Conversions & Contracting Professionals Update

Ronald DeCouteau

Ronald: Thank you very much, Sarah. I always wanted to come to do this. Can I get everyone to put someone in the chat? I'm getting someone. Some twos as well. Sarah, there's a lot happening right now from a conversion standpoint, from a design standpoint, from a zoning standpoint that has changed the way that investors invest today. I'm going to go through a few of these things. There's no way I can go over all of it, but what I would suggest is you guys can reach out to me after the fact.

One of the things that I want to touch on here is, let's talk about what has really changed in the building departments? The procedure has changed. As you guys know, like we are in most municipalities and some building departments have not even reopened since March. That's a really long time. And it's a very short time, however, for us to pivot and decide and learn how to really submit drawings and how to get the information and feedback that we need in a timely fashion.

One of the things that I've seen is that we work in most municipalities and we do work throughout Ontario, especially in municipalities where investors find the best returns. We have been at a few of those before. And most of it is about this. If you drop off a hard copy drawing, for a conversion and a secondary unit or whatever you're planning to do. You oftentimes have to leave those drawings in a five day quarantine period.

What that means is that even if you have a timeline, you need to at least add an additional five days on. There's also online submission. I've always been really inclined to do online submissions even prior to COVID, but with COVID now organized submissions have become the absolute go-to. But with that said, It means that there's often a pre-screening process. Again, that's adding time to the process. And it is, you must work with someone who understands the process because every municipality has a very specific way. They want to have those things submitted during the pre-screening process when PMs are going to be issued and so forth.

I've found it to be a learning curve in some municipalities, like for example in Welland. It is a learning curve for me. The way they are processing these drawings sometimes is a little bit strange. You have to do some things online, but then you still have to submit checks, like mail it to them or jump in and out the front desk. That can be a little bit confusing for the investor, as well as even my sub just doing the coordination.

That's one of the things that I've changed, obviously the timelines, as we knew it before, as regulated in the province of Ontario. It takes 10 to 15 business days for the city to actually review these drawings. Now that has changed because most people now are working from home. If you call the billing department, you'll find that. Thank you for calling, just so we're not working from home. You could call me at 12, I'll just be rolling out of bed.

Guys, that was a joke. They're not rolling out the bed, but things are definitely taking a bit longer for review and to get responses normally would just be able to walk up to the very front and just say, hey, you know what? I actually have a drawing. Here's my problem. I need solutions. Now, you have to leave a voicemail or you have to send an email and they will straight up tell you, we are backlogged and you have to wait for a week until we get back to you, and that has really been. What I would suggest is that you guys think about adjusting your expectations when you're submitting these, having a designer, myself, submit these drawings because it will impact how you feel when you see you get these sort of delays.

Another thing is like building materials, even though I do some construction management on these, but I do know that from a building material standpoint, things have really increased guys. This is not your contractor or your designer trying to tell you now you need to put more into your investments. This has really happened and this is happening. And in the new year, you'll even find more and more that suppliers are going to be offloading. Those costs, those additional costs, there'll be offloading. On the end user, which is a contractor. And then of course he is going to bend, follow out of the investor.

You guys, really need to start thinking about how it is you're going to manage that. What it does, I'm doing on my end from a design perspective, I'm actually starting to speck. Lumber, you guys may know, has almost doubled in price, right? That's nominal size lumber. What I've started doing, specking steel. That's steel framing. You know, cold form steel. What it does is that it's again, you can reduce costs opposed to paying $8 for a two by four. $4 or $3 for studs and so forth. That's one of the things that I certainly wouldn't want you guys to keep in mind and take away from this conversation or this dialogue.

The other thing is so when somebody sends that, I find that. From a trending standpoint, I have found that I'm getting more requests or actually Luke mentioned this, but I'm getting much more requests for mine of various type applications and information and zoning changes, applications. A lot of investors now are starting to get a bit more savvy. Of course, they have taken baby steps and now they're starting to do bigger things, but also because there's very little supply on the market. Again, I'm not a realtor and there are experts that will be talking about that stuff. But from that standpoint, there is more.

There is less inventory on the market. What that means prices are going up and there's also more demand. So, more investors are truing their money into real estate. There's little supply. You have to get creative, you have to start looking at ways. Other ways of this, you can increase your return on your investment. And that often means, looking at a minor variance, looking at a zoning change and so forth. And again, I can get more into that, into those discussions as to what those things specifically mean.

The other thing that I'm doing from a design perspective as well. The way that we live and the way that we work and the way we play has changed, from a design perspective. I'm starting to look at how we can incorporate a COVID space. I work from home somewhere that the kids can go to school because now they're going to school in their homes, they're working from your home. You need to have spaces where people can really entertain in the backyard outdoors, where everyone can feel safe.

We were looking at incorporating it into our interior design. We're looking at incorporating office spaces. Sometimes in some municipalities it is really tight and sometimes it's near impossible. But we're trying to do those as well. Now on the outdoor side, we're trying to create separate yard spaces and so forth. That separating us, this is not new, but now it just makes more sense and adds more value and you'd get more interested in your units when you actually do. And again, in terms of where I see things trending, I find myself getting a lot more property requests.

I would say there seems to be more people in the market. There's a ton of new people, as well as savvy investors that are not true in their money at real estate. But they're going to the private lenders. Some of them have room to actually get more just from scheduling lenders. I can tell you, there's definitely more competition in the market, and I'm sure a lot of you can attest to that. They're like all 23,24 offers. There's nothing under five offers on any given property. Doesn't matter the type.