All Forum Posts by: Cody Hill

@Hemant Chauhan

Hey Hemant,

We did pay the contractor in sections as they completed jobs. We then kept all the invoices and receipts to turn into the bank afterwards. I went to my bank and was able to get a personal line of credit as I didnt have the money at the time to fund the reno. Not the greatest interest rate as it's not a asset backed line of credit but better then credit cards.

The process was fairly simple, mortgage broker was able to do the majority of the work. Had to get a formal quote with bids for all the items we planned on doing from the contractor. The bank just sends someone out after the work is complete to make sure it was done as said, they send the report back and you get paid.

I'm sure if you talk to some contractors and let them know ahead of time what you are up to they would wait until the job is done. For them its security knowing they will get a set amount of money when the job is done as the bank is the one paying them.

@Hemant Chauhan

Hey Hemant,

We did pay the contractor in sections as they completed jobs. We then kept all the invoices and receipts to turn into the bank afterwards. I went to my bank and was able to get a personal line of credit as I didnt have the money at the time to fund the reno. Not the greatest interest rate as it's not a asset backed line of credit but better then credit cards.

The process was fairly simple, mortgage broker was able to do the majority of the work. Had to get a formal quote with bids for all the items we planned on doing from the contractor. The bank just sends someone out after the work is complete to make sure it was done as said, they send the report back and you get paid.

I'm sure if you talk to some contractors and let them know ahead of time what you are up to they would wait until the job is done. For them its security knowing they will get a set amount of money when the job is done as the bank is the one paying them.

@Alexander Zabiuk

I actually ran into the same problem with my first house. I bought it before I knew anything about investing and of course locked into a fixed mortgage. I lived in it for a year (with roommates) and rented it out for the last 4 years now and am just coming up on a renewal. Luckily this was a newer home and I really had no issues to deal with and my tenants were able to cover the mortgage, taxes and half my insurance on the property. They also had the utilities in their name. With all that being said it doesn't look to be a complete loss. I only put 17k down as an owner occupied home (and paid down the mortgage myself for a year with help from roommates). I also had a brand new school go up walking distance away which gave me some appreciation. But after talking to a realtor and subtracting their commission I still aim to make 62k. Not horrible for holding a problem free property for 5 years!

The big first question to ask, is there a seperate entrance to the basement? The tenants need a safe point of egress if something were to happen in the house. 

The basement bedroom windows will need to be large enough with a clear path for egress as well. (you can get the exact sizes from the city website) 

Independent furnace and ductwork to each suite. 

Electrical needs to be able to handle the load from both suites.

smoke alarms through the house need to be interconnected as well as the carbon monoxide alarm.

Fire protection between suites and a few ceiling height restrictions. 

Also I believe there needs to be enough parking stalls for both suites.

You can find more info on any of this on the city's website but that gives you an idea of what is required. They also explain what permits will need to be pulled and all that info.

The biggest pro is the huge increase of rent you can get. I mean what other renos can you do to a house for 40-60k that will get you $1000+ more in rent per month! It can turn a house that may just cashflow into a house which cash flows $500+ a month. It is also very unlikely that both suites will become vacant at the same time so it gives you that added security.  

@Ken Didy

Good morning Ken, congrats on finishing your third suite! I am always happy to chat with other investors in the area, love to see what is working for people and what their numbers look like. Shoot me a message and we can for sure figure something out.

@Jacob Nicholson

Hi Jacob! I too am from the Edmonton area and your project sounds right up my alley! I am actually in the process of working with a seller on a off market deal as we speak to do the exact same thing with a bungalow.

I have also been tossing around the idea of finding a new contractor for this deal instead of subbing it all out myself. Anyone you can recommend for doing secondary suites?

Could probably do pretty well with str's but I would imagine you would need pretty deep pockets to get started. 

Happy to help! 

It is a pretty cool website, I like how it shows you the last sale price and when it was last sold. Even shows you some recently sold properties. I have been using it when driving for dollars and looking at off market deals. I have actually contacted them off the site about comps and they have been very helpful. 

I Have looked at a few foreclosures myself the last months and would like to follow this for an answer. 

Are you able to make it contingent on a walkthrough with your contractor for a scope of work to get financing? Speaking with a realtor in my area, that is what she recommended while I was talking to her about a property I found. 

Regardless would love to hear the answer for this! 

Www.honestdoor.com is pretty useful although I'm not sure where you are located and if it will work in your area.