Budgets keep it real, and the Burdens get real in this final episode discussing their finance strategies, with mortgage broker, Alisa Aragon-Lloyd of Bridgestone Financing Pros.
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Here's the Full Transcript of this Episode
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[00:00:00] Welcome back to the final episode of Measure Twice, Cut Once, Season Four, Real Time Reno. Of course, we are following our favorite family, the Burdens. Skyla and Justin as they renovate their Heritage B home in Vancouver. And of course, we have their interior designer Cara from Triple Dot Design Studio and their builder Alex from Level One Construction, and we have a very special guest today. Her name is Alisa Argon Lloyd, and she is the founder and CEO of Bridgestone Financing Pros. So, she is going to be taking a look at the budget that Skyla and Justin had, all the ups and downs that we’ve had in this project and how did that affect their budget. Because as homeowners that are wanting to renovate and young homeowners like Skyla and Justin, it’s kind of an unknown. A lot of us don’t know how to do this. Even if we come from a family that maybe is versed in it, I think a lot of us think like, oh, we need to know everything. About A; either purchasing a home or how are we going to be able to afford to renovate it, and B; we need to know all that information to be successful at it.
[00:01:09] And that’s not the case because I think Skyla and Justin, you and I have had a conversation before, it’s kind of those things that you’re like, oh, I don’t know if we did it correctly or we did it our way. But that is why we have Alisa here today because she is going to make us feel so much better about ourselves because she does. Any time that I talk to her, because I love her motto, which is, it’s always the right time for you when it’s right. That is very comforting, and I know you guys are going to love talking to her and we kind of get to relive the project as well. I don’t know, we might get to relive some parts that maybe we’re not super excited about.
[00:01:42] Like, you know, we had that unexpected cost of the roof, but now that the roof is done, I think we can all say that it was probably good to be done now because we don’t need to deal with it in the future. But to recap us further onto the, Alex, can you give us a little short synopsis of everything we went through this season?
[00:02:00] From the builder’s point of view, anytime you’re doing a large-scale renovation on an older house, there’s always going to be some things that pop up that have extra expenses or extra costs to the budget. That can always be predicted before you start. In this example, you know, we had a roof that needed to be replaced.
[00:02:19] We had some additional plumbing that needed to be repaired. Extra engineering costs that had to be incurred to make the house structurally sound. So, part of any large skill rental, you’re always going to have something, and it just varies from project to project. Now, from the homeowner’s point of view, if you could sum up the renovation in your own words, what would you come up with?
[00:02:41] Yeah, so it’s been a lengthy process. Um, definitely what we anticipated happening, maybe didn’t go to plan, but in the end, Super happy that we did it. Really excited that we get to live in a nice. New old house, because essentially, you know, the top two floors are, are brand new now. Perfect. And your take on it, Justin?
[00:03:04] Yeah, same. You know, there’s, there’s been ups and downs. Overall, everything’s pretty much gone according to plan. Like Alex had mentioned, there’s always things that come up. Dealing with an older home and there were some surprises. Everyone’s been able to, to deal with those surprises. We’ve worked through them, and you know, really just the most trying thing really at the end of the day was probably the timeline were anxious to, to be back in our home and be comfortable and project took a little longer than anticipated, but the results were worth it.
[00:03:35] It’s always that hard part when going through the whole renovation process is you just want it to be finished and you get to move in it and enjoy it even though everything seems daunting with like all the money that you spent. And then eventually you get to move in and enjoy. We’re going to take us back right now and can you tell us a little bit about how you guys actually made the decision to get the home from the Skylar’s parents and how you ended up purchasing that?
[00:03:58] What was the conversation like? The story. Starts in the summer of 2020, so we’re still early in the pandemic. We were living in a duplex in another part of the city, and me and Skyla, we knew that that wasn’t a spot where we wanted to stay. Long term, our youngest daughter was getting ready to enter kindergarten.
[00:04:19] And we wanted to find a neighborhood close to schools, you know, with a strong community that we could raise our family in and be there for a long time. So, we decided that summer that we were going to sell our home and we were a little concerned with the housing market in Vancouver. We, we didn’t know how things were going to respond to the pandemic.
[00:04:39] There was a little bit of fear that, you know, the market could take a serious hit. As a result. We didn’t want to be sitting. You know and lose any of the equity that we’d built in our home. So, we decided to sell, and we had made an arrangement with Skyla’s parents that, you know, we could stay with them temporarily while we looked for a new place to live.
[00:04:56] So we moved in with them in the fall of, of 2020, and then we kind of spent a few quiet months, you know, just getting adjusted. And then in January of. 2021, we started to look for another place to live and you know, we cast the net wide. We looked in Vancouver in East Vancouver. We started considering a move out to the valley.
[00:05:16] This was kind of when there was this big out influx of, of people, people had realized that there was maybe a, a future working from home or some sort of hybrid working models. So, there was a lot of people moving out into the valley. and our initial thesis, which was that, you know, maybe housing prices would, would come down and our buying power would be, you know, improved.
[00:05:39] Well, the, the exact opposite happened. There was very little supply on the market. Prices started to rise. And we soon found ourselves in a situation where we were really struggling to find reasonable options that kind of fit our, our needs in terms of being in a community, being close to school. And the more we thought about it, the more we realized that where we were staying temporarily in Skyless parents’ house was actually a perfect location for us.
[00:06:02] It was right in a great catchment for, for school, you know, really, really nice neighborhood and, and also close. Downtown in the North Shore, close to our, our work environments. And it just so happened at that time as Skylar’s parents were also considering making a move themselves. So, you know, we had an opportunity to sit down and, you know, have some discussions about what that could look like if they were interested in moving and selling and, and if we were interested in buying and.
[00:06:26] There was some other factors at play there. Skylar’s parents had been in this house for over 40 years, I think they’re the second owner of the this home, which was originally built in 1912. So, they have a really strong attachment to it, a strong attachment to the community, and I think they saw value there, keeping it within the family.
[00:06:41] And we obviously, we saw that as something we would like to, to continue on this legacy, this house in Vancouver. And we’re really fortunate that, you know, it kind of worked out that we didn’t have to find ourselves in a bidding war. Other buyers, we could kind of take our time, negotiate this. And one of the things that me and Skyla talked about is, you know, if we’re going to do this, we think this house needs some work.
[00:07:03] It’s not an ideal setup for a family of four. Definitely. You know, the, the top two floors needed some work. So that’s where in February of 2021, we reached out to Alex in level one and just said like, hey, we’re looking at possibly purchasing this home. What would it look like in terms of cost to do a serious reno on this, on this property?
[00:07:23] Me and Skyla were really naive. We didn’t know, we’d done some renovations before, but not with, you know, a larger more reputable company involving, you know, many sub trades with a long timeline and, you know, a lot of moving parts. So, you know, luckily Alex took the time to put together a preliminary budget.
[00:07:41] And that’s where we started off from. And then from there we were able to, you know, work with a mortgage broker and figure out how we were going to finance this. And really our approach at the end of the day was, um, you know, once we decided to move forward with the purchase, we didn’t put down as large of a down payment as we could have and we just assumed a larger mortgage and we used that to kind of the cash or the proceeds we had from the original sale of our duplex to fund the renovation.
[00:08:17] I know every situation is different, but what does it look like to purchase a home from a family member, especially when you’re purchasing in such a hot market? How do you negotiate a price?
Yeah, so that was interesting because my parents required the equity from their home to retire. So, we weren’t gifted a home in Vancouver. It needed to be equitable. And we did go back and forth on, on some numbers. You know, I think at the end of the day we’re happy. We were satisfied in knowing everyone knew that the house needed work, maybe not as much work as what ended up happening. So, there was a little bit of give and take with the final price, but we definitely needed to be sensitive that my parents needed the equity from their home in order to retire.
Yeah, it worked out in the end. It wasn’t a free house for you guys. Oh, not a free home in Vancouver. Really?
Not free, but I think probably that, and nor should it be, right? Probably the greatest advantage for us was the market was really hot.
[00:09:08] The neighborhood is desirable, the location’s desirable. There’s no doubt in my mind if that went to market, there would be multiple offers and we’d end up in a bidding war. Right. So that’s, that was really the greatest advantage. And, you know, they, they settled on a number or we able to settle, settle on a number that they were, they were happy with.
[00:09:27] They were getting enough return; they also are going to be able to spend time there and maintain that connection to the neighborhood and the home and see that that legacy continues on. They’re kind of nostalgic people. They see it’s not just about dollars at the end of the day.
[00:09:44] There’s other things that are important here, and yeah. So, they saw the value there. Yeah, we were just very fortunate that it was able to work out that way.
Next renovation. You’re going to have to make an in-law suite though. Well, yeah. I mean, these are all on the table. When we saw the house, the top two floors became a priority.
[00:10:02] That’s, we’re going to spend the most of our time. That’s where the, the bedrooms are going to be on and the family room. And, but there is this basement area and that is on the list of, of things to take care of. And we didn’t know how far our money would go when we first contacted Alex. You know, we have a long list of things to do, both interior and exterior.
[00:10:21] So we really had to prioritize and decide which projects we’d take on first and then, and then see really how far the funds would last.
And that’s what we want to discuss today too, is why we brought Alisa on is, what are your future projects going to look like and how can you start budgeting it for it now, for the future after you’ve had this taste, of course, of your big renovation, which a lot of people probably don’t want to think about the future, but maybe some little bit of planning can go a long way down the road.
[00:10:48] Let’s welcome Alisa on and we’re going to start the discussion. Say a little bit about yourself, just for the Burdens and everyone that doesn’t know you. Give us a little bit of background on yourself. I’ve been doing financing for the last 12 years; pretty well my whole career has been real estate, so I spent 15 years working for developers and property management companies. Big developers like Polygon, Ledingham McAllister, The Quick Group, and I also worked with Hollyburn Properties. They own and manage their own buildings, so that was great experience there. So essentially, I left the corporate world and then I pretty well got my mortgage license. Just really started working through financing and really essentially the money finder.
[00:11:25] So I work with a lot of homeowners first on buyers. I’m a little bit different in a way that, that I also do renovations and construction loans. They’re quite unique. Construction loans are one of the riskiest, definitely out. It’s really about what is the best strategy based on what they’re wanting to achieve.
[00:11:40] It’s really exciting to hear you guys pretty well or you know, have come through this journey and definitely great that Skyla’s parents were able to kind of help you with the land and the house and because that’s huge. Absolutely. Especially with a very higher market. And especially when you guys were looking at doing it, it definitely with a peak was really, it was big.
[00:12:01] Prices have definitely gone up. Alisa, you have your processes when you work with a couple, and then Skyla and Justin had their process of starting their whole budget journey for this home. So, what would you typically do if a young couple, like Skyla and Justin came to you and said, we want to purchase a home from a family member or want to purchase a home in general and want to remortgage.
[00:12:22] It’s funny they actually mention that because I do have another client where the grandma actually owns the house, is clear free title and the daughter and husband and grandson in this case are going to be doing the same kind of thing with what you guys did. So, it’s exciting to hear that you guys did that because it is happening a lot more that the parents or grandparents have a lot of faculties in the house or they’re almost like mortgage free.
[00:12:44] They do want to keep the house and be able to help the next generation to be able to afford a home just because affordability has come a big issue. Just because prices have gone up quite a bit, so in this case, it would be a first thing is they did, is figure out what the price of the home would be, right?
[00:12:59] So how they determined what the value of the home is also what is the market value of the home, but also what are they comfortable paying or selling the house to Skyla and Justin. That it’s a win-win for everybody, right? So, in that case, yes, it would be determining the price of the home. You don’t really have to use a realtor for this case.
[00:13:18] You probably just in this case you would just use a lawyer to draft the contract as it is technically a private sale. And then you guys would just qualify to see how much you guys would qualify for the home based on your income and, And debt and credit.
Yeah, and that’s exactly what we did. So that was, you know, another advantage.
[00:13:35] Realtors didn’t have to necessarily be involved. We, we knew some realtors, so we were able to get a sense of what, maybe what the market value was for the home or what it would be listed at. So that was considered in our negotiation for pricing. Purchased it from Skyla’s parents. We had the luxury of time then so we could get our financing in order.
[00:13:55] Working with the broker, figuring out and kind of shop around. Interest rates were still very low at that time. You know, that’s something that’s definitely changed. It’s been a kind of an unforeseen event, the rising cost of living and also rising interest rates now. So, you know, it’s more expensive to carry this debt for sure.
[00:14:15] But at the time that, you know, we were fairly comfortable that, you know, rates would remain low for a while, or that was the guidance anyways at that time. So, we really had the luxury of time and able to figure out how we’d get the money set aside to do this. And you know, we started off, I think we said, you know, around $500,000 would be kind of this nest egg that we’d have here.
[00:14:38] Put towards our house and hopefully we can take care of everything, right? We can reno the entire interior. There’s some exterior work that needs to be done in terms of replacing some stairs, some fencing, the exterior painting. That’s when, you know, we got in touch with Alex and he drafted up a preliminary budget in February 2021, and I think the number at that, to do.
[00:15:00] The main floors of the house came in around $350,000. So, you know, me and Skyla had no idea what those costs would look like. But you know, we sat down, and we discussed that, and you know, we, we thought, okay, we’ve got about 500 k if we could knock off the first two floors. For about 350. That gives us some buffer in case things go sideways.
[00:15:22] We anticipated a few additional costs and then we also figured we can definitely do some of the exterior repairs, have the exterior painted, and then, you know, maybe we’ll have to phase in the basement at a later date once it’s all said and done, regroup, reassess where we are in terms of the funds available and, and make some decisions at that point.
[00:15:42] And I think that’s exactly what we’ve done.
You analyzed everything of what are your needs now and what are your needs in the future, right? Your case, you’re not first-time buyers. You actually moved up in the way that, you know, you sold the duplex. Now you have a home, so you actually, you know, upsized, you moved up.
[00:15:58] You’re not a first-time buyer. Sometimes it’s just getting into the market and start building equity. But you guys had your duplex, which is great. You had quite a bit of equity there, obviously, especially when you sold at the right time. And then yes, interest rates were low at that time. Like the timing for you guys was perfect.
[00:16:13] Now, if you were looking at doing it now, it will look probably a little bit different. Didn’t really mention that. It’s what I say. It’s like it’s when is the right time for you? It’s not timing the market necessarily, or you know, it’s like, well, what interest rates are doing? Or what is the market doing essentially?
[00:16:28] Now you’re buying low, but you’re also selling. Right. In your guys’ case, you had a very great benefit that you were able to buy from Skyla’s parents, which was great. Again, you agreed on a price that it worked out for everybody. And I mean, really $500,000 for the renovations that you did is great. You guys had a buffer of, you know, you estimated the budget was $350,000.
[00:16:49] You still had $150,000 to kind of work with and you know, things did come up, like you mentioned there was the roof that you weren’t expecting and engineering reports. Plumbing repairs. And that is something that always tends to come up with any major renovation because level one’s a great builder and there’s amazing great builders.
[00:17:08] Once they start opening and actually doing the work, sometimes things come up that they’re not aware of just because that’s just the nature of renovation sometimes. Right. And I know just in researching a lot in that in one of the previous episodes we discussed this, and you said you took on your own responsibility, you and Skyla to create your own contingency plan.
[00:17:27] Alisa, when you have a lot of clients come in, do you suggest that if they’re going to go in the reno, that they should have their own contingency plan if they don’t do the research like Justin did?
Yeah, I definitely work with my clients, and I work with a lot of builders as well, so it’s really working side by side with the client and the builder.
[00:17:43] In this case, you guys had the money up front, so it’s a little bit easier, but if you’re doing, say, a construction mortgage, is really about aligning the budget when the lender’s going to release the funds based on the phase in construction. So, it’s really important to align that because it will come a point where there’s going to be peak capital required.
[00:18:00] Even though you might be approved, the lender’s not going to advance more funds until you achieved a certain percentage of completion of the home. So, you guys did have that flexibility, which was great because then essentially you guys budgeted your money. It’s like, okay, so when Alex said, Okay, you need, I need $50,000, It’s like, Okay, well here you go.
[00:18:17] Right? But it is also monitoring where the money’s spending. What do you actually need and what else you have to do. And your focus, like you said, it was, you know, focusing on the top two floors, and then you still have the basement that didn’t get done, and that’s. You guys can live in the home now if you probably get an appraisal.
[00:18:33] I know land values have gone down a little bit, but definitely there’s still equity now in your home because of the improvements that you made in the home, right? So, in a few years, you can definitely look at refinancing and be able to take that out to actually finish, say the basement. You also did some exterior work, which is great.
[00:18:49] In your case, it’s forever home, which is great. But it’s like as time goes by, you’re paying down your mortgage equity goes up, then you actually start building more. And in that case, you can still work in doing some stuff and then the in-law suite or you know, and you just use the basement suite and you finish it, and then you use that income to help you with the mortgage or essentially as if you guys can actually save a little bit more money.
[00:19:12] Now that things are kind of done, you can start putting some of that money towards the renovation, finish the basement, and then you can actually refinance in that case, and then you get the money. Because then now you have the rental income to be able to help you qualify for that, which otherwise you wouldn’t.
[00:19:26] Right now, because we had some engineering stuff that did change it.
Can we talk a little bit about that?
We weren’t prepared for that. In your initial budget, yes, you did have the contingency plan, but obviously it’s hard because you have this dream in your mind and you guys knew what you wanted to do and then Alex came back to you and said, oh, engineering says we have to do this, this, and this and this to move forward.
[00:19:49] How do you get through something like that? I know we touched a little bit about it in the earlier episodes, but from a budget perspective, once we had the preliminary budget from Alex and then, you know, Cara came on board and we really started working through the design and putting together, you know, this plan for how to proceed.
[00:20:04] And in that original plan we had had our heart set on moving some, some walls to create some additional space upstairs in the bathroom and moving some, some walls down in the kitchen. And we got to a point where, you know, we had this vision and everything was on track, and then the engineer came in and we learned that there’s going to be major implications to moving some of these load-bearing walls upstairs, um, and on the main floor.
[00:20:30] And essentially what that was going to entail was having to get in the basement and, and pour footings and, and really turn that into a construction. We were concerned about that for, for multiple reasons. One being we had always planned to stay in the basement, be in the home while the, the upper two floors were being renovated.
[00:20:49] So, Alex essentially put together three options for us, and, and one, the first option was we’re going to. We’ll do, we’re going to do everything as planned and what’s going to be involved is essentially a full renovation of the basement while we’re down there working on footings, redirecting loads. So, we’d have to be out of the house and, you know, the budget for that option inflated from, you know, what we thought was around $350,000.
[00:21:16] Up to closer to the $500,000 mark. And that’s when me and Skyla said, this isn’t an option for us. We, we have this, this pool of funds. And at that point, if we were to proceed with that, there really wouldn’t have been a contingency. And if anything came up that was unexpected and you know, you can just imagine the, the things we found once we opened up the walls in the first two floors, going down in the basement and opening that up and seeing the foundation and everything else.
[00:21:45] Like who knows? That’s something we’re going to have to deal with in the future, right? But we wouldn’t have been prepared to take on a bunch of additional expenses there. So, option one was kind of off the table. Option two was to, again, proceed with everything as plans, all the additional engineering work, but really just leave the basement in a state of flux.
[00:22:04] So, just do the construction as required to complete the upper two floors, but then kind of leave it in a bit of an unfinished state. And then option three was maybe to move off of some of these engineering requirements and do more of a remove and replace and just kind of forego the major structural changes.
[00:22:23] And ultimately at the end of the day, that’s what made sense for us in terms of the budget requirements, the, the fact that we could, you know, use our budget to, to go towards some of the finer finishes, the details that really have taken this renovation to the next level. And at the end of the day, deciding, you know what, maybe moving a wall two feet in the upper bathroom.
[00:22:44] And, you know, another 12 inches in the kitchen isn’t worth an additional $150,000 for us. Like, that’s not, we didn’t see the value there. The budget was a, it’s, you know, it’s ever evolving process, right? Like, you know, you got a preliminary budget and then, you know, we kind of get into the, you know, Cara’s her magic, and you, you know, you get through the, the details of the project.
[00:23:07] Then you get another budget. So, there’s budget checks that happen before you start. You have a really accurate idea as to what you’re kind of getting into financially. I mean, in this scenario, we had a lot of time to plan and there was no rush on construction start dates. So that preliminary budget or that budgeting, and design process took almost a year.
[00:23:27] Alex, after we got the engineering back, you and I chatting, and we were just so heartbroken to have this conversation with Skyla and Justin, because that meant that our best scenario plan was out the window. Like we knew it wasn’t going to really be a viable option Now because living in the basement, like a priority and the engineering had just ballooned way past what we had ever anticipated.
[00:23:52] And so they did have to make some sacrifices to their bathroom. If you’ve listened to the other episodes, you’ll know that Skyla had to give her claw foot tub up and we couldn’t move this one corner in the kitchen, which would’ve allowed us to have like a little working island because there is a high traffic zone there.
[00:24:10] So it just didn’t allow us the proper clearances to maintain that. We couldn’t have as much of an op opening in the hallway to create. Feeling of openness, just more of an open concept. But actually, in the end, we, we were able to add an opening that we didn’t think we were going to after the engineering, but Justin did put the ball in your court and say, you know, hey, you know, we’re considering this option of, you know, not moving the walls.
[00:24:36] Are we still going to get the kitchen that we want? And if the answer was no, or if it wasn’t going to be a functional kitchen, then who knows? Maybe you guys would’ve pulled the plug on the project. But that question was posed to you. And I think obviously, you know, you said, Yeah, like this kitchen is still going to work.
[00:24:50] Not having the island is not a big deal. Here’s another solution instead of that. Yeah. That’s really where we, you know, had to lean on you and say like, what, what do you think? Honestly, like, is this a major sacrifice? Is. Going to really affect the functionality of the kitchen. That’s not the only time we’ve had to, to ask you those questions too.
[00:25:08] Right. When people are looking for homes and they come to you that maybe they do want to renovate, how do you kind of teach them flexibility or even just their wish list for a home of like, what they’re going to be able to afford. Yeah. I mean, it’s great hearing your guy’s story because it’s, it’s true. You’re not going to get everything.
[00:25:26] You have your wishlist and then it’s just prioritizing what’s important. One thing that is also great, you guys work together and it’s a team, and that’s what I say my clients is like, be comfortable who you’re working with as a builder and with an interior designer. It’s not, don’t only look at the dollars and.
[00:25:41] When you’re looking at a budget or finding a builder to do your renovation is like really, is it the right team for you? Because what Alex and Cara did is fantastic because that’s really being a team and working with you and is not like, let’s just get this done. Right. And there’s some that do it. But again, it’s having the right builder because it’s a long-term relationship.
[00:26:01] You guys did this; you were saying what over a. And that’s a long process, right? And it’s not something that should just be, and it’s a lot of money as well. You guys have worked really hard to be able to do that. It’s, yes, it’s prioritizing what you want to do and also having the right team in place because they give you the options.
[00:26:17] They knew what it was important for you guys ultimately. Yes, Skyla and Justin made the decisions of like what they wanted to do, but they relied on Alex and Cara to, you know, give them options and advice and, and that’s really, really important. So, it doesn’t only look at the dollars and cents where you’re looking at finding a builder.
[00:26:34] Just make sure that you know it’s the right team for you and for us. I mean, that’s exactly how we decided to work with Alex and Cara was just from meeting them and, and recognizing that we could communicate well with them and that it was going to work out. Because honestly, the dollars and cents aren’t there at that stage in the project.
[00:26:52] You really don’t have a firm number that you’re working with. And sure, you can talk to people and the numbers will vary wildly depending on, you know, what assumptions people are building into their initial budgets. But you really don’t have a firm dollar number at the beginning, but for this type of project to make your decision solely based on money.
[00:27:12] So yeah, it really comes down to the, the people that you’re working with. We’re in constant communication. We’re always having to be in contact through email, through phone calls, and yeah, you just have to make sure that the people that you’re working with you can get along with. Right? Yeah. And you want someone you can trust, like you said too, because when you do have to have those hard budget conversations, you want somebody to be honest with you.
[00:27:32] You don’t want somebody to just say what you want to hear, because that’s not going to be great for your relationship down the road too, if they don’t encourage you to do the proper things, and then it’s going to cost you more money in the long. So, it’s really having that person you can have those honest conversations with, because you guys have had a few honest conversations even on this podcast together.
[00:27:51] When it comes on budget, how much has the house really changed from the original budget to know? Was there a lot of fluctuation or was it pretty much what Alex quoted you? We had about. 40 k in extras from when the contract was signed to where, you know, I mean there are also additional expenses on top of that, like the roof, which you guys paid separately, but those were the costs on top of, you know, the final contract based on all the drawings and specs.
[00:28:20] And, well, I think what we haven’t touched in is Alex gave a preliminary. At the very beginning, then we went through design and Alex budgeted again based on the final design. And after we altered the design because of the engineering. And then once you guys had the number, then the contract was signed for build.
[00:28:40] That final budget came in around 385,000 prior to the any additional changes. So, there’s probably. Roughly about 10% additional costs that’s been taken on and, and things that had to be done. Like those weren’t decisions, like budget decisions. At the end of the day, it’s like the roof needs to be replaced or water’s going to enter your home.
[00:29:02] The engineering needs to be upgraded or you will not pass inspection. Yeah. And it wasn’t like, oh, hey, I misquoted the drywall costs. And it’s going to be an extra ten grand because I’m an idiot. It was, yeah. Stuff that all related to extra scope items and cost over runs on some things that you can’t always predict in advance.
[00:29:20] Also, because when we’re quoting this too, if you’re having a budget meeting with somebody in December 2021, your prices are going to be in, are going to be based off October or November of 2020. But when you’re actually going to purchase those items, it’s summer 2022 and everybody knows, you know, inflation and how much that’s happened over the course of the last six, seven months.
[00:29:41] So it’s just that delicate, delicate balance and why you have some things as allowances. Again, it’s having that communication and you as a biller needs to have that communication as Skyla and Justin being like, okay, well this is how much it costs right now. Because of shipping issues, because of inflation.
[00:29:57] It could be more. Instead of being like, oh, it’s going to be fine. It’s going to be exactly this price; you won’t pay a cent more. That’s where people get into trouble. How much did it actually, cost extra wise, can we say? Yeah, it was probably about $12,000 additional. There was some additional work that Level One actually got involved to help out the roofer, replace some of the carpentry work.
[00:30:21] There was some rotten soffits and the fascia boards, so there was some cost there. I’d say at the end of the day it was probably about $12,000 to take care of the roof. But that’s something you need to do every 25 years. Exactly. And also, when you’re doing renovations, and probably you guys went through it as well, is even though you have a budget, it’s like, Okay, I’m going to spend X amount of money saying in kitchen appliances.
[00:30:42] Or once you start looking at it and you’re like, you know what, we actually probably will want this one instead of that one. Right. So, it would mean that probably the cost would be a little bit higher than what you actually budget. And that did, you guys kind of went through that as. Yeah. We kind of got into this mode where it’s like you’re going to spend all this money, like where you don’t want to cut corners on, on some of those things like your appliances, some of your fixtures.
[00:31:08] Like a couple hundred dollars extra at the end of the day, it’s like, you, you hope that’s not going to be the, you know, the margin that you need to, to skimp out on. Because we really wanted, if we’re going to spend this much money for things to really look, look nice and be really functional and you get what you pay for.
[00:31:24] Like, especially when it comes to appliances and fixtures and, and those things. So, we didn’t want to cut corners there and that’s a really. Attitude to have because a lot of people, and especially from a designer’s perspective, are like, oh, can we like save? Can we do like a hundred dollars less on a faucet or a couple hundred dollars less on tile overall?
[00:31:44] But you guys already knew that reducing scope of work is your biggest cost saver. So not doing that basement, saved you hundreds of thousands of dollars, and that’s the quickest and easiest way to reduce your budget. So, reducing the scope of what we were doing to the bathroom probably saved you $10,000 – $15,000 to bring that cost back down.
[00:32:06] In those three scenarios that Alex presented, are you going to spend $5,000 on your range or $6,000? Like that doesn’t really. Make a huge difference in the end when you’re using it heavily every day, and those are the things you’re interacting with. Where if you have the ability to reduce your scope, to bring your costs down, then that’s usually what we recommend.
[00:32:26] And because we have no plans on selling or moving anytime soon, that was a factor for us, right? Like, this isn’t an investment property, we’re not looking to flip it. We’re going to live here. And we wanted things that were, you know, good quality and are going to last. We don’t want to renovate again anytime soon, unless it’s a basement and it finishes off.
[00:32:46] Like if you guys are going to do this whole Reno, you want to make sure it looks nice when people walk in too. You don’t want it to just be like basic, like, I love the unlaced brass faucet, which you said was a little pricey, but I think it’s going to look. Amazing in your kitchen and you have to be able to follow us on the computer.
[00:33:03] I want you to go right now to www.havan.ca/measuretwicecutonce because all the photos are on there of the progress of the hope, and you can see what we’re talking about and you can actually do a little bit digging and see what kind of appliances that maybe the Burdens splurge a little bit more on and get the similar stuff to them because their home is gorgeous.
[00:33:21] And I think at the end of the day, like Alisa said, it was the right time for you. To renovate and now you’re going to be happy with this beautiful home that you’re going to live in for years. And then start the process of, you know, maybe looking into the basement in the future. As we’re wrapping up here, Ali did a little bit of crunching numbers while we were talking, and she thinks that you still may have a little bit of funds left available in your budget.
[00:33:46] Is that true? Do you guys feel that? Well, the one thing we didn’t mention is now we have to furnish our space. So, a lot of those funds have been going towards, we had to purchase a dining table, a sofa, a kitchen table chairs, which I had no idea the cost associated with all of these things. So yeah, dining chairs are expensive.
[00:34:06] Holy. Yeah. So, we’re kind of, we’re kind of working through that. I mean, it’ll be nice to stop writing checks here at some point soon.
Yeah. Justin’s anxiety is rising. Even though we’re within budget, it’s still not a good feeling.
I’m more of a saver by nature. So, this has been a real test for me to be comfortable with spending the money and I, you know, Skyla has to talk me down sometimes and you know, assure me that we’ve made the right decisions that this is going to be in the best interest of our family.
[00:34:37] And I totally agree, but you have to be comfortable spending money. And you guys were able to be within the budget, but it was very good that you guys were able to do that because probably Alex knows there’s been other renovations. I’m sure his son and I have seen it with other clients that unfortunately once they started renovation, which it did happen to one of my clients, that they had a great budget and unfortunately, they used a lot of their investments and then it actually comes that.
[00:35:05] They actually didn’t have enough money to finish the renovations. So, it does happen. Again, you guys were great that we’re able to be within budget and had extra money for, you know the furniture and everything else. But there’s a lot of people that unfortunately they don’t, and they do go over budget and they need to be aware that there’s other options.
[00:35:24] Like I had a client where, you know, they did have a major renovation like you guys and builder called me and he’s like the clients won’t get any more money from their bank. So, I actually had to go, and I said, okay, are you guys have enough money to do the renovations? You’re like, Yeah, we’re good. And I’m like, okay, no problem.
[00:35:41] So what I did is I got them financing because they had the money to finish the renovations, but then they still had to pay back their investments. Right. So, I was able to find them a lender that actually got them a lot more money that they needed, which is great, but they had to be at 95% complete for them to be able to get that money.
[00:35:57] But then we’re like, Okay, year will be done in like 120 days, so we’re good. And all that kind of stuff. We just had to wait for it to finish. And then they called me about two months in and they’re like, some things came up and we did have to change a few things and had to make a few more decisions and we’re out of money and the builders like needs the money, like they can’t.
[00:36:14] The renovation, right? So, we did have to go to a private lender to actually get them the money in between to be able for them to finish the renovation. Are they going to be able to pay that back? And it maybe not just this couple aside, it’s like when people start getting down that route of like borrowing and boring and borrowing it, how do you as a professional, make sure that it’s something that they’re going to hopefully be able to pay back and not get too much into a hole that they’re stuck in?
[00:36:40] And that’s the thing, because I actually work alongside with a client and the builder, I don’t disclose financial information to the builder, but I do work with the builder and the client. It’s like, okay, where are we at? This is how much your money’s going to be needed and everything else. Like the conversation on my client is really the client.
[00:36:55] The homeowner is not the builder, but I do work with them as like, let’s look at the budgets and stuff. So, well, again, I had the full amount approved, but they, they couldn’t finish the home, so they needed money ahead of time before the house was at 95% complete. Because even though it, it was a regular lender, they still couldn’t access that money until the house was finished.
[00:37:14] So, because that was the case, we had to go to a private lender to get them the money to really get to 95% for them to be able to finish the. And that actually happens very often. I get a lot of calls, we’re $50,000 short. I have this great relationship with the bank and my family has been banking there for like ever.
[00:37:31] And it’s like they just won’t give me one more send. Like, what can you help us? And that’s what I do. Right? So, it’s better that you actually get financing, like you guys get the financing ahead when you start doing renovations during the planning process. Don’t get it in the middle of the construction because it’s very hard.
[00:37:47] Like because the lender’s going to ask for an appraisal, they’re going to go in and if they see gutted walls and everything else, they’re not going to give you any money. Right? So again, it’s having the right builder, having the right strategy, having the right team in place to make sure that you guys are able to carry it.
[00:38:01] So you guys were great that you were able to be within budget. There’s a lot of clients, especially with shortage of supply, you know, supply chain issues and labor shortages and everything else. I mean, prices are going up, inflation’s going up, even though it’s the most, the best budget you can ever have.
[00:38:17] Things do come up and is able to have again, that. Buffer, that contingency fund to be able to do it and make sure you have that money available when the builder’s going to require it. And that’s one thing I also wanted to mention, which I think maybe was a bit of a saving grace for Skyline, Justin, and I don’t know how other people do it.
[00:38:34] So I’d like a little bit of your advice on this, Alisa is. They were lucky and they mentioned it earlier in this episode. They were fortunate that they did have the base suite that they could live in during the renovation. A lot of people don’t have that luxury when they do a full rent out. They do have to put money aside to either rent out a place if they don’t have the luxury to live with family or friends during that.
[00:38:54] So that could be an extra cost of where do you stay when you’re going to do a renovation? The renovation cost is like, where are you going to live? Right? Because yeah, like if you don’t have a place that you can live with family or live in the basement suite and you have to essentially move out, is like, well, that’s the cost shelter, because you’re still going to have to pay the mortgage.
[00:39:11] So then you have two costs. You have the mortgage and then you have, you know, even if you’re renting a place for a few months, or it could be up to a year, I guess it just depends because things do come up like you guys, you know, is the roofing and engineering and everything else. That just adds to the timeline as much as everybody.
[00:39:26] Fantastic. What they do, things do come up, right? So, it’s really having that contingency fund, and again, that’s why I say it’s critical to have the right team in place from the very beginning. Okay. As we close out of here, this is our final episode, Final thoughts. We’ll start with you, Alisa. Final thoughts about Skyla and Justin’s home?
[00:39:45] Well, I’m just so excited for you guys and I’m definitely going to go and look at the website and, you know, look at the photos and everything, like, it’s so exciting. I really appreciate you guys inviting me to be part of this episode, and, and I actually do look forward to hearing the rest of how you guys started to, to now.
[00:40:00] So, it’s really exciting. And the general advice for just anybody, make sure you have the right team in place and make sure that you guys are comfortable with what you’re. There’s always money out there. We can always get you the money, but let’s start at getting you guys at the best time possible.
[00:40:15] Perfect. And if you want to know more about Alisa, you can go to financing pros.ca. Okay. Moving over to Cara and Alex. Then we’ll wrap up with the homeowners. Your final thoughts on this project? I didn’t know until today where we had landed through construction on the budget. So, I think considering all things, you guys landed pretty well in the budget, and you have a beautiful home now and quite envious of it, and I hope you guys make lots of happy memories in it.
[00:40:43] Justin and Skyla and I, we have a good relationship. Obviously, you never want to go back to the client and ask for more money, even though it’s obviously justified, it’s never an easy conversation. Yeah, I think I’m happy with how that process has gone.
Skyla, Justin, final thoughts from the homeowners? Do you want to do another renovation down the road?
[00:41:03] Yeah, I think we, you know, we survived. It was a bit of an emotional rollercoaster, but we’re really grateful that, you know, we do have the money to do this. And that’s what I always reframed to Justin, you know, instead of thinking, you know, it’s all dire, like how much is going out. It’s like how wonderful it is that we actually have the money to spend.
[00:41:23] We’re so happy. There’s nothing better than feeling settled in your own home and feeling like you can just live your life and your house is going to add to your life, not detract from it. And so, we’re, we’re really happy that we just have a, a place that we know is functional and that’s safe. And I’m looking forward to doing the basement, but I think Justin needs a, a breather here.
[00:41:45] We need to be fiscally responsible now and save our money. Yeah. I, I agree. I mean, I think. There was some ups and downs. Living in the basement was a challenge, but we’ve made a big investment in ourselves, and our family and I mean, it’s one of those big life projects that you don’t do too many of these, I imagine we’ll remember it for a long time.
[00:42:06] Excited to make memories in in the new house, and I’m glad we’ve kind of assembled a team here, like we have contacts now moving forward and in touch with Cara and Alex in the future. When we decide that, look at the basement. You know, even some other projects around. So, I’m glad that we’ve got to know everyone and really appreciate everyone’s hard work and very grateful.
[00:42:26] And thank you everyone. Well, thank you guys so much for doing this for us. It’s been a really insightful journey. I love watching this whole thing grow, and as I listen to every episode that led us up to this one, it’s just amazing to see the transformation. So, if you haven’t yet, make sure you check out all the photos at www.havan.ca/measuretwicecutonce.
[00:42:44] That wraps up season four. Again, big thank you to the homeowners Skyla and Justin, and Alisa for hopping on our final episode and of course the interior designer, Cara from Triple Dot Design Studio and Alex from Level One Construction. We’ve been so happy that you’ve been part of the process and allowing HAVAN to follow this wonderful project throughout. I think we started back in January, now it’s August. It’s been a long haul and I bet Skyla and Justin are ready to not only save more money but enjoy their space. And I agree with you, Justin. I hate it, taking money on my wallet for home renovations. I appreciate that.
[00:43:23] You’re a saver and we’ll give it some time and then maybe in a few years we’ll be back. To know how to renovate your basement part two with Skyla and Justin. So, thanks again and if you haven’t yet, make sure again you check out the website www.havan.ca/measuretwicecutonce. Not only are there photos on there, but you can also find all the information about the podcast and please follow us through there on all the platforms like Spotify, iTunes, Google, and there’s a few more listed on there as well.
[00:43:51] Whatever one you listen to your podcast on. So just follow our journey. Again, www.havan.ca/measuretwicecutonce. Thank you.
Thanks Jen.
Thanks Jen.
[00:44:06] Measure Twice, Cut Once is grateful to our podcast partners FortisBC and Ethical Flooring. Their support helps us share expert knowledge and resources with families looking to build, design and renovate the home right for you. Ethical Flooring is located in North Vancouver and specializes in the supply and installation of brand name flooring for residential renovations and custom-built homes.
[00:44:29] And the BC Energy step code program is a provincial standard moving the entire home building industry forward to build homes to better energy efficiency standards, which means better health comfort, and Safety. Be sure to check out www.betterhomesbc.ca to talk to your renovator or builder for the latest energy, rebates, and resources.
[00:44:48] If you’ve enjoyed this episode or have a friend or family member looking to renovate, be sure to share this podcast simply by following and sharing the podcast. You’ll be entered in to win a Napoleon Prestige P 500 stainless steel natural gas barbecue, valued at $1,549 compliments of FortisBC.
[00:45:09] Season four’s real time Reno has real resources we can all learn from. See you next time.
