business and worked as a business. If you're have an absolute passion for architecture, and you could genuinely answer that 10 million question to say I would Do some architecture. And I definitely know some architects that would, that's what they would do. Yeah, absolutely, then do the architecture. But which is the bits of the architecture you'd like to do. And if it's that high level concept design, for finish, stop, don't start working out the damp proof course. And the building regulations in this country requirements, though, be the technical architect. And I'm sure they probably won't, but just do that high level stuff. Or maybe, maybe just do that high level concept, because my take on it probably is, that is the most satisfying bit, you talked about those gap sites in New York, it's, it's a satisfying bit where you go, Hey, here's the out of the box thinking, we could create this. And do that, with a developer's hat on working with a separate architectural firm, even if it was your firm that you still owned, then have one of your other directors take the leap. So you're literally the developer with a concept. So I'm a developer, and I think out the box. And when I used to develop my employment and structural engineering firm, but I wouldn't be the structural engineer. So the conflict of interest, I think, can be resolved. And as a developer, we need to be out the box thinkers, we need to sweat the asset. So just think of right I'm creating the original architecture here, as a developer, because that's my bent, that's my background, not because I want to do the architecture. And I think then you could tick both boxes, you could take that ability to fulfill your passion to do the architecture, you fulfill your ability to deliver what it is you want to do in, in housing, wherever you are in the world. And equally, you deliver a highly leveraged business model, because you can, and you're better than the architect that has to do the project for a fee.
I love that they might take no I love I love that. And I think that's very, I think that's very interesting. And we've seen similar models like one of the people was speaking of yesterday, you know, they're kind of working in developments and and then they might have a separate in house architecture team that does the drawings and the architecture, but then there's people who are delivering those high level concepts have seen it before in the past, we've had architects who they have their development company and like what you're saying here, they will hire another architecture firm to actually do the rest of the the architecture and the details and the construction documentation and the CA and all that kind of stuff. And that works very well it's a very kind of, it's a it's a take so foxes I love what you're saying here about the difference between making money and earning money. Now that's just blow my mind a little bit and I've heard this principle many many times but for whatever reason that's another level of of it has kind of clicked that there was a very distinct difference between the your exchange of time for your hours for a set wage versus the making of money the actual building out building an asset, building something which can then be sold creating value, could you talk a little bit more about that distinction between making money and earning money? And and how you help people understand that as they're moving into development, and the sort of mistakes that you see people people make, particularly from a professional context who are going into come in developers and are still in the earning money? mindset.
Let me tell you how that concept came to me many years ago. So my, my wife, Well, I for 33 years, so we're, we're doing well, 33 years long graduations, she must be a same. She used to work as a children's nanny, very high level children's nanny for some very, very, very high net worth individuals in the UK. And there was one particular family that she worked for, without me saying too much about them. So they were probably I was probably we'd not long been married probably an hour 20 Something like that. And they were probably in their 30s inherited ultimately, the family business. Proper old money, okay, proper old money. You know, they'd had the queen for tea and all that sort of thing. But they had a business binder. So so anyway. And the guy one day came home, I call him John, just for the sake of it. We I happened to weave toe so friendly. And I was round their house. I was a young trainee structural engineer, bit naive in all sorts of ways. I hadn't had even thought about starting my own business. I don't think I was even qualified then. And I was round their house. I mean, this going back then this was probably a six 7 million pound house I think at 35,000 acres to see here is a fairly sizable chunk of land in the house, waiting for my wife and anyway, John, come home, the column job. He popped home anyway, so I was sat waiting, and he saw Hi, how are you? You're a bear So thanks very much. And he really friendly, super friendly it was written. And I rather naively said to him, because he'd come back from London. I said, Oh, I bet you made a fortune today is a bit. You know, it was a bit naive at that age. But I did I did. You know, he had a Range Rover and a Porsche and all these all these trappings that you just looked at as a young lad or thought, the big house with the pool and all that sort of stuff, which, you know, later on I got, and I often love how naive I was. And he said to me, Ronnie said, No, he said, I didn't earn any money today. Because the way Wow, there's a bad day at the office, isn't it? And I thought, Well, I'm not doing too bad on my apprentice wage sort of thing. And he said, No, but I made a fortune. And it stuck with me. And he never explained it. But I worked out quite what he said quite quickly. And so. So I sometimes tell that story to people. But I think the thing is, you just have to demonstrate it, particularly with industry professionals, it's about it's about numbers, calculate your hourly rate. What is your hourly rate, that's all that's all it comes down to it's not complicated. So you know, if you do your own shopping, so my business partner, Ian's written a terrific book called Time Machine, all about it breaks this down your hourly rate. So he said, if you go and do your own shopping, it takes a couple of hours to go down to your local supermarket, whatever that might be in this country Morrison's your Waitrose, your Sainsbury's etc. To get that all that food and take it back yet, you could probably online order it, or the same food, probably, let's say it takes a half hour. Okay, probably take less than half out. So I've now got. So whatever, it's going to take a half hour. So now I've got an hour and a half, and it might cost you a five pound to get it delivered. Okay? So what you've just worked out, is your hour and a half is worth five pound. Even if you said it takes you an hour to order it, you've just worked out your extra hour to go down and buy it is worth five pound. That's your hourly rate. And you begin mid rates a lot more than that, right? We'll do something different with your hour and pay that delivery driver five pound to get you there. So what's my hourly rate, sometimes I drive to events, sometimes it can a driver? Well, if I'm driving to an event, and it's four hours, this, I don't do it for four hours, I can't do anything apart from making phone calls. Whereas if I've got a driver who I might pay
20 pounds an hour,
and I'm sat in the back, I can work. So you know, my hourly rate is not 20 pounds an hour. So why Why am I not employing a driver? And it comes down to that concept of getting that concept. And that same argument that I said that I will put to project managers always say okay, how much is well, first of all, have you got the ability to do the job you're gonna suggest and a lot of architects think they want to project manage their own jobs. And on track to engineer say the same. No, you're not a project manager don't do it. But it does always come down to and I do a deal analysis with them. I get them to do it. We have a deal Analysis template that they fill out. And then you identify their professional industry fee. And then I just look at that compared to the profit as you say 30,000 or 300. You have a choice. You have a choice, as the numbers do the talking. And then I just said people, you're better than that. You're now a CEO. I started on the drawing board. I had to make the boss's tea. I had to clean the toilets when I was 16 that was what we did. That was the stuff we had to do. You know and you know, why don't why don't I make the boss's tea anymore? But apart from that not the boss Well, why don't I clean the toilets? Because I can get a cleaner to clean the toilets. It's leverage and all we get stuck in or or other potential students might get stuck in is they don't move forward. So we just have to have all those these ridiculous things like we're surely you don't still clean the toilets as you did when you're a junior when of course I don't? Of course they don't. So it's that sort of concept. So
there's the crane, a leveraged a leveraged business as a property CEO. What sorts of challenges do you see with people actually starting their first developments?
Procrastination. That's the biggest challenge. Okay. Because the biggest challenge is
can I do this? Should I do this? Oh my word. I'll do it start tomorrow. This is difficult this even for very experienced and industry professionals. That procrastination linked with impostor syndrome. Okay, because, really, as and I'm going to take me seriously As a developer, I'm not a developer. I say Well hang on a minute. Look, Richard Branson, Richard Branson, when he started his cruise line company, when he went to have that meeting to engage to someone to build the ship for him, or the team that were going to market or wherever, No one sat there, I looked at Richard Branson said, Well, hey, hang on a minute. You ever run a cruise line company before? You know you not even got your captain's license? I don't even think you've been on a boat. You know, he might not even like boats. But he's a businessman. No one questions him. And that imposter syndrome. So that's their biggest chance, they're gonna get over that there are some technical ones. I'll talk about those in a minute. But the biggest ones is get over the mindset problems. Okay, my business partner is terrific at solving those. And we used to have this this joke the first six months, they'd knock on my door for the technical and a second six months, they realized that mindset was even more important a knock on Ian's door. Yeah. So you've got to get over that impostor syndrome, you've got to get over the procrastination, you just got to stop it, the great the great process of one step at a time, just take that first step, then take the second set. So don't think too much about the fourth or the fifth or the sixth mindset. But then beyond that, the problems they get as an entrepreneur. The question I always ask entrepreneurs, right, is are you coachable? Are you coachable? And the reality is, a lot of entrepreneurs aren't coachable. Until a few things go wrong than they realized they are coachable, they should listen to what we said, is following the system. I often talk to people who are cost us, you know, McDonald's and those types of businesses successful. Not because everyone likes their burgers, you know, or everyone likes their coffee is because they have processes and systems developed around those business from years of the school of hard knocks, and people just been there, seen it and done it. So I have a system, I have a set of the eight pillars, you know, credibility and brand is the first pillar business structure, company structure, business plan, leverage professional team, finance, you know, deal sourcing, deal analysis, etc, etc. All these pillars. What people often don't do is follow those processes. They don't follow the process. If you follow the process, from beginning to end and do all the things we tell you, then you're more likely to minimize your risk because there is risk involved, you can't deny those risks. But that's where people will get themselves in trouble. I did a I sometimes do it with students, I do often do a lot of washed up meeting. And I have one with some students, literally this week, okay, as we're recording it this week. And I said to the to the two students, tell me what you think you've done wrong, and we had a three hour meeting. I don't always do this. But with them, they made a few mistakes. And they listed out everything they done wrong. And I said, Well, that's terrific, isn't it? Because you now know what you've done wrong. And primarily, they didn't do some of the things I told him to do. And so I think that's the biggest challenge. The challenge in terms of getting the thing going is finding the deals, and understanding deals and understanding how to analyze deals. That's the biggest challenge. People think the biggest challenge is finding the money or finding the team, but it's not it's actually finding that deal and making stuck up with that and getting emotion out of it. Because because people get emotional if they're going to answer to 300,000 You have to strip that out because emotion takes over sorry, interrupt I
thought that was what you were gonna you were gonna lead with actually was the most the biggest challenge is finance and was quite taken aback that actually the biggest challenge is procrastination, just not doing anything at all thinking about it, analyzing it, which areas should I look at looking to? I'm not, you know, I'm not ready for this or whatever, whatever version of that. And, and, and I guess as well, actually, a lot of people will use the excuse of why don't have the money to be able to do development.
With with money, let's talk about money. Okay, the thing I say to money about money to people? Do we accept the UK right now, particularly, there's plenty of money out there. And most people go into there, it's so I said, the only problem is it's in someone else's bank. So you just got to get it into yours. If there was no resource out there. If there was no money out there back in 2008, there was a some challenging time, then it'd be difficult. So all you need to know is how to get it into your bank. But the bottom line very, very simply, we're even where interest rates are where they are now, your capital deposits in a bank might earn three or 4%. And as an investor, if you can offer someone 10% to three times what they're getting. They're going to be interested at all. It's a win win. And the commercial money fundamentally is that in the same position, there is more money out there than deals and here's a mindset shift. The mindset shift that people have to make is the money is subservient to them. They're not subservient to the money. People go in subservient. They their shoulders are down, and it's the bowl out in hand. Please can I have some money with the reality is actually that we're around people with money. Do not have people knocking on their door every week saying hey, how can I give you 10% return on your money? The person with the deal, which is you as a developer, if that's what you choose to do is the one with the opportunity, not the money. It's a whole reverse psychology. And when you get your head around that you go actually, the money's not a problem.
It's the deal. That's the problem. And once I've got a deal, I will get the money. Wow, that's really fast. That's Whoa, did that take you back? It did. A really did you see? No,
it really did. It really did. Because it's like,
let me add to this concept okay for you, because this will make sense. You do not ask for money. Apart from the fact you can fall foul of the FCA Financial Conduct Authority rules in the UK. Don't ask for money because let's say, let's say Raju rang me up and said, Hey, rich, I got an opportunity because it is an opportunity, as I say, would you lend me 50,000? Now I'll be thinking, Hmm, who else? Ryan, have you asked before? You've asked me? And I assume they said no. And that's why you've come to me. And that's the what people will do. And so the reality is you position yourself. So Ryan's, so you're on your developer, we rock up and we chat. And I go, Hey, how are you? I'm seeing you for a good few months. Yeah, I'm good. Brian says, Yeah, I'm good. So what are you up to? You say? Well, to do some development? Now I've transitioned to transitioned Okay, into property development? Oh, wow. Yeah, it's a real natural progression of transition for me being in architecture, and I really wanted to help deliver some homes in the UK and, and fulfill that housing gap in the natural thing, oh, well, what sort of things you're doing. And you might say, to me, Well, I've got, I've got an old warehouse, just down in south London, I'm going to convert to, you know, to seven flats, I've got a scheme up in Bristol, I'm looking at as well, which was, it's an old hotel, in fact, we're going to convert that into into some, you know, supported living, and it's great. And you're just going to drop into conversation. Ryan, you're gonna say to me, and, and yeah, it's, you know, what I like about the model is really good, because I'm working with some great friends of mine, who have invested in the business, and they're getting some great returns on their money, which they wouldn't have got in the bank. So it's a real win win. And what a pleasure that is to help other people out. So yeah, that's the sort of thing I'm doing. Now. You've just planted a seed, and if I've got some money, and if I like you, I might ask you, if I've got no money, and I go, wow, that's really interesting. Well, hey, look, we must read again. So I've got no money, or I'm not interested in you. If I'm interested, I go, Hey, tell me a little bit more about the money thing. That's a buying signal. I'm interested in buying into you, okay. Or do you know, I might have someone that might be interested in other buying signal, which might be I'm interested, but I'm not going to tell you. I'm interested. But I'm going to portray it as a third party. And so that's that's the process. You didn't ask for it. All you did is you told me what you did? Did you get that concept? Just very high level? Yeah. Yeah,
absolutely. Absolutely. Brilliant. I love it. I love I love that kind of total rewiring of you know, it's not about going and getting money, you're actually creating opportunities. That that's that very powerful. That's, that's making money. Like you've created an idea, you've had an idea, you've created something, you create an opportunity you've, you've connected, you've made connections between resources, and then you're presenting it in an intelligent manner for the people to see it as an opportunity for them to,
to buy into.
It's what I say, in lots of ways. Okay, this is this stuff is all simple. But it's not easy. Yeah. But it is simple, isn't it? I mean, I mean, it takes you back. And I'm sure there'd be a lot of people listening to this podcast. And then it'll take them back in the same way. But actually, this isn't rocket science. This is nothing complicated. And with a bit of guidance and bit of support,
you could do this.
Amazing, amazing, unfortunately, we've come to the end of our conversation here when I'm coming up on the hour on the hour mark here. And it's flown by absolutely fascinating, Richie really, really inspirational kind of mind blowing. Interesting. And I think a lot of architects, developers, will be very keen to get in contact with you how what's the best way for people who will listen to this podcast and want to find out more about what you do working with you? How did they do that?
I just google google my name if you want Google Richie collapse and don't forget the T or find me, or property ceo.co.uk property ceo.uk And you'll go to our website, obviously on all the platforms, LinkedIn, Facebook, etc, or pop onto YouTube, type in properties here and go to our YouTube channel. A lot of our podcasts and interviews are on there as well. So lots of different avenues to find or just look around the UK if you're in the UK, I speak all around the country pretty much every month different venues. So check me out, come and see me come and
say hello, amazing. I'll put all those details into the info of this podcast, Richie an absolute pleasure. Thank you. So much for being on the show today. Thank you for having me. And that's a wrap. And one more thing. If you haven't already, please do head on over to iTunes or Spotify. And leave us a review, we'd love to read your name out here on the show. And we'd love to get your feedback. And we'd love to hear what it is that you'd like to see more of, and what you love about the show already.
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