Episode 8 - Challenged to do it all. How did we do??
Episode 7 - Permits? Cash jobs? Say what?!
Episode 6 - Toronto's rent is skyrocketing. Why?!
Episode 5 - January stats with Natalia
Episode 4 - My name is Donny. And I am obsessed.
Episode 3 - Fixed vs Variable, Open vs Closed mortgage stuff
Episode 2 - Some game-changing tech updates?
Episode 1 - What happened in 2017, where are we in 2018?
TriplexTwo - Post 10 - Nearly halfway done, video update
We haven't been hiccup free, of course. 100 year old homes that have been abused are bound to have some issues. Our main ones have to do with water - and ways it's trying to make its way into the house.
As a homeowner - this is your number one focus. Water management. Pipes burst, foundations get weak, furnishings get destroyed -- all of that. From water finding its way into the house. So, roofs and water management outside the house -- all matters.
Anyhow, this isn't a post about water. That's another time's topic 🤒
This update is more of a video one. It's time to take you on a bit longer of a video tour into the home. Enjoy!
TriplexTwo - Post 9 - Roofing and Kitchens
Got the call the other day from Rob at Prolific Work (he’s managing this whole project for us). Few things we had to address. We knew that there were some roofing issues. There was water literally pouring into the house at the back, all because of a failing roof. We called in one of the bigger roofing shops to come in and assess. They said we needed a few new roofs for the home. Grand total of $12,000. We needed another quote to make sure this was reasonable. Our next recommended roofer came back and said the roof was not in bad shape, though it did need some tune-ups. For $1,000-1,500. Which sounded WAY better for us. So we’re working towards that.
Rob also said that we were ready to start ordering kitchen cupboards, kitchen counters and flooring. So, let the shopping begin!!
We don’t fully need appliances just yet, but we do need to know what size of appliances we’ll be buying. In the last place, I put in smaller appliances because I really didn’t have the space to accommodate much else. This time, we have space. I need to decide if we’re buying 24” or 30” appliances.
I reached out to my contact at The Brick, Sylvie. Basically if 30” was the same price of 24” appliances, I’d buy the larger ones. I assume the smaller appliances were cheaper. Well, I WAS WRONG. Without much of a fight, I’ve given up on even looking at 24” appliances, and went right to 30”.
I’d much prefer a ceramic top stove - they really just look so much better than the coil variety. As a landlord though, I just came out of a place that was tenanted and that had a ceramic top, and it was disgusting. Nothing we could do about cleaning it, it had to be replaced. With coil, it’s a lot more forgiving. So that’s what we’re going for. Bonus: they’re cheaper stoves in general.
For flooring, in my last place I bought vinyl plank flooring. Actually it’s called “Luxury Vinyl Flooring” for some reason. Is it luxurious? Sure? I mean, it’s flooring. It’s very similar to laminate flooring, only it’s made of vinyl. There’s no denting from high heels, and water won’t destroy it at all. It’s easy to install. It’s soft on your feet. It’s a winner. Costco has amazing flooring in this variety, and they ship for free, so that’s going to happen!
TriplexTwo - Post 8 - More Gas
Back on the whole gas meter stuff (yes, I know it's not very exciting, but not it's not all fun!) -- I'm kind of getting the run around from the Giant Gas Co on this whole thing. Just means I need to call them again, and probably again. We have 3 gas meters in the house. When we bought the house, I loved it. We were one step closer to having 3 entirely separately contained (and metered) apartments. Most of the stuff I see isn't like that. I'm fine to have 1 meter for the house, it just is easier for future tenants to have their very own separate bills for utilities.
We inspected the gas meters, and found that really - there's one "main" one that is giving us all the gas needed to heat the whole house and give the whole house hot water. The other 2 meters were just giving gas for a stove in each apartment. The account fees are awful for each meter, so we made the executive decision to make this fairer and use the one single meter going forward.
As that's happening, we see that Giant Gas Co has put a block on the gas line outside. I've been paying for a few months of gas, only to realize now that there is NO GAS EVEN GOING TO THE HOUSE!! So, I'll deal with that today.
Onto funner things now. ->
Remember the "pee room"? We opened that up (so its way more open concept), opened up the plaster covering the gorgeous brick wall that it faces, and are starting to insulate the walls so it's warmer in there. Well, there was one thing about that room that bothered me.
Before we tore down the walls in there, one of the walls essentially created a hallway closer to the stairs. The hallway was narrow, really narrow. To the point where we would probably have limited our tenant pool by a margin to not allow anyone anywhere near 200 pounds. I could barely fit through, and I wouldn't say I'm large at all. Moving furniture? Now that would be tough.
So by opening up that wall, we removed that hallway and made it all open concept. Except --> there's this one corner right at the end of the staircase that was like a bottleneck. It maintained that narrow space. I didn't want it. So I asked Rob to kindly remove that wall (which was a weird closet anyways) and open the whole thing up.
You know what? He did it! :)
TriplexTwo - Post 7 - Was there a fire?
We've really been motoring through the renovation these days. There are pretty much 3 people there each day working hard towards demolition and space planning.
Back when we bought the house, we noticed a pretty gaping hole in the ceiling of the ground floor bathroom - by the kitchen. It certainly looked like a plumbing issue was being looked at and that's why the ceiling was taken down. That may or may not have been true. Though that hole gives us a glimpse into what's between the ceiling of the ground floor and what's below the floor of the level above.
That glimpse shows us that there was definitely a FIRE in that area. And it was concealed. Have a look for yourselves at the progress in this video.
Still we're in great shape. We are doing renovations anyways so it's not as though it's a complete loss. We spoke with a lawyer who said that this looks like this was fraudulent misrepresentation. Could we sue? Yes. Should we sue? Probably. We're not those kind of people, though. We'll see what some more research will uncover.
We've found that we have some roofing repairs to make. Little surprise, but also, not really. The roof above the back extension is the one most needing repairs. And honestly, that whole extension is kinda crappy anyways, so we're all for making that more solid.
All in all, we're approaching the end of November, and we're getting less into demolition and way more into construction. So, yes, we are turning the corner!
TriplexTwo - Post 6 - Enbridge and Windows
We inherited the house with an old furnace and an even older water tank. Not sure if you know much about furnaces and water tanks, but they're pretty mandatory (and not inexpensive) if you're a homeowner. We knew we would be buying a new furnace - part of us erasing all of the sinfulness of the house. It was gross. The water tank was also old, and small for this size of house. So we knew we would get rid of that.
First step: call Enbridge. Goal: get them to come and get their stuff back!! It's a rental anyways.
Enbridge says: Hey! Thanks for calling - let's set up your account before we can do anything! So we do. And yes, we have 3 gas meters in the house. Which kinda baffles us. I mean, as a landlord I'd love to have everyone on their own meters so that they can cover their own usage. This would make even more sense if every unit had their own heat/hot water source. They don't - in this case. So why do we need 3 meters? The one meter is being used for the future furnace and hot water tank. What's the point in having the other 2 meters? The account fees alone will be about $30 for each meter (passed on to each tenant). The actual gas usage will come in around $3-4/month. This is silly, we say. Let's just scrap this whole thing, we'll absorb the gas bill for now and sort out the payment of that between the tenants later. Let's save everyone some money here, right?
Next, Enbridge says the water tank rental has been shifted to a new company - Enercare. So I have to call them, set up an account, in order to get them to take it away. WTF? Ok. So I do that. Now, I'm researching to see what this should be like. Luckily the unit is so old, we don't have to pay a lease-breaking fee (I wasn't as lucky with this on another project I'm working on, they want $770 to take away their own rental tank - from a contract with a prior owner - don't get me started).
Long and short of it, it's now gone. And we're planning for the next step along those lines. I'm jaded with the rental side of this market. I need time to cool off.
Oh - the windows are in! We got new windows!! Lovely, lovely windows. Ones that will keep the house in good temperature. And will give us excellent curb appeal. These guys came in at a great price and were so quick! All organized by our guy Rob again.
TriplexTwo - Post 5 - No more trenches
I tried to get in to the basement a bit more before they really started covering the new waste piping in the trench. But those guys wasted NO TIME!
Pro: great pace! The shorter the demo process, the less it costs us!
Con: not much footage of that process.
All in all, I'll take that trade off every single time. Sorry, audience!
Most of what happens in renovation mode is set up in the basement. So, planning for the furnace, the venting, the water lines, the gas lines, the drains in the ground, the insulation -- all of that has to be thought out before working on the basement. No point in finishing the basement only to dig up the floor, or take down the ceiling to run new vent lines or wiring, right?
From the outside, it's tough to be a spectator when this happens. It looks like nothing is going on. And that's just not true. There's never been a time when I've gone by that someone was not there working on the house. I really am so very pleased with the crew at the house. Great guys doing great things.
Shifting gears, we got a call from our neighbour (not attached neighbour). Not sure if it was coincidence or not - but it looks like since we started the demolition there has been a lot of cockroaches making their way into the neighbour's place. Not sure if it came from us (I'm SO sorry if so!) -- we haven't seen any evidence of these little buggers in our place. Let's hope it stays that way.
TriplexTwo - Post 4 - Trenches
Went and paid the guys a visit at the house the other day. Here's a quick update based on the actual units.
Basement:
The basement is thankfully and mercifully destroyed. Who knows how many sins were committed down there? But they're almost all erased. Whatever existed has been taken away. 🙏
We had a choice to make when we destroyed this level: do we replace the drain running under the floor, or trust that the old clay drain was going to hold up and not ruin our eventual tenant's finishings? We chose to run a completely new waste line. It's the right thing to do!! So we had to ask the crew to dig up these lovely trenches. In those trenches - eventually we'll drop a brand new waste line that will be made of future-proof material and set this house up for the next 100 years.
Main floor:
There were too many walls in this space. The entrance to the main floor suite is from the back. When you walked in you were faced with a couple of doors, more walls.. it didn't feel very welcoming or comfortable. So we changed that. Kaboom. Good-by walls.
The best surprise of the project to this point -- we opened up the plaster wall attached to the neighbouring house and discovered brick. Glorious, glorious brick.
The worst surprise of the project to this point was also discovered a few feet from that brick wall. Some owner at some point decided it might be a wonderful idea to disrupt the integrity of the entire friggin structure to make way for a pipe to fit in the bathroom. The floor honestly could have easily given way and imploded into the basement. 😳
Well we see that now, and we will fix that you nicely with some extra strong support. It's definitely a criminal move to leave it like that. Idiots that left it that way. Absurd.
Top floor:
Not much demo has happened here yet. The crew is working from the lower floors up.
All in all, we are so happy with the progress. So far so good! Up next: more demolition. More brick.
TriplexTwo - Post 3 - Renovations
Didn't take long to get started on this one! The week after we got the keys, the dumpster was in the front yard and we were ready to tear everything apart!
Our beautiful dumpster
It holds garbage, and dreams. In one safe place.
First part of renovation is demolition. We need to remove what's there, in order to put in what's new. We're taking down walls, we're taking out some ceilings, some floors -- tons of really bad appliances and planning a space re-arrangement.
There's also this wall of brick in the top floor kitchen. It's glorious. And it makes me want/need to see if we can expose more brick on the wall BEFORE the kitchen as well. The more brick the merrier, right?! Isn't that the expression? ;)
BRICK! In the upper kitchen
There's also this one room - we call it the pee room. Clearly, someone or some "thing" definitely used this room to go to when a "number 1" was in order. If a human being did this in here, it's inexcusable. The bathroom is right next to this room! If it was an animal (or an alien), I get it. It isn't their fault. Still... it absolutely stinks and it's gross. And the floor needs to get out of this house too.
Pee Room
It's smellier than it looks.
Not much more to discuss, but I will leave you all with some photos of the progress so you can see where we're headed. You'll notice we found a way to open up an entire wall on the ground floor and found all of this luscious brick! We'll be leaving that in the kitchen when we recreate that.
MORE BRICK!
TriplexTwo - Post 2 - The closing
Had to break it to my lovely wife that, yes, while we're planning a HUGE renovation for our new family home - we also just took on another mammoth project. It didn't go as bad as I thought it might.
Phew.
I'm a big fan of using OPM (other people's money) when buying places. Makes total sense to me. This project wasn't an exception to that. We definitely wanted to use OPM. We did face a bit of difficulty getting the financing we wanted from the lender we wanted. BUT -> where there's a will there's a way. We had the will, we found the way.
We borrowed money against our own homes via the Home Equity Line of Credits we all have on our valuable homes :)
Problem solved.
We nearly didn't close on the purchase. One of the partners (ahem, Sevan) forgot about the meeting with our lawyer to close on the purchase. So our lawyer had to have a "special" meeting for him. Haha. All good though.
One important part of this I wanted to bring up, was that we decided to create a holding company (a corporation) to own the property. It sets up an agreement for our partnership and creates another entity from which we can better use to manage the triplex financially, and for tax reasons.
While this is all happening - I called up Rob from Prolific Work. He basically did all of our first triplex for us and lives right by this new place. Seemed like another perfect fit. The verdict? He's totally on board. We established a budget, and off we went!
Next blog entry: RENOVATION with photos!!!
Demolition. Boom.
TriplexTwo - Post 1 - Got the itch
So, I'm out shopping with a client - looking for an investment property. Those that know me know that I specialize (and adore) working with multi-unit residential rental homes like duplexes and triplexes. I honestly feel it's the best type of investment out there. My financial planner hates me, I'm sure (Hey Adam!) - but I can't think of any better way of using money to make money.
Anyhow, I won't go too long on that part of it, that's another conversation. I've documented that before and I'm actually working on documenting it again for all to see. So, ya, that.
Alright, so I'm out with my amazing client Mary and out we are looking at a few triplexes. We came across one - a really, REALLY ugly one. Once again -> I think it's perfect. She has the vision as well and sees the potential to turn this thing around and make it a cash-flow cow. So we leave, we talk about the house on the way back home, and call it a night so that Mary can think about it.
In the end - it's the right project for her, just the wrong timing, so, regrettably, she has to pass. That's ok. It has to make sense.
I couldn't get it out of my mind though. I firmly believe this has the potential to be an absolute steal of a deal. For a variety of reasons, this place is priced low and there's every reason to believe that I could negotiate the sh!t out of this place. I personally just bought a home that my wife and I are renovating and moving into, so my capital is committed already. My mind instantly goes out to "Who is in a position to take this on, who's wealth can I build right now?"
I took that mentality and looked at my investor list - made a few calls. I was really proud to see that a bunch of people were able and willing to take this on! But like all things in life, the first one to show up usually wins. In this case, my pal Sevan (and his wife Aslin) stepped up immediately and recognized the opportunity.
We went right to bat for this one.. and nailed it. The place was listed at $719,000, had previously sold for $715,000 - though that buyer absolutely fell off the face of Earth and didn't show up. We bought it for $685,000.
While figuring things out financially and what this means for his family, Sevan really felt better splitting the winnings on this one and bringing in partners. This is where Ryan (and his wife Josie) and I come in. Sevan asked us if we'd consider joining him on this for 1/3 ownership each. Ryan was all in. I had to figure out a few things (including telling my wife how I could do this again to us) - but I was in. I'd figure out my side. I told them I was all in as well.
... and so it begins
renovations are next!