in today's video I'm going to share with you these seven lessons I learned going from this to this
welcome to the frittata where I'm having a frittata so at the moment we have seven clients
that are in the process of actually building their dream lines here within the GTA area and
it really led me to thinking and wanted to share with you guys on my first build what were some
of the key points that I learned and I actually put together seven key lessons that I learned
during my first bill that I thought would be very helpful for anybody considering a builder
in the process of the current build right now so let's just dive right into it so lesson number
one was the location is far more important than the deal and what I mean about that is a lot of
clients will actually look for a deal when they're actually buying a piece of property that they're
thinking of building on so whether it's vacant land or whether it's going to be a house that
they're considering tearing down if they could buy something under market value at fifty or a hundred
thousand dollars that is their key driver and I want to warn them because that fifty thousand
dollars that they saved on the initial purchase of the land may actually cost them in the end because
in the resale value of that completed house the Delta between that that prime location on
the street back and on a ravine versus that that 50,000 100,000 they saved could be a difference
in terms of equity in the property of at least two hundred or two hundred fifty thousand and I
speak from experience there's at one point in time I was actually looking to purchase
land to do a bill and my budget was around six hundred fifty thousand and yet I realized that
houses in that area that the very most that they would sell for was around 1.6 million when they
were completed I figured the cost of construction is going to be the same and the time and effort
but it is going to be the same but yet if itís actually went a little bit further south closer
to the lake I was spending two hundred thousand more on the land but the resale value of that
house was almost a million dollars more so again I want to caution you very quickly don't necessarily
look for the deal all right you always want to get a deal but don't let that Trump the location
lesson number two you want to sort out your financing before you even start anything you
want to ensure that you're gonna be able to have the fun and once you purchase the land whether
there's an existing house on it and then to to actually do the construction to the point where
the house actually is you have your occupancy so a lot of things to take into consideration is or
it's where is that money going to come from a lot of people may think hey I have good credit I have
good income I should have no problem well there's a lot more to it if you're buying vacant land a
lot of banks don't want to give you a mortgage on vacant land if you're buying it an existing
house that's going to be on there you're going to tear it down one of the considerations is the bank
it's giving you the mortgage on the house doesn't necessarily let you tear down the house then you'd
be an infraction your mortgage so there's a lot of things you want to cover and get figured out best
thing to do is to talk to your mortgage broker or your bank and have that sort of note no the
other thing too is I personally want to have about 40% of the bill done using my own personal equity
so whether it's going to be cash I have on hand or whether it's equity within my existing home
because then when I'm about 40 percent away 40 percent through the build at that point it's a
lot easier to get additional financing whether it be through a tier one bank whether it's going
to be personal financing because they see a lot less risk because the house is moving along and
you have certainty I want those budget numbers are going to be because a lot of the materials
have been priced out and so is the labor number three be prepared to spend more than you budgeted
it's very common for somebody to have a certain budget on a build and spending on and the reason
why that happens is when they're actually doing the build whether it's spec or whether it's
going to be for their personal and primary home this is their dream home when they're evaluating
decisions they're looking at things like you know the hardwood floors and they're like wait between
this hardwood floor to this Harbor floor it's only difference of maybe fifty cents to a dollar
per square foot but on a four thousand put up and that has a pretty big impact and then if they make
the same if they use the same decision criteria on everything from doors and cabinets they're going
to be way over budget by the time they're done now if you're building on spec I also caution
you because a lot of times people's pride get in the way and they want to build this exceptional
home but they always got to look at the number so ultimately when I'm building something on
spec I'm always asking myself if I spend this am I gonna sell it for faster for more money and if the
case is no then I'm not gonna spend that money I'm gonna revert back and try to stay within my
existing budget number four when you're designing your home a lot of people have this expectation of
the size of the house that they want so they'll say I want three thousand square feet or I want
four thousand square feet and then they'll work with an architect or designer starting at that
point I'm gonna say this whatever you think you want in terms of size try to scale it down by 20%
you'll be surprised because you'll the perception is is that you've already you're comparing this
house to other houses that you saw that square footage or maybe your current house but if you
have a very efficient layout that 20% smaller home we still feel just as big as the house
that you have in mind and also the reason why that's important if you tell your architect or
designer that you want 4,000 square feet doesn't they are not forced to think as creatively and
they're gonna work with 4,000 square feet and all of a sudden you gonna find that your closets are
little too small or you wish your kitchen was a little bit bigger and I always see it the scope of
that project starts getting bigger and that 4,000 turns out to 4,200 or it turns out to 4,400 and
then when you look at the cost of construction on the cost per square foot you're going to be
way out of budget so the key thing is whatever you think the square footage is try to reduce
it by 20% and then that way once the floor plans are there if you need to increase it you have the
wiggle room number five make sure you engage the right team if you've never built before you want
to make sure that you engage the right designer or / architect along with the right when you're
looking at these different builders look at the work that they've already done projects
that they have as part of the portfolio talk to their existing customers and find out what that
experience was like and again if you're looking to build a house that's modern make sure that
that builder is built modern if you're looking at a traditional house make sure that that build
has been built traditional because there are certain things that are particular to each one
of those designs the other thing is when you're engaging the right team try to get them together
early at the same table before you even start on your designs because if you have a certain
budget all what's gonna happen is the Builder if you use at the table will tell you hey these
sort of things and features that you're looking at will work within the budget will not if you
just work directly with the architect and then have the design set up and then you go to your
Builder you're gonna find out and you're probably gonna be disappointed that hey there's no way that
we could build within that price point based on those features so having everybody together and
then collaborating and coming up with the right design at the right price point is going to be key
number six don't lose sight of the big picture I remember when I was building I had bad days
trades wouldn't show up when I would look it's and I felt like I was bleeding money I'd show up
at a site and I would see tons of trucks up there and I would see a bunch of people working on the
site looking at each individual and figuring how much I was paying them for the hour and it was it
was daunting we were stressing you out however when I looked at the big picture and I said you
know based on what I bought the land for based on what the construction was going to cost me based
on the projected cost because I hadn't finished yet and then I looked at the value that was there
when the house was finished it gave me a sense of comfort that I was doing the right thing because
it was still a good investment so again as you go through things you will have problems it will feel
like you're bleeding money but don't lose sight of the big picture there was a reason why you
did this in the first place so keep that in mind okay and I'll give you some sanity number seven
as I mentioned in number six there's gonna be bad days so number seven is try to enjoy the process
because ultimately this should be an opportunity for you family to get engaged get excited about
the process you know asking them your kids what are some of the features that they actually want
as part of the rooms having them involved in some of the color selections some of the
features visiting the site at certain milestones and I think that's going to relieve some of the
stress because again it will be stressful as you go through the process and you'll see that money
you're spending but it'll actually make it feel like it's worth the time and the effort and the
money if you're actually enjoying yourselves so that's all I got for you guys today if you guys
are interested in seeing our upcoming video which we're going to be talking about what
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