So you've built in fills inner city...

[yellowsnow]

I'm planning on buying a r2 lot inner city and building a couple in fills. Right now I'm just on the planning stage, trying to get the numbers to work before moving forward. I already live in a home inner city, and i saw tons of new in fills springing up these last 2 years.

I know lots of beyonders have built in fills from other threads. I'm hoping you can give me some insight what you would do differently, what worked well for you and how much ROI you made.

I understand times have changed, and prices are different now, and it's difficult finding a r2 lot for a good price. Still I think there are good opportunities out there.

[rizfarmer]

http://calgaryinfills.ca/Home.html

upcoming information session

[in*10*se]

^ useless session.

[RawB8figure]

I would recommend understanding building construction, figure out how you will finance the build and have a buffer. The banks I have dealt with will not give you a mortgage if you plan to remove the house, but there are ways around this.

I have found that R2 lots are selling for about 10-20k over asking(based on last two offers I put in mount pleasant area), so when you put in an offer keep that in mind.

ROI is decent, but I am expecting it to drop some as more and more green field builders are moving into this market. (ie. albi, birchwood, etc.)

[yellowsnow]

Originally posted by in*10*se
^ useless session.

why is it useless? My friend told me about it, and I am registered for that course already

[yellowsnow]

Originally posted by RawB8figure
I would recommend understanding building construction, figure out how you will finance the build and have a buffer. The banks I have dealt with will not give you a mortgage if you plan to remove the house, but there are ways around this.

I have found that R2 lots are selling for about 10-20k over asking(based on last two offers I put in mount pleasant area), so when you put in an offer keep that in mind.

ROI is decent, but I am expecting it to drop some as more and more green field builders are moving into this market. (ie. albi, birchwood, etc.)

Thanks for the tip. People are getting over their asking price on R2 lots?? that's news to me.

my biggest challenge would be securing the right financing in place. any recommendations for good mortgage brokers specializing in this area?

[kenny]

The info session you mentioned is really basic info. I was really bored last year and went to it. It's not surprisingly just a big sales pitch for the bank, realtor, designer and builder that is present.

It sounds like you already know more than what they're going to cover at the info session but you may find the one on one time after valuable if you have specific financing questions.

[TomcoPDR]

Originally posted by in*10*se
^ useless session.



Originally posted by yellowsnow


why is it useless? My friend told me about it, and I am registered for that course already

Because it seems like a promotional session hosted by a specific home builder (how "they" will be the only player doing things the right way) tagged alone with a specific banking representive (assuming some middle of totem pole, drag to sit in on these networking sessions on their weekend just to get their name/card out)

*ive been to a session similar to what's advertised in that link, except it was actually an industry private invite for real estate, bankers, etc. my banker got me a spot to go with him, hosted by a big name builder who has a huge ass 50,000 sqft fancy show warehouse. Session I went it, all about promoting the specific builder, and a sit-in bank representive offering "lowest rate in the industry"

[RawB8figure]

Originally posted by yellowsnow


Thanks for the tip. People are getting over their asking price on R2 lots?? that's news to me.

my biggest challenge would be securing the right financing in place. any recommendations for good mortgage brokers specializing in this area?

Yes on the last two lots I offered full asking price and the lot sold for more the same day. These ones sold within 24 hours of listing.

[C_Dave45]

If you have to start a thread and ask questions like this or are planning to attend some "seminar", then you're in way over your head to begin with.

[ercchry]

elnino is #1 awesome broker, guy has been overly patient with my endless questions over the last two months.

for financing its pretty simple.

so you buy your house with a standard open mortgage, you get all you permits and approvals in place, etc, etc

then when you are ready to build you need to remove all liens off title (ie. your mortgage). so you get a "builder's mortgage" this financing comes in three stages. each stage needs 20% down. some banks will use stage one to kill your mortgage and cash for demo/framing. i was told TD does this often.

then as you work through to completion you get your second and third stage of financing.

the avi urban guys were quoting $150-$175/sqft at the home show a few weeks ago.

so 2100sqft house+$400k lot=~$153k down

[RawB8figure]

Originally posted by ercchry
elnino is #1 awesome broker, guy has been overly patient with my endless questions over the last two months.

for financing its pretty simple.

so you buy your house with a standard open mortgage, you get all you permits and approvals in place, etc, etc

then when you are ready to build you need to remove all liens off title (ie. your mortgage). so you get a "builder's mortgage" this financing comes in three stages. each stage needs 20% down. some banks will use stage one to kill your mortgage and cash for demo/framing. i was told TD does this often.

then as you work through to completion you get your second and third stage of financing.

the avi urban guys were quoting $150-$175/sqft at the home show a few weeks ago.

so 2100sqft house+$400k lot=~$153k down

You may want to talk to TD for yourself as it doesnt quite work that way.

[ercchry]

this is what i was told... by a guy who only does this sort of thing for a living... i may be missing a step or two as it was just a brief rundown. but thats the key points.

[RawB8figure]

Can you PM me his contact info?

I have always been required to have the building sheathed before they would release the first draw. So you would need the funds for the land and structural component of building.

[ercchry]

He just went on vacation yesterday though so not sure if he has internet access.

[yellowsnow]

i would like to know his contact info too. if TD is able to pay off the balance of the mortgage on the 1st draw, then that is huge.

i guess it depends on how large the balance of the mtg is.

[yellowsnow]

i'm also looking at buying a pre-fab home. Some of the homes look pretty cool, and it costs roughly $200-$250/sq. The big benefit is the completion time is usually around 4 months or less. The faster it is to have the infill ready for sale, and not worry about weather conditions during the winter is a big plus.

Looking at Karoleena homes atm, they are based in Calgary.

[ercchry]

el-nino (http://forums.beyond.ca/member.php?s=&action=getinfo&userid=3108)

... send him a pm

[rizfarmer]

Originally posted by C_Dave45
If you have to start a thread and ask questions like this or are planning to attend some "seminar", then you're in way over your head to begin with.

not everyone that wants to build a house works in a trade; people need to start somewhere.

[RawB8figure]

Originally posted by yellowsnow
i would like to know his contact info too. if TD is able to pay off the balance of the mortgage on the 1st draw, then that is huge.

i guess it depends on how large the balance of the mtg is.

haha, let me know how that works out for you.

Think about what you are asking the bank to do and ask yourself if you would borrow that amount of money with no collateral.

Example:
1. House c/w land = 400k$
2. Remove house
3. Land = 250-275k$
4. Default on mortgage, bank is out 125-150k$.

Why would they take that kind of risk and a first time builder?

[ercchry]

i would hope that people planning to rip down homes are doing so to shitholes which are selling at land value :dunno:

[aaronzaski]

Originally posted by rizfarmer


not everyone that wants to build a house works in a trade; people need to start somewhere.

yes i agree. many here live in infill and can advise on what to do. when it comes to tile man, we may ask for opinion when we need it.

[90_Shelby]

Originally posted by RawB8figure


haha, let me know how that works out for you.

Think about what you are asking the bank to do and ask yourself if you would borrow that amount of money with no collateral.

Example:
1. House c/w land = 400k$
2. Remove house
3. Land = 250-275k$
4. Default on mortgage, bank is out 125-150k$.

Why would they take that kind of risk and a first time builder?

I understand what you're getting at regarding the banks concerns but in reality the land alone (house removed) is worth just as much as it was when there previously was a house. If the house was removed, the bank could still get $400K for that piece of land, they would not be out $125-150K. Unfortunately, they don't look at it this way.

[CSMRX7]

Here is what I have found for financing a new build, :

You will need 2 seperate loans, a land loan and a construction loan.


Upon purchase you will get the land loan, and this is based on the assed value of the land, you will usually need 25% down on the land. (Be careful that the house value is really low or you could get hit on accessed value by the bank)

You will then be responsible out of pocket for:

Design, permiting, demo, and construction to lock up phase. The bank will not release funds on the building loan until you are at lock up. Lockup means air tight, so windows, roof and locking doors are installed. Assume you will need 30-35% of the construction costs to get to this point. The bank will then release portions of the construction loan (usually 1/4 at a time), and then will come to the property and appraise the value of the work done before releasing the next portion of the funds.

You can then pay interest only on both loans until completion, but an FYI is that most banks want your home to be completed within 18 months, and the loan converted into a morgage at that time.

So if you are building 2 infills on an R2 lot ($1.3m total cost) you are looking at needing at least $400,000 in cash, or some other asset to secure additional financing on.

[RawB8figure]

Originally posted by 90_Shelby


I understand what you're getting at regarding the banks concerns but in reality the land alone (house removed) is worth just as much as it was when there previously was a house. If the house was removed, the bank could still get $400K for that piece of land, they would not be out $125-150K. Unfortunately, they don't look at it this way.

Thats the way it is. And no the bank would not be able to get 400k. Unless the property was sold as land only... But most R2 lots are not sold as land value only..

[you&me]

Originally posted by RawB8figure


Thats the way it is. And no the bank would not be able to get 400k. Unless the property was sold as land only... But most R2 lots are not sold as land value only..

That's exactly what they're sold as.

The value of the property is based on the zoning; an R1 lot isn't nearly as valuable as an R2 if all else is equal. It's the development potential of an R2 lot that sets the value and has nothing to do with the house that sits on it.

That being said, my understanding is that banks do apply some value to the structure and won't mortgage the same amount for land v. land and building.

CSMRX7 echos my experience...

[C_Dave45]

Originally posted by rizfarmer


not everyone that wants to build a house works in a trade; people need to start somewhere.

You don't start at the top. You hire someone to build it for you. If you want to do it yourself, try learning something small first. Paint your house a few times, see what's involved. Build a back deck...discover the problems that can go wrong. Reno a small room in your house. You don't jump out there and try to build a three-quarters of a million dollar project thinking "all I need is financing!".

This is what all these fucking "Flip this house", "property ladder", etc, reality-type crap shows are doing to the whole construction industry, ruining it. They watch a few shows and think "I can do that...I can build a house. It's easy. Grab some land, phone a few contractors, and build me a house...I'll save and make millions" :rolleyes:
And the same stupid mentality comes right down to trades. They watch some broad on "Property virgins" tile her kitchen splash, then they buy a cutter, attend a Home Depot Saturday afternoon "tiling class" and all of a sudden they're out there bidding against journeymen with no fucking clue what they're doing.

You think some person who doesn't know how to swing a hammer is going to build a house and make out as good as an experienced contractor with a team of professionals, not to mention YEARS of experience? Most GC's at one time were journeyman tradesmen. Carpenter, framer, cribber...and they spent years in their trade. Seeing all aspects of the build. Then they progress from there.

A general contractor is a trade in itself. It's not some idiot with a phone in his hand saying "build me something".

I run into this CONSTANTLY in this business. Idiots that think it's easy.

I had some stupid chick who was in the O&G industry. Had more letters behind her name than I have in my last...yeah she tried that. Had over a million dollars capital to work with too. "Oooo, I'm gonna buy me a girl-screwdriver and build me an infill" ....what happened? Me and about a dozen other tradesman got shafted out of about $50,000!! And the house was foreclosed on. BECAUSE SHE HAD NO FUCKING CLUE how to build a house!!!

If you're coming onto a car forum, asking how to go about building an infill..do yourself, and all us tradesmen a favor and don't!! Hire someone!! You'll get a better job in the end. And isn't that what you want? A PROFESSIONAL job for an investment of almost a million dollars??

[TomcoPDR]

Originally posted by C_Dave45

attend a Home Depot Saturday afternoon "tiling class" and all of a sudden they're out there bidding against journeymen with no fucking clue what they're doing.



I'll have you know, that's Home Depot UNIVERSITY. And yes, I actually do have my tiling badge from the Shawnessy branch... "Homer" taught me well, just, no one's responded to my Kijiji tile service ad yet. "Best price in town" !!!!!!!!!!!

[C_Dave45]

Originally posted by TomcoPDR


I'll have you know, that's Home Depot UNIVERSITY. And yes, I actually do have my tiling badge from the Shawnessy branch... "Homer" taught me well, just, no one's responded to my Kijiji tile service ad yet. "Best price in town" !!!!!!!!!!!

Lmao, Tom...You've shown me your tiling...I'm not worried!

[TomcoPDR]

Originally posted by C_Dave45


Lmao, Tom...You've shown me your tiling...I'm not worried!

That was BEFORE getting professionally trained. :D

[Type_S1]

Originally posted by C_Dave45

Big Rant

I have seen your work (on beyond) and you seem to do an awesome job but honestly...what is with the rant. You are generalizing every person who is not a contractor? I have never "professionally" built anything but have been volun-told since a young age on many projects from building sheds, garages, decks, fences patios, tiling, drywalling etc etc.

I would not consider myself a professional one bit but I can easily do 50%-75%% of the work a general contractor could (even though it may take me a day or two longer) without the average person seeing a difference in the work. Lets be honest now, doing this type of work isn't rocket science.

Now this is no disrespect to you at all...I would never be able to come close to the quality of work you can do but you have done some of the best work I have ever seen. The majority of "contractors" are just hacks who don't know their head from their ass and never had enough brains to do anything else. From my experience these type of guys are the ones that usually show up to do the work and I am wanting to do it myself after the first few hours.

Edit: OP...I agree with others in saying that if you haven't done a lot of improvement work yourself building an infill is probably not for you. Money sink and if you don't hit deadlines or unexpected issues come up you could lose your shirt.

[C_Dave45]

Originally posted by Type_S1
The majority of "contractors" are just hacks who don't know their head from their ass and never had enough brains to do anything else.

These are the ones who went onto a forum and asked how to build a house.

You've just proven my whole rant. These "idiots" you see, are precisely who I'm talking about.

[suntan]

Originally posted by C_Dave45

I had some stupid chick who was in the O&G industry. Had more letters behind her name than I have in my last...yeah she tried that. Had over a million dollars capital to work with too. "Oooo, I'm gonna buy me a girl-screwdriver and build me an infill" ....what happened? Me and about a dozen other tradesman got shafted out of about $50,000!! And the house was foreclosed on. BECAUSE SHE HAD NO FUCKING CLUE how to build a house!!! Wow. I would've broken her hands with a sledgehammer.

I guess that's why I don't do trades.

[yellowsnow]

touchy subject for you huh?

no where did i say i was going to be contracting trades myself. dunno where u got that idea. i'll be hiring a builder, does that make u sleep better at night?

all your comments are just f*cking irrelevant.

if u just wanted to rant, just start your own thread. thanks bye.

[yellowsnow]

Originally posted by RawB8figure


haha, let me know how that works out for you.

Think about what you are asking the bank to do and ask yourself if you would borrow that amount of money with no collateral.

Example:
1. House c/w land = 400k$
2. Remove house
3. Land = 250-275k$
4. Default on mortgage, bank is out 125-150k$.

Why would they take that kind of risk and a first time builder?

yeah i'm not expecting the banks to go with that either haha... i just would like to know how el-nino plans to set up the finance.

[TomcoPDR]

I'm actually excited to see a build thread for this. :bigpimp:

[RawB8figure]

Originally posted by you&me


That's exactly what they're sold as.

The value of the property is based on the zoning; an R1 lot isn't nearly as valuable as an R2 if all else is equal. It's the development potential of an R2 lot that sets the value and has nothing to do with the house that sits on it.

That being said, my understanding is that banks do apply some value to the structure and won't mortgage the same amount for land v. land and building.

CSMRX7 echos my experience...

:rofl:

:facepalm:

[msommers]

My step-brother and his wife have a custom home company. What they've gone through over the years to find quality workers sounds like a giant pain in the ass. They now have people they're satisfied and are reliable (another huge hurdle apparently). Probably not such a big deal now but when the boom was going on, guys would just not show up because some other dude is paying them a dollar an hour more!

I know if I was doing an infill, for how many headaches they've gone through and been doing this for years, doing it once and hoping to get quality workers seems like more trouble that it's worth for saving some cash.

[BananaFob]

Originally posted by CSMRX7
Here is what I have found for financing a new build, :

You will need 2 seperate loans, a land loan and a construction loan.


Upon purchase you will get the land loan, and this is based on the assed value of the land, you will usually need 25% down on the land. (Be careful that the house value is really low or you could get hit on accessed value by the bank)

You will then be responsible out of pocket for:

Design, permiting, demo, and construction to lock up phase. The bank will not release funds on the building loan until you are at lock up. Lockup means air tight, so windows, roof and locking doors are installed. Assume you will need 30-35% of the construction costs to get to this point. The bank will then release portions of the construction loan (usually 1/4 at a time), and then will come to the property and appraise the value of the work done before releasing the next portion of the funds.

You can then pay interest only on both loans until completion, but an FYI is that most banks want your home to be completed within 18 months, and the loan converted into a morgage at that time.

So if you are building 2 infills on an R2 lot ($1.3m total cost) you are looking at needing at least $400,000 in cash, or some other asset to secure additional financing on.

It can be done with one loan facility. Just recently brokered 90% Loan to Cost with land takedown worked in to one facility. Loan converts to standard construction loan once he has permits in place and then does progressive draws verified by quantity surveyor.

[CSMRX7]

Originally posted by BananaFob


It can be done with one loan facility. Just recently brokered 90% Loan to Cost with land takedown worked in to one facility. Loan converts to standard construction loan once he has permits in place and then does progressive draws verified by quantity surveyor.

Interesting how recent is that? We should maybe talk...

[Frankie88]

CASH FLOW is the key, most banks are only willing to do 50% LTV on land to start, draw mortgage is not as simple as conventional mortgage

[yellowsnow]

Originally posted by BananaFob


It can be done with one loan facility. Just recently brokered 90% Loan to Cost with land takedown worked in to one facility. Loan converts to standard construction loan once he has permits in place and then does progressive draws verified by quantity surveyor.

who is this with? or which broker gave u that?

[ercchry]

he was the broker...

[XylathaneGTR]

Originally posted by Type_S1

Rant from a generalizing shithead

Wow dude...

[you&me]

Originally posted by RawB8figure


:rofl:

:facepalm:

Thanks for sharing your insight. Based on your reply, you're obviously well versed in the redevelopment of inner city land.

For those of us that aren't ( :rofl: ), can you please explain what ratio you use to calculate the value difference between an R2 property that is bare land and one with an existing tear-down structure?

[speedog]

Wow, so much e-thuggery in here.

[RawB8figure]

Originally posted by speedog
Wow, so much e-thuggery in here.

Agreed.

Started out trying to help, but now I feel like being an asshole. So I will stop here.

[InRich]

Originally posted by C_Dave45
If you have to start a thread and ask questions like this or are planning to attend some "seminar", then you're in way over your head to begin with.

yeap... I almost have enough contacts, (contractors) where I could build a new house from scratch, and I'd still be shitting my pants if I had to do this.

I hope OP has a huge collection of business cards for this

[ercchry]

Originally posted by InRich


yeap... I almost have enough contacts, (contractors) where I could build a new house from scratch, and I'd still be shitting my pants if I had to do this.

I hope OP has a huge collection of business cards for this

the lack of reading is nuts around here :nut:

step 1: call realtor
step 2: buy R2 property at land value
step 3: call builder
step 4:????
step 5: profit

[Sugarphreak]

...

[C_Dave45]

Originally posted by yellowsnow
touchy subject for you huh?

no where did i say i was going to be contracting trades myself. dunno where u got that idea. i'll be hiring a builder, does that make u sleep better at night?

all your comments are just f*cking irrelevant.

if u just wanted to rant, just start your own thread. thanks bye.

Yes it IS a touchy subject to me, as it's how I make my living and put food on my family's table for the past 30+ years. And DAILY I run into "self-taught, DIY'ers" that make the job three times as difficult as it should be, and take money out of my pocket by either A) running out if funds on their projects and stiffing legitimate trades people, or B) driving the prices down by low-balling jobs because they don't know what they're doing.

You say you're just looking for a builder to build you an infill, well I'm sorry I misunderstood you and my rant was not directed at you per se, then. But why not state that in your OP or thread title; "looking for a builder for an infill". They are the ones that can answer these questions, and will direct you as to steps involved, required financing, etc.
But I didn't read that...I read general questions that pertain to doing this type of project completely by yourself. So forgive my misunderstanding.
My points still stand as to amateur contractors wanting to take on too large of projects.

[BananaFob]

Originally posted by CSMRX7


Interesting how recent is that? We should maybe talk...

Back in August. Land takedown just closed a few weeks ago though and now into construction stage.

Has to be structured as a commercial loan, so your regular personal banker won't be able to do it. That being said, my client was a first time homebuilder with good credit.

[Celica TVS3]

I recently built a a couple Infills (hired a builder). If you're serious and are willing/able to meet for a coffee downtown durring the work week, I'll walk you through my experience, process, costs by trade, hurdles...

I wouldn't use my builder again, but I can give you an idea of what I would be asking them when I interviewed them.

There is too much to cover to have a decent conversation online. I'll PM you my contact info.

[turbotrip]

the douche-baggery in this thread accurately represents the douche-baggery in real estate in the real world

[ExtraSlow]

Originally posted by turbotrip
the douche-baggery in this thread accurately represents the douche-baggery in real estate in the real world this.