Peter Packer: What it Takes to Begin a Business and Keep it Running
For someone with an extensive background in property development, beginning a real estate debt firm to fund developments instead was not top of Peter Packer’s mind for a business opportunity. In his own words, ‘we just kind of fell into it’. 10 years on and that business is thriving, but how did he get there?
You have a long history of property development under your belt now, but let’s start way back. How did you first enter property?
“I went straight into property development, all in land subdivisions. My first role was at Stockland, I spent about 3 months there as an Assistant Project Manager across three projects. I got to be a part of all of the project meetings and see how property development worked there.
My first full time job was at LWP Property Group, I got an Assistant Project Manager role there and for the first year I was involved in coordinating the development of near on 600 blocks of land a year, along with coordinating the fencing and front landscaping which was included in the sales contracts. The civil works contractor had an office on site, so I was the person who dealt with small variations that they put in when they were constructing various stages of Ellenbrook. LWP built an overpass over Gnangara road which was just getting started and I ended up taking on the role of coordinating that with the structural engineer and contractors. Those were the main roles, but I also got to sit in on all the project meetings, and I would often be given the job of following up on smaller tasks, so I’d need to contact the town planner on something or other, or resolve a matter with one of the multiple landscape architects. It was a good introduction into how the whole subdivision process works.
So then I got to work on two separate LWP projects, being ‘The Walk’ at Aubin Grove and ‘The Retreat’ at Port Denison, Dongara. ‘The Walk’ was a 300+ lot project and I got the job of being the Project Manager on that, which was good. The project needed to get subdivision approval and there were a lot of land owners in that area who had land but didn’t have sewerage, so we needed to come to an agreement with all these landowners as to who was going to pay for it – many whom didn’t want to! This involved lots of meetings with nearby developers, the Water Corp, the Public Transport Facility, and Main Roads planning for it, and following that, we needed to get on with awarding the contract and building an enormous sewer extension across the freeway, train line etc. That was interesting in just learning how negotiations work and how crazy the system is. That project gave me a lot more responsibility.
“They come and tap you on the shoulder and ask you to come into a small meeting room – a tiny little room…”
You were the project manager; did you have a big team around you to help?
On the project, you had me as the project manager, then a senior development manager, and the boss of LWP. But they had a syndicate that owned the land that had a whole lot of other high net worth investors, so we’d meet quarterly and give them an update on what was going on.
So that saw out my time at LWP. I heard that there was an opportunity to expedite my career progression with a development management role at Mirvac, so I got in touch and ended up working on their Mandurah subdivisions of Meadow Springs and Seascapes as a Development Manager, again dealing with surveyors, town planners, engineers, overseeing civil works contracts. Pretty much the same day as I joined there was an Assistant Development Manager start so all of a sudden, I had a boss role and someone beneath me, as well as a development director above me.
At Meadow Springs I ended up with some input on the huge Quarry park, which was an enormous landscaping job in an old limestone quarry, creating an exceptional space. Then in the north eastern corner of Meadow Springs I got some town planning design input which was exciting – so there’s some roads there which wouldn’t be the way they are if I hadn’t had the input on it.
Whilst I was at Mirvac both my projects got sold into Mirvac funds. There was a lot of reporting; two lots of internal monthly reporting within Mirvac and a third layer of reporting which went to the funds management division in Sydney.
So how did you end up in Sydney?
In my third year at Mirvac I really felt the need to get out of Perth because I had been in Perth my entire life. I got married in February 2008 and then a couple of weeks later we moved to Sydney and I worked at Mirvac on a resort/holiday home/retirement development called ‘Magenta Shores’ on the Central Coast which surrounds a world class Links Golf course. I was a joint Development Manager and we had a Development Director who was involved solely on that project, plus an Assistant Development Manager too. It was a decent experience, but I wouldn’t have wanted to work on that project much longer. I did a year there, and that took me to the end of 2008 when Mirvac had mass redundancies. The market viewed them as having too much debt and housing was slowing down so they needed to cut costs and didn’t need as many people anymore. I was in the second round.
“Dorado was actually meant to be a subdivision group.”
That must have been a confronting experience.
They basically just come and tap you on the shoulder and ask you to come into a small meeting room – a tiny little room – and they tell you that you’re getting made redundant and you’ll be getting a pay out into your bank account and good luck, really.
Where do you go from there?
I had intended to be in Sydney for two years, but we had a year there and it was more important to get a good role, so we were happy to move back to Perth. I hung around in Sydney for maybe six weeks, and started to look at whether I might buy some commercial property over there with dad, but that never really got legs so I ended up just doing that on the side while I was looking for a job – in hindsight buying small commercial buildings in Surry Hills and Redfern in 2009 would have been a very sensible move!
I had been given a tip off that working in the insolvency space might be a good way to go considering the way the world was heading at the time, and KordaMentha was the best real estate insolvency firm so I really targeted them. They ended up having a big receivership coming up in Perth and they didn’t have a real estate person on the ground there, so the role came up for me to take that. I ended up working at KordaMentha for a couple of years from 2009 until 2011, until I took up a full time role at Dorado. I got to learn a lot at KordaMentha and work on a lot of really interesting appointments. I’d say in a couple of years there I learnt more than my entire five years prior working with developers.
So before KordaMentha you were on the development side, and Dorado is over on the debt funding side of property. Is KordaMentha how you crossed over from development to debt?
No, Dorado was actually meant to be a subdivision group. That’s initially what Thomas and I thought our skill set was good for and that’s where we thought we could make some good money. We even put in offers to buy a couple of englobo blocks of land. Tim came into the picture a bit later but he went along with our thinking of being a land subdivider, but the first opportunity that came across our desks (not that we had desks at the time) was funding a project in North Fremantle. It made sense, it worked, it made good money, and it was a low risk way of structuring something with a first mortgage. So we did that and carried on looking for development projects. Then 3 deals came up investing in Karratha and Port Hedland which Tim used his financing skills to negotiate to a preferred equity position.
By this point, we were essentially four deals in, and we stared to see that we could generate returns that were nearly as good as equity but with much lower risk, so we just stuck to this path. Eventually the appeal of going and finding our own development site just waned and we concentrated on financing, so we kind of just fell into it.
Thomas said he went all in with Dorado after that 4th deal. At what point did you decide to go all in too?
When I joined, we had built up three fresh deals which were all happening, and we had recently just done a couple, so there was already some money in the pot which could pay me a wage, and some future deals to continue to provide cash flow, so it gave me that certainty that we’d be alright.
Did you always have a desire to have you own business?
I did, yeah.
“Doing it with three, we were very lucky that it worked”
From how young?
Oh, forever really!
Where did that come from?
Not getting told what to do, being my own boss and being in charge of my own destiny. One thing I always thought about was the ability to, if there was a nice day, to just not go to work and go to Rotto or something, although that hasn’t eventuated…
I think there’s a little bit of that kind of dreamy, unreal side to it that appealed. I think that just wanting to make something of yourself, create something and not have other people in charge was the main thing, and make some money doing it.
Looking at Dorado as a company, there’s a lot of focus on new tech. Where did that come from?
It’s funny actually, when I was at KordaMentha there was a retirement project that went into administration and was likely to sell quite cheaply for what it was. Tim, with one of his many other hats on, put an offer in – he literally just knocked up this letter to submit an offer, had a fancy letterhead and signed it off. It just felt like about 15 minutes after mentioning it to him, he had done all the research on it and sent his offer in. He’s always been very efficient and has just done things the way that’s the most effective rather than letting anything slow him down. So he’s got that mindset and anything he can find to make himself more efficient he will look to do. If he hears about something that can boost efficiency or better manage processes, he’ll note it down or flick an email around. He’s always been progressive with technology and wanted to try out new things. He’ll get something going and if it worked, we’d stick with it and if it didn’t, we’d stop using it.
What would be your advice to someone thinking of starting their own business?
I’m very much of the opinion that you shouldn’t do it on your own. Doing something in your own right is pretty bloody difficult, it’s hard to keep motivated and almost impossible to be good at everything. I think doing it with two people is a very tried and true formula. Doing it with three, we were very lucky that it worked; three is not normally an easy thing to do. So doing it with two people and really making sure you’ve chosen the right other person is important. A lot of people will go into business with a friend or someone very like themselves, but the trick with going into business with someone else is to find someone not like yourself. Nobody’s perfect and everyone has things they’re not good at so you want to find someone who’s good at the things you’re not, so they fill your gaps. You want someone who’s not just going to accept what you say but will question why you’re doing something and challenge you. Obviously you need someone you get along with though!
If you do want to start your own business it has to be something you’re passionate about, because people that just do something for the sake of it or purely to make money tend to fail. Obviously, people start a business with the intention to make money, but a business will generally only succeed if you’ve got that passion for what it is you do.
Thomas told me that when people challenge him he gets stubborn and that’s kind of how he gets through stuff and moves forward. What’s your version of that?
I just want us to be a success, and to be seen by the industry as successful. I really enjoy meeting and dealing with our diverse group of co-investors who have made their money through all sorts of different sectors.
Are you a routine person or do you prefer to wing it?
I’m more routine, yeah. I’m definitely someone that if things don’t go to plan, it irritates me. A long-term work plan for me would be a couple of years I suppose.
“You get to have all these amazing real life learning and business experiences without having to experience them yourself.”
I guess past that it’s difficult to plan much.
Yeah, basically. So I have goals for what I’d like to achieve in a 1-2 year period. I’ve written down a list of goals for this year but haven’t actually decided if they are my locked-down goals or not, so I guess they’re like ideas for goals.
So like themes?
Yeah, that’s right.
So what is it that’s taught you the most in your work life?
I didn’t learn much at uni at all. I did marketing and management as my majors, which are too hard to try and learn over a few years and then go out and do; you’re better off just learning those things on the job. I did do a couple of business law units which I enjoyed. If I had my time again I’d do a finance major. I’m glad I went to uni because I enjoyed the time – in a way it’s the best time of your life really; you have no responsibility at all, you just have a good old time. But I absolutely by far learnt the most I’ve ever learned working at KordaMentha.
I guess it was completely different to your other roles, even though it was in the same broad industry.
It’s just… real life case studies, constantly, and a huge number of them. So you’ve got the case studies you’re working on, and the case studies other people in the office are working on that you get to see, and in other parts of the business. And then you’ve got highly intelligent people working there that you can lean on for advice and learn from. You get to have all these amazing real life learning and business experiences without having to experience them yourself.
You saved yourself years.
I would highly recommend anyone work in an insolvency firm for a couple years, for anyone in business whether you’re a property developer or a landlord, because you also get to see how the banks work.
“I think there’s a real FOMO thing to emails and getting over that is important.”
It’s a bit of a mystery to people.
Yeah, by seeing how the banks think and operate you can learn a lot more about, when you do borrow money, the best way to treat a bank and how to get out of trouble if you do have a loan in default, so for any budding landlord or developer a good first stop would be an insolvency firm. I know I was very lucky because I was there at a time when there was a particularly large amount of carnage, but even now it would be beneficial.
I know there’s some people that subscribe to work life balance and some that prefer to integrate it. What do you prefer?
Tim is integrated, but that doesn’t work for me the same way it doesn’t work for Thomas either. I find if I do that, I end up with my mind moving back to work mode, so I prefer to balance.
The way that I work is that I have all of my email notifications turned off, so the only way someone can bother me is to ring or text me unless I manually check my email. If I’m away, I check my email once a day, usually in the morning, and I go through the emails and then don’t touch them again. This then gives me a completely clear day thereafter without thinking about work. I never take a computer on holiday with me, ever.
So that’s holidays, what about normally?
I do need to get a bit better with not checking emails at night. The problem is that I try not to work long hours. A lot of people would start work at 8.30 and work till 7 at night, whereas I generally get in a bit before 9 and work through ‘til 5. The problem is that, amongst everything else, it is difficult to get through all of your emails in that time, so if you then don’t check your emails at home and clear them out you have all those emails left over from the day before, and by the end of the week you have heaps and it’s all disorganised. So there’s a difficult balance between working less hours and then also thinking you can’t check your emails at home.
The way I’m dealing with this at the moment is by just working more efficiently. I’m trying to minimise my use of email at work, so I’ve unsubscribed from a lot of things that I don’t need anymore and set up filters in my email. I’m trying to get my inbox to a point where it’s just relevant. I think there’s a real FOMO thing to emails and getting over that is important.
My unread emails used to be tasks for me to do, but now I’ve taken to using Droptask as my main daily to do list, and it seems to be working well so far, meaning an open email inbox is no longer an integral part of working life.
One of Dorado’s priorities is to make sure that everyone that works here is mentally well. How do you keep your mental wellness in check?
If I’m at work I tend to want to be working, but I get that wellness outside of work. Thomas for example integrates exercise into his day, but I’d rather have a quick lunch break, get through my work and then leave on time. I don’t think I do long enough hours to warrant needing to integrate a big breather into my day, so I try and do that at home.
I do ride to work once a week. Because I’ve got two young kids, it is hard to find time to go out and exercise in my own right so if I’ve got to drive to work it’s only about another 5-10 mins to ride instead. It’s really nice not taking more time out of my day but keeping fit and helping have that balance.
I don’t actually really have any major ‘hobbies’, aside from riding. I do have a mountain bike event in Albany later in the year so that gives me something to make sure I’m ready for. Other than that, it’s spending time with my family. We’ve got a dinghy I was heading out with the kids in over the break, so we went out exploring on the river and crabbing.
But yeah, I think just trying to make sure I’m not stuck doing big hours and trying to work out time at home, so I’m not distracted by work and my phone.
“Higher staff numbers is something to be proud of but also something to be a bit scared of.”
So, when you have a few spare moments, how do you choose to spend them?
Part of my new organisation strategy for this year is that if there’s an interesting article that’s sent around by someone in the firm, which happens quite often, I have started opening the article and printing it. Then I will have a pile of printed articles that I can read whilst I eat lunch. So that’s a way of decluttering my email and going back to a bit of the old school stuff.
What is your proudest moment so far?
When I go to one of our internal planning/strategy days and we’ve got everyone there. I did look around the room at the last planning day at the amount of people and thought… Jesus… I guess it’s pride that we have a company that’s become a much bigger group now. Funnily enough – something I never wanted to do originally.
Did you have a limit?
Yeah, I did!
What was it?
10! Higher staff numbers is something to be proud of but also something to be a bit scared of.