1. DAN AND NIKKI HALL
REAL ESTATE INVESTMENT FORUM 2011
HOW TO FLIP A HOUSE AND MAKE MONEY

2. never as easy as it looks; nothing glamorous about it
WHAT YOU SEE ON TV IS NOT REAL!
never as easy as it looks; nothing glamorous about it

3. REAL RISKS!
People don’t line up to sell you their houses at 50% below market value
Requires considerable time (double it) and money
The economy is capitulating and who knows the effect that will have on the housing market
You never hit your budget estimates

4. THERE GOES THE BUDGET ESTIMATE!

5. GOT THE STOMACH? Secure financing BEFORE you look at houses
Banks typically don’t finance construction costs
Choose a specific neighbourhood and stick to it
Line up your trades

6. THE BUY High margin - low risk?? Dream on....
Margins typically greater in new builds than renos
Don’t pay for someone else’s renovation. The worse the better!!

7. THE BUY……
Competition is fierce
Competing with end-users who don’t have to factor profit, RE fees in their offer price
Review comparables, but don’t be fixated by them

8. INSERT PICTURE OF FISHLEIGH *

10. WALK AWAY RENEE...
Unlike most of the rest of the world, Vancouver and Toronto remain hot Real Estate markets
Don’t get caught up in it - stick to your price

11. THE BUILD
Create something that adds value to the property and use it each time if you can….

13. BOXES AND SUCH

15. VALUE PROPOSITION?
You have to add value to differentiate yourself from the thousands of others doing this
Design, but don’t over design

18. FLIPPING TODAY? Skyrocketing purchase prices Higher construction costs
Capital gains / HST / Tarion / Homeowner Protection Office (HPO)

19. NOW LET’S GET BUILDING!!

20. CONSTRUCTING YOUR INVESTMENT 101
Create an idea file for design
Choose a builder/ contractor
Sign a contract that works for you
Know your role in construction
Have a clear vision!
Reality Check
Know your soft costs
Know your hard costs
Factors that influence cost
Know where to spend your money
Partnership
Agreements

21. HAVE A CLEAR VISION
Be clear about what you want to accomplish

22. PRE/DURING/POST CONSTRUCTION

23. NOT-SO-REALITY TV Beware - what you see on TV is NOT always real.
Estimates are fluffed to fit the storyline.
Building is stressful – your house will be a mess, it will always cost more than it does on TV. This isn’t television; this is reality, and it’s YOUR reality.

24. KNOW YOUR SOFT COSTS OF CONSTRUCTION
Architectural and engineering
Permitting and planning
Design
Insurance and legal
Carrying costs (heat, hydro, mtg)
Potential furniture display/staging
Real Estate commission
Purchase price (down payment, mtg)
Land transfer
Property taxes
Management fees

25. 5 MAJOR STAGES OF CONSTRUCTION HARD COSTS

26. FACTORS THAT CAN INFLUENCE COST
Level of design – how difficult is it to build
Level of finishes
Revisions to the original plan
Unforeseen site conditions
Duration of construction: Time = Money

27. KNOW WHERE TO SPEND YOUR MONEY
TOP 4 ROI POTENTALS
Bathroom renovation (75-100%)
Kitchen renovation ( %)
Interior Painting ( %)
Exterior Painting ( %)

28. TEN AVERAGE ROI POTENTIALS
Roof shingle replacement (50-80%)
Furnace/heating system (50-80%)
Basement renovation (50-80%)
Recreation room addition (50 -75%)
Installing a fireplace ( %)
Flooring (50-75%)
Construction a garage (50-75%)
Window/door replacement (50-75%)
Building a deck (50-75%)
Central air conditioning (25-75%)

29. PARTNERSHIPS AGREEMENT
Make sure that all of your partnership agreements are in place prior to purchase or immediately thereafter
Review title searches for all proposed purchases
Eliminate all personal liability as best possible
Always refer to legal counsel

30. CREATE AN IDEA FILE FOR YOUR DREAM HOUSE
Clip ideas from magazines
Search international design blogs
Visit model homes & showrooms
Visit Home and Design Shows
Drive through neighbourhoods
and take pictures
Watch design shows and take notes
Relax with a glass of wine, some grid paper, a ruler and get creative
with floor plans

31. CHOOSING A CONTRACTOR
Get multiple bids or quotes - 3 or more bids will give you a rough idea of the going rate for your project
Remember that in the long run, cheaper isn't always better
Get references and actually call on them

32. CHOOSING A CONTRACTOR Are they businesslike and professional?
Will the contractor be on the site him/herself ?
Are they licensed and insured?
Will they provide a written warranty?
What is their level of experience ?
Get a commitment on timeframe for the duration of construction.
What type of contract are they operating with?
CCDC Canadian Construction Document Committee (built by the Canadian building law)

33. TYPES OF CONTRACTS USED IN CONSTRUCTION
LUMP SUM
Fixed Dollar number
Turn-Key construction process
Less unforeseen conditions (in contract) contractor takes all the risk and total control
COST PLUS
Proposed budget / working budget
Books are open
Owner has option to pay trades directly
Management fee %
Field Supervision $

34. YOUR ROLE IN CONSTRUCTION
Develop a trusting, working relationship with your contractor
Be available during the day to make decisions – this is important not to slow down the process!
Take the time to work through issues with your contractor – there are no problems, only solutions!

35. YOUR ROLE IN CONSTRUCTION
Walk the construction site regularly and ask as many questions as you can.
Be prepared for a lifestyle change throughout the duration of construction.
Make sure to pay your contractor on time – ( We are not banks)
Know your finishes and longlead items

36. KNOW YOUR FINISHES AND LONGLEAD ITEMS

37. TO DOWNLOAD A PDF COPY OF THIS PRESENTATION
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