According to Bobby Purba of BDC Homes, who has built many multi-plex and multi-generational homes, talking about generational wealth and real estate can be tough, but says these conversations need to S.U.C.K. Sharing insight on the new multiplex legislation, listen in as Bobby offers tips and recommends the professionals to consult before you start unlockinh your home equity.
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About the Speaker
Bobby Purba: BDC Homes
Bobby increases value on existing properties and creates investment and development opportunities in real estate, specializing in building and land development for the greater Vancouver area. Bringing years of experience in custom, laneway/coach homes, duplexes, multifamily and multi-generational development, he is also experienced in major renovations for both residential and commercial use. Bobby has the skills and team needed to manage projects of all sizes and shapes.
His company BDC Homes has been established for 15 years. Working in communities such as Vancouver, North Vancouver, Burnaby and Coquitlam, Bobby’s focus is on maximizing value for his customers and partnering with them to achieve a common goal. It does not matter if that goal is increasing property value, creating cash flow from rentals or smart investment strategies. His eye for detail and organizational processes keep teams on budget and task, finishing on time and budget.
Understanding that building and renovating is a large financial investment, Bobby and his team pride themselves on providing a personalized, hassle-free experience to get or guide you through the process of obtaining financing. Bobby makes it as simple as possible for your next project to get off on the right foot and make it over the finish line.
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Here's the Full Transcript of this Episode
Transcript: 63_Generational Wealth
JENNIFER-LEE:
Hey, Mike, we’re back with season seven of HAVAN’s podcast, Measure Twice, Cut Once.
MIKE:
Hey, Jennifer Lee, it is great to be back. It’s another exciting season looking at building and renovating high-performance homes, looking at energy choices and some of the components that make up some of the homes that we’re building today.
JENNIFER-LEE:
Yeah, and it’s also very interesting to learn about new housing legislation as well, because it definitely impacts homeowners and the potential to unlock home equity.
MIKE:
One thing we’ve learned hosting this show for now seven seasons is there’s been a lot of changes to how we build homes and how we approach housing, including a bunch of new legislation that is impacting people like me who already own homes and some of the things we can do with them, which is really why this is going to be such an exciting conversation today.
JENNIFER-LEE:
Yeah, I’m excited for this guest. And of course, new regulations are coming, Mike. And we have a stellar lineup of industry experts for this season to walk us through the latest in the world of housing and the new provincial legislations that are going to benefit people like yourself.
MIKE:
Well, ideally, they benefit all of us, but I’m excited to welcome back our guest. Bobby was our guest in season, what was it, season two? It feels like 3 million years ago. Episode 18. And I absolutely love Bobby. We’ve worked together on projects in the past. And one of the things I really like is that Bobby started to shift his business to take advantage of some of the new legislation, help people like me figure out and decode some of the things we need to take advantage of these opportunities for us here in British Columbia. So welcome, Bobby. It’s great to have your back.
BOBBY:
Yeah, thank you for having me and grateful to be back once again.
JENNIFER-LEE:
Yeah. Well, Bobby, let’s hear a little bit about yourself because, you know, we’re on season seven now. You were here on season two. So, what’s new? What’s shaking? A little bit of Coles notes version. Speed everybody up.
BOBBY:
What happened the last few years with Bobby? More white hairs. I think it’s been opportunistic to understand the market space and where we’re headed with the legislations that are now coming down the pike, the zoning changes and the shift in the market space as we went through COVID, moved through the rate changes and all the mortgage challenges and all the equity that people have. The conversations we had in, was it season two? you know, so much has evolved in the market space around that. So like Mike said, how do we unlock that? How do we get to the equity? How do we combine that with the zoning to thinking about developing?
JENNIFER-LEE:
And why should we listen to you? What makes you an expert?
BOBBY:
I think many of my colleagues are better than I am, know more than I am, and are very knowledgeable. I mean, for me in our business, BDC Homes, it’s really around consulting. You know, having that candid conversation around what are the possibilities for your home? What are the possibilities for your family? And when we dive into multiplex here, there’s a lot of facets that haven’t been needed to be explored before and the conversations that we must have internally. So, we’ll touch on that. Looking forward to sharing.
JENNIFER-LEE:
Awesome. Now that we know who you are, who your company is, let’s talk about Mike, which I know this is a favorite subject of both of ours right here at this table, especially the guy down at the end. Okay. So, Mike is a perfect example of this. He has a great family. He’s got three adorable children that Mike might beg to differ there, but most of the time, most of the time they’re fairly adorable. Right now, they’re living with him, and you know, are probably going to live with him till they’re 40 or later. And he’s got an amazing wife and he’s got a property and an aging house that he’d like to make a little bit more manageable, a little bit newer, but also help other families and maybe even some of his children out if he allows it. So, let’s start with that. If Mike wanted to build a multiplex, first off, what is that and why are we all suddenly talking about this?
BOBBY:
So, I’ll start with an acronym, because in my previous life in the corporate world, everything was a three-letter acronym. And for today, we’ll try to drill that down to one letter. So, it’s going to be S-U-C, suck. So, Mike’s going to have to have those more supportive conversations. more understanding and more compassion. And maybe we can throw a K word, kindness as well. And in the context of zoning changes and all those things is we can talk about building construction cycles, design, interior, exterior, architecture. We can we can do all that fun stuff. And that’s great. But with multiplex and getting four units on Mike’s property, likelihood is potentially six. And some of the clients we’re chatting with at the moment That conversation really has to go what I call, you know, if I can call it an umbrella, right? The umbrella of the family, the inheritance model, what is that going to look like? And those conversations, they might suck a little bit, right? Because in that difficult conversation, things are going to come up. Because we’re talking about inheritance prior to somebody, say, passing on that asset to their children or to a loved one, where these people are likely alive.
JENNIFER-LEE:
Well, I was trying not to kill Mike off in this conversation. Let’s wait till at least season eight for that. But I guess it’s something, even though Mike’s a young guy, him and his wife, young family, it’s something they’re going to have to think of if they live there for a long time, too, who eventually gets it.
MIKE:
Well, we’re all getting older and, you know, this speaks a lot to when we first started hosting this podcast, we were talking about just doing a renovation, doing a single unit, and that just you know, as we are in a position where legislation is changing, we have to roll with those changes. And There’s good and bad in that. There’s good in it because I’ll be able to have my kids with me when they get older. But the challenge is, it’s not like building a regular house. There’s so much more to it. So, for someone like me, it’s not the same process. So, can you talk about what might be different for me doing a multiplex versus, say, tearing down my house and doing a single-plex with a suite, a single suite in it? So, this new style of building requires a new style of methodology. Let’s dig into that, because I think this is really important to understand for anyone looking at a project like this.
BOBBY:
Yeah, and digressing to your comment, what’s changed? That’s a major change since last time I was here, is we had the conversation on renovation or extensions to home, or potentially a duplex. Now we’re talking four-plex, six-plexes, potentially. So that’s double or triple the opportunity. Now, how do we make sense out of that? How do we drill it down to executability, if we can call it such a thing, right? We’re not talking about assets. much larger asset. And most of the lending that’s going to happen here is going to be based, is going to be an asset-based loan. What do I mean by that? Well, if we take this scenario, Mike builds this beautiful fourplex, the children all live happily together. And a suite for Jennifer. And a suite for Jennifer. Now, what happens at some point, they may say, hey, you know, let’s keep this building because we’re building apartment buildings, essentially. Yeah. Right? It’s a multiplex. It’s not a duplex any longer. This is double that. So, what happens to this asset when the child says, I’m married, and I got two kids, and we don’t want to live here anymore? Does the family decide to keep it as a trust asset for the family? Do they turn to go and sell it? So, there’s all these different variables now where, you know, CMHC, for example, or a lender, depending on which path you go down, is thinking about the tax structure too, right? If we sell it, what are the implications of capital gains if we’re under CMHC? If we hold it as a family, how do we manage our taxes and what’s the benefit to the family of that as a multi-generational asset in the home, in the family? The conversation changes, is my point.
JENNIFER-LEE:
We have to like explore those options because I think that’s the thing is like this new legislation sounds great and it’s awesome that we’re building more. But I think they make it sound so easy. Like, for example, like what if Mike gifts me, because he’s so lovely, a lovely laneway home on his property and I’m in it. And then I decide to have my own adorable family one day as well. And I leave that laneway house. I think a lot of people are thinking it’s like they can own it because that’s the way it’s being rolled out. But is it that easy for me to sell a portion of that?
BOBBY:
No. So the conversation is… has evolved. The clients we’re talking to and some clients we aren’t onboarding because the structure has become complicated and the timelines don’t work out for our construction schedules, right? So, if I drill it down to, let’s call it the family umbrella or the inheritance umbrella, and we talk about the foundational pieces inside of that and how do we look at this property? Because I’m going to put developing and zoning and those things, just park that for a moment. We can come back to it. But I want to just focus on the financial structure. Right? Equity. Is this property fully paid off? The lender is going to look at this property as an asset, as an asset-based loan, as I mentioned earlier. And as equity investors, we may need, hey son, I need you to pony up for this property. Hey daughter, I need you to maybe, you’re going to move in from McGill, sell your condo, finish university, you’re going to move in. So now we’ve got these proportional shares happening, right? Whomever is owning the property and sharing this property, develop it into four or six units, may need some investment there beyond the inheritance value. Okay. So, what changes there? Well, now there’s a legal structure. Now we’re going to be talking to a lawyer and saying, hey, listen, do we create a trust agreement? Do we have a bear trust agreement? How do I hold this property collectively and share while I’m still living and breathing here with my family members?
MIKE:
This is really interesting because we haven’t even started to get into what we’re going to do to do all of this. But most of the time we’re talking about, do you have a designer? Do you have an architect? Have you figured out which builder you’re going to work with? Where are you going to build it? Here, we’re not even saying those words yet. We’re talking about things like wealth advisors, tax advisors, accountants, and lawyers. And it’s kind of the inverse to how we’ve done it. But in some ways, it’s forcing us to think about our fully formed future now, as opposed to reacting like we traditionally have. So that’s actually a really, really good thing. So, what I’m taking from all this is there’s a significant amount of front-loaded due diligence required for me to do this project. Before I’m even talking to my designer friends, I should be talking to my lawyer friends and my financial advisor.
BOBBY:
Correct, and that’s why I was sharing that acronym, right? You and Pam are going to have these conversations and you’re going to have to support each other to understand each other better because you are making longer term decisions here. This was the whole SEC thing I shared earlier is the communication, the compassion, and really trying to understand where are we headed with this. The zoning is great. The province has come out with some bills to support it in many ways, but it’s going to be foundational communications inside the home.
JENNIFER-LEE:
Well, and that’s the hard part, too, because I didn’t even think about that. So, Mike’s children are young, so they’re not going to be owning properties anytime soon. But until they get to that age to and say Mike builds us a suite, is he then going to put renters in there? And how does that work? Like, do you still have to have the kids like in mind with like giving them a piece of that pie? Does that have to be done up front or can it be done later? Like these are things that we don’t think about.
BOBBY:
Good, good, good, really point. So, if we just drop to the finance piece and you put the lender’s hat on for a moment, which I’m not a lender, just qualify that right out straight from the beginning, is their view is going to be of how will rents fall into this properties being as a valuable asset in their portfolio. It’s going to be a rental equation in there because like I mentioned earlier, the kids may move out at some point. So, beyond the equity position, the rents are going to be factored into how does this property maintain itself? Because like I said, it’s going to be like a little apartment building in many of them.
JENNIFER-LEE:
And like I said, he’s going to have to rent them out because his children are not that old.
MIKE:
But I’m curious how they figure that out, because for us, when we were looking at buying houses, we were looking at brand new houses that had basement suites in them at that time. But The formula is if you have a brand-new house without a history of renters, that doesn’t count towards the math that facilitates ownership of that house, which is why you have the basement suite in the first place. How do you quantify what those rents are going to be in a unit like that in order to qualify for those loans?
BOBBY:
Right, so there’s going to be some math involved for sure, right?
JENNIFER-LEE:
So, depending on the area… That’s why I check out math.
BOBBY:
Well, that’s why you lend on the professionals, right? The subject matter experts at your lending institution, right? Depending on your location, there’s going to be a rental bar that’s being looked at is we can collect these kinds of rents with this type of a unit, right? So, there’s going to be some pre-built calculations. So highly density areas will come in different rents than, let’s say, low density areas, right? So, the feasibility of the project then gets affected by your location.
MIKE:
But some of this would also be derived by what the input from the builder and the architect and designer is, as well as like the sizing and stuff, right? It’s a calculation. If I have X units at 600 square feet each, it’s worth a certain, I hate to say it and simplify it. It’s almost like blue book value of a car, right? There’s a list they check, and they cross, and they match it up. And essentially that helps us derive the rental value, right? Is all those different pieces of information from all those different professionals triangulated.
BOBBY:
Absolutely. So, I think design is going to be really important for the area. So, the unit mix is what I would call that is going to be critical to how to maximize the rents so you can get affordability. So, you know, you’re starting with the conversation at home, but then you got to bring in the experts to figure out, you know, what are the rents we need to offset the equity requirements. So, the bank is happy. Right? And if I can speak about kind of CMHC for a moment, right?
JENNIFER-LEE:
What is CMHC? CMHC. There we go. What is it for people that don’t know? Because apparently, I can’t pronounce it.
BOBBY:
Canadian Mortgage Housing Corporation, I believe. There you go. Okay. Woo. I was right. So, you know, with a bill, their interest is There’s not an automatic qualification, there’s a qualification requirement there, okay? So yes, they offer a 50-year amortization, but there’s a contingency on how you get that, okay? So, more affordability for a homeowner to go to CMHC means that, okay, we can amortize this property now we’re 50 years, so your equity requirements come down, right? Your mortgage payments are coming down. Affordability is increased for you to even develop the property. Now, the conditions, how to qualify, right? Minimum five units. is one of them. Then you can have a mix of affordable rental units, meaning what kind of price you’re going to have, accessibility, are you going to provide accessibility in some of these units, and then energy efficiency. So those are three levers. So minimum five units, accessibility, energy efficiency, and affordable rental units. So, the caveat with affordable rental units is going to be, this is going to be a 10 year, CMH is going to require quite a bit of due diligence on your part if you’re going to go down that path. you’re going to be signing up for a 10-year interest rate, so there’s going to be a 10-year lease program that you’re going to be able to have and hold rents, which means it’ll be a rental value set, which means there’s other things that come into the legal formation, things like covenants, right? Covenants that you promise to keep the property rented at these values for the next 10 years. So, it’s not a handout by any means, but there is an option to go to a 50-year amortization. So again, I’m not a lender. I don’t work for CMHC. Some tidbits to share to noodle on affordability for the developer, homeowner, and to leverage the opportunities through CMHC.
JENNIFER-LEE:
Oh, God, this is a lot of work. I’m glad you’re doing this. Just let me know when my laneway is ready. Thank you.
MIKE:
I want to go back to my original plan was to live on a boat. But this is good information because it’s not a straightforward process. And part of the way we demystify it is we talk about it, and we start to talk about some of the different elements that go into bringing a home like this to life, and some of the tools for someone like me. Because ultimately, if I identify my property, I’m part of the solution to our housing crisis. It’s not just about a place for my kids. It’s about having a strong community and having people living on our streets as opposed to what we have on some streets now where there’s empty houses and two people living in them. So, it’s a great strategy. There’s a bunch more information we have to cover. But one thing we want to do is take a quick break because we have to thank our podcast partners. So, if you are okay, we’re just going to take a quick break and thank our podcast partners. And then we’re going to come back and talk a little about how to manage the build itself. Once we’ve engaged with all these professionals for the planning process, how do we actually bring this build to life? Because again, unlike a traditional single home, there’s a few more elements to manage as well. So, stick around. We’ll be right back.
JENNIFER-LEE:
Measure Twice, Cut Once is grateful to our podcast partners, FortisBC, BC Housing, and Trail Appliances. Support from our partners helps us to share expert knowledge and resources with families looking to build, design, and renovate the home right for you. Trail Appliances makes everyday life better with the best selection in Western Canada, hassle-free delivery, and a price match guarantee. You’ll always get the best deal at Trail Appliances. At Trail Appliances, you’ll love buying an appliance as much as you’ll love using it. Affordable, accessible, quality housing is top of mind issue for many British Columbians. For BC Housing, creating access to housing solution that meets everyone’s needs is a guiding principle. BC Housing is working with governments, nonprofits and residential construction industry members to create practical solutions to BC’s housing challenges. To learn more about BC Housing initiatives, programs and services, go to www.bchousing.org . And we all need reliable and efficient equipment for better comfort, health and safety of our homes. Whether you want to adopt some energy saving habits or take on a major energy efficiency upgrade, FortisBC can help you save energy. Be sure to visit FortisBC where you can also find amazing tips on low and no cost ways to save energy, plus great information on what FortisBC is doing on low carbon energy with solutions such as renewable natural gas. Competition alert! Listen and like this episode for your chance to win a Napoleon Prestige P500 stainless steel natural gas barbecue valued at $1,600, compliments of our podcast partner, FortisBC. Details at www.havan.ca/measuretwicecutonce . Now let’s get back to our guests.
MIKE:
All right, welcome back, Bobby. We’re going to talk a little about how to manage the bill, because obviously, as we said, it’s not the same as building a conventional home. But before we do that, can we spend just a couple of minutes, and can you sort of summarize this legislation? Because it’s this legislation that’s led to these opportunities that are going to help people like me develop our property, but also help solve some of our housing crisis here in BC. We’re all going to be the beneficiaries. Can you summarize this awesome legislation for us?
JENNIFER-LEE:
And make it easy for us to understand because I’ve read up on this and it’s like I just want someone to tell me it really like in regular people’s terms.
BOBBY:
Sure, yeah, I’ll do my best. So really what the municipalities are tasked to do by the provincial legislation is by the end of June to come up with a plan on rolling out the multiplex program or the missing middle, which different municipalities are calling it. So, what does that translate to? It’s outright four units on properties, six units, up to eight units, depending on your proximity to transit. Okay, what’s neat about it is it’s a fast process, you’re not going through a rezoning, it’s an outright legislation to zone. So, you don’t have to go through public hearings, there’s public notification, there’s not a council you need to go through, which we’ve had to do through larger projects. So, it’s a real, much like we went, City of Vancouver said every single-family lot is now a duplex lot under these conditions. Similarly, multiplex allows the same thing.
JENNIFER-LEE:
And what are some of the conditions? Like, does everyone qualify to do this? Or are there certainly boxes that you have to hit?
BOBBY:
So it’s a code compliant building, meaning that things that I’m working on, on projects right now, which are non-compliant buildings to get four units on it, to get three units on it, or to get the fifth unit on it, say character homes or heritage projects, you don’t have to do those things any longer because those buildings are not code compliant. These buildings that are multiplex are code compliant. So, you don’t have to deal with some of the minutiae of fire. fire safety between side yards because side yards should be wide enough. However, if it’s not, then you will get into some of the complexity of that. And I don’t want to go too far in, but there’s a lot of applications out there because there’s a big interest in the need for creating and supporting our communities and building family wealth. The other part of it is what’s neat and misunderstood is there’s not a parking requirement as per the bylaws. Now, in a strata though, something to think about, noodle on a little bit is, if you’re doing four units, you’re probably going to want some parking. So then to your question before is, you know, design. Can we get the four units on there? How many parking spaces will we provide? How marketable is this unit? Should we ever decide to sell it or to rent it? Does that help?
MIKE:
It does. And the other thing that people don’t understand with this legislation, I think it’s very important, is it’s standardizing across BC. So, I’ll give you an example. I live in South Surrey. Up until this legislation was enacted, you couldn’t build a duplex on less than 10,000 square feet. Meanwhile, in Vancouver, where people were building like triplexes on much, much less sized lots. So, what it’s allowing us to do is unlock the value of our property, and it’s starting to open up potential for densification in areas where there were not before. That’s the most exciting thing to think about. So now that we understand the legislation, let’s talk about managing the build. Now, there’s the usual conversations about how many bathrooms and kitchens, and we’re going to get into that. But as we mentioned all along, it’s not the same as building a single home. So, there’s going to be different things to think about, like for infrastructure, for hydro. As an example, if I build four units, I have to have a minimum four 100-amp services. So that I’ve gone from 100-amp single service to 400 amps. That alone presents challenges. Water, parking, fire, sewage. So, can we talk a little about some of those challenges, how they differ creating a multi-density unit versus creating a single-story unit with, say, a suite?
BOBBY:
Really good one. So, the consideration is volume, right? So, if we take grey water, storm, sanitary, we’ve got multiple bathrooms now to deal with. So, what is the infrastructure on the street? What capacity is that pipe existing and what are the upgrades going to be required there from engineering services at any municipality? Right. So, what does that mean from a cost variable perspective, a timeline perspective and. More so. between units. So, this is commercial building now, right? You don’t have a single party wall for your ventilation, for your exhaust of your boiler. You have to protect each unit. If there’s four units on there, you’ve got multiple party walls, the double wall dividing for fire safety. You have units above and below. So, I always think of it as an apartment building now, right? And stacks of them on a block. So, from a lender’s perspective, just to go back to finance again, is they’re going to be looking for a qualified builder who understands the building process of this building. It’s no longer a simpler residential building at step code X, whatever the step code might be. You’re now dealing with commercial. So, sprinkler systems, where are we bringing that in? So, the underground works. So going back to part of your original question, the underground works or to get out of the ground works to setting up the stage before we’ve got. Construction of wood frame is going to be a lot more. We don’t have a single home to deal with now, right? We have multiple units in one single apartment building, essentially.
JENNIFER-LEE:
A party wall is not exactly what I thought it was. It’s not like it’s funny or fun. Yeah, it could be.
MIKE:
Quite the opposite. It actually keeps the noise of the party from bleeding through to the other units. So, it’ll carry services, but also, I mean, that’s another consideration. Soundproofing as well. Good point.
JENNIFER-LEE:
your favorite topic?
MIKE:
One of them, learn through experience.
JENNIFER-LEE:
One of them. I’m just curious about because this seems very costly, obviously, like you said, it’s now commercial. And we know in the last few years in the building community, a lot of prices have gone up on certain things like wood and other materials to build. And the whole idea for this is to bring more affordable rentals out there. But if the builder or the person that owns the property is putting in so much money into developing this piece of land, how are they going to be able to keep the cost low on the rent?
BOBBY:
That’s the feasibility exercise. So, you know, Mike mentioned earlier, you know, we typically start the conversation, and this is a little bit different as well. How much is going to cost? What about the design? What about the architect? And this is going to come back to, you know, perform analysis, right? Depending on the location of the property, the cost of getting hydro there, number of units we can put and the parking we want to provide and the rents that location will carry. So, the mathematics there need to happen with your lender, with your family, with your architect, with your builder. Again, building that team out to understand, is this a feasible project? Will a lender lend on this? Will this property carry itself? Right?
MIKE:
I have a question for you. We talked about it being a commercial style property. Obviously, if I’m building a unit and renting three of the four units out and living in one, that fits that description to a T. What about if I build this exact same house, the exact same set of blueprints and plans, but instead I put my parents in the second larger unit? And then I keep one of the offices as, or one of the units, sorry, as my office. And I keep one open for say Airbnb, which I’m legally allowed to do on my same property. Because it’s not being rented per se, is that still considered commercial? Does everything fall under that umbrella or is there exceptions for when it is multi-generational living versus the option that we just talked about where there’s rental units?
BOBBY:
I wrestled with this too. And, um, it’s going to be an asset-based loan. That’s the category this is going to fall into. So irrespective of who’s living there, what is a rental offset? Because at some point, you may not want to live there either. So, from an asset outliving an individual, for example, this asset will stay. So, the calculation of the mathematics around the lend of it is going to be an asset-based loan. So, whether you’re renting it out, here’s a rental market, here’s the offset of the rent to carry that mortgage, to carry that asset, or somebody living in there paying a portion of the mortgage or however that’s set up, it’s still the same. So, I wouldn’t break those two things apart, which I wrestled with personally.
JENNIFER-LEE:
I’m just curious, can this turn into then like, say, does Mike even have to live there? Could he do the fourplex and then go to another fourplex and then do another fourplex if he felt like it?
BOBBY:
Absolutely. So, the structures on this, just to digress a little bit to what I was talking about earlier, is legal structure, tax structure, right? It’s likely that if it was a family scenario, it’s still that type of loan. So, structure-wise, very high level, you’d probably put it in a company. Right? It held interest for Mike and family. Right? And inside of that, you would have some type of a shareholder model. And then a progression model of what happens if somebody gets ill, if somebody wants to sell, all of those kinds of stratification rules that fall in there. How do we transact inside of this asset now?
MIKE:
Well, it’s no different than any other business. If you own a business, you have to go through all of that already. And all this is forcing those of us who are homeowners to do is fall under some of the same infrastructure and setup that every one of us who are business owners have to deal with as well.
JENNIFER-LEE:
I just love that he keeps trying to kill you off too.
MIKE:
I have a lot less enemies these days. That’s no longer an issue. I want to talk about the finance part of this a little bit more. And there’s two parts to that. The first is like, having to do with like, OK, we’re building a house now. Instead of having three bathrooms in it, there’s going to be nine bathrooms. Instead of one kitchen, there’s going to be four. But before we get to that, we have to do some planning. And we talked briefly about a wealth advisor because there’s an impact on our lifestyle, and there’s an impact on some of our future implications for where we go as a family as well, especially when we’re talking about multigenerational. How important is it that our wealth advisor slash financial advisor is an integral part of this process and what part of the process do we involve them in specifically?
BOBBY:
So, I have a meeting this week, actually the day after tomorrow, and these points we talked about today, financial structure, legal structure, tax structure, and the wealth structure. So, if this individual is retired, has paid off the property, what I personally, under my business umbrella, do not want to do is create any type of not hurt but an unfavorable result after building this thing. You know somebody to answer your question more succinctly is saying look I’ve got a retirement, and this is my retirement plan here’s what’s been built out for me with my wealth advisor that sets my lifestyle for wifey and I or whatever the circumstance is partner is this is what I make every month based on my investments. Now, if I’m going to go do this activity on the multiplex for future generations or for the community or I feel like doing it, you don’t want that to affect because if you’re drawing money out from let’s say a RIF or an RRSP or some other source of income that’s supporting your current lifestyle as a retiree, you need to be cognizant about the effect of that in the new investment or new venture that that may come into play by making a move. So yes, I think that’s one of the folks you really want to talk to early on in as well is, you know, how do I make this feasible? Here’s the amount of money we need and not affect my current lifestyle, right?
JENNIFER-LEE:
Again, all this stuff looks great on paper, but you really need all the trusted professionals in your corner. And we talk about this on this podcast, and even you mentioned it earlier at the beginning, Mike. It’s really, it’s just no different than getting your builder, your designer, and everyone up front first. You’re getting all the proper people on your team to make the right decisions. And maybe it’s not the right decision for you but look into it.
BOBBY:
Absolutely. So, I’ll drop back to, you know, communicate, communicate, support one another through the process, and really try to understand the value of taking the step in and moving in this direction for your family and for your own self. It could be a wonderful experience, but do the evaluation, right?
JENNIFER-LEE:
And do you still want to do it is my question now after hearing all this?
MIKE:
I do actually, because I have far fewer questions. And to put a bow on all of this, I’ve learned a few things too. And to summarize, I mean, what I’m taking away from this. is that building a multi-density unit is so much different than building a traditional home. So, in both cases, you require a talented team of individuals around you to ensure success. In the case of this sort of project, it’s a different team of individuals. Yes, we’re still engaging designers, we’re still engaging builders, we’re still engaging engineers and energy modelers and everything else, but we’re also bringing in tax advisors. wealth advisors, lawyers, not only to cover the liabilities of the project itself, but the long-term implications as well. So, if it’s nothing else that we’ve learned, it’s that we keep working with our team. There’s just a little bit of a different team that needs to be put into place. So, thank you. It’s been a great conversation as always. Next time, don’t wait five seasons to come back, okay?
JENNIFER-LEE:
I don’t know, maybe we scared him off. Who knows? You’re back now.
BOBBY:
Glad to be here. Thank you. Wonderful to sit with you all.
JENNIFER-LEE:
Before I go, you’re not getting off that easy. You still have to give us one more tip, even though you gave us so many amazing tips. One more tip for maybe somebody thinking about doing this. What would you say? Besides don’t do it, no doing it.
BOBBY:
No, I think there’s an opportunity here. It should be taken full advantage of. The tip or unsolicited advice would be to have the difficult conversations at home. have them with your advisor, the advisors, and get all the facts together and mind map it out, write it down, and then reflect on it. You know, coming out of Easter, it’s a good time for reflection anyhow. This is the time to take on this as a big project and have the experts to really bring it down and funnel it into something that’s more consumable.
MIKE:
Well, as always, great advice. And I’d like to add one more thing to your list of things to mind map, and that is how you’re going to cook dinner once you get your new place built. One of the easiest ways to do so is with barb-e-que in your home. And one of the easiest ways to get a barbecue for your home is just to listen to this episode, like this episode. And you have a chance to win an Apollyon Prestige P500 stainless steel, natural gas barbecue valued at $1,600, compliments of our podcast partner, FortisBC. Details are available at haven.ca slash measure twice, cut once.
JENNIFER-LEE:
Sounds like you got a lot of conversations to have tonight at home, Mike. And for notes and links to everything mentioned on today’s episode, including resources shared by Bobby, go to www.havan.ca/measuretwicecutonce . Thank you to Trail Appliances, FortisBC, BC Housing, Raimi Films, J-Pod Creations, and AI Technology and Design. It takes a team to build a home and so does it to build a podcast. Thank you so much for joining us. And next week, we’re going to chat with Trail Appliances about their latest kitchen designs. Very exciting.
MIKE:
It’s going to be a great conversation.
JENNIFER-LEE:
Awesome.
