The Froogle Scott Chronicles: Mortgaging Our Souls In Paradise – Part 7: Renovation Nervosa Continued

Brace your floorboards and tighten your joists, because here’s the next episode of Froogle Scott’s story of the renovation of his Vancouver home. For those of you who want to catch up on earlier episodes, see here. We hope you enjoy Froogle’s ongoing account as much as we do. -vreaa

Part 7: Renovation Nervosa Continued

Recap
By September of 2007 the renovation of our house has been ongoing for a year, although it’s been more stop than start. We’ve replaced the drainage, gutted the bottom level of the house, engaged a structural engineer, and been issued the necessary development and building permits. We’ve already spent $30,000, close to a third of what we’re speculating might be a total budget of $100,000. A friend and I have made a good old mess of the basement slab by breaking a three-foot-wide strip of concrete the length of the house, and excavating a long trench, in preparation for a new concrete footing beneath a new weight-bearing wall. My wife and I have been managing and contracting the renovation work ourselves, often spending large amounts of time, and meeting with considerable frustration, in our attempts to hire contractors during Vancouver’s construction and real estate boom. I’ve now realized that my plan of doing substantial amounts of the work myself is unrealistic. It’s hard to do a full-time day job while also trying in the evenings and on weekends to advance a renovation project — especially one that appears to be evolving in scope from moderate to major. Fatigue is a definite factor. By choice, we don’t have a vehicle, which makes certain things more difficult. When I rent a wheelbarrow, demolition hammer, and fan for the concrete breaking, I use the wheelbarrow to transport the other tools from the building supply store — a fifteen-minute walk. When the first demolition hammer malfunctions, my wife has to jump in a cab to get a replacement. We’re losing rent every month the rental suite is out of commission. And there’s the small matter, with winter approaching, of no longer having a furnace to heat the house. I’m becoming more open to the idea of bringing someone in to help.
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Leonard
Our first move in this direction is to hire Leonard, a handyman recommended by friends — the friend who helped me with the concrete demo, and his partner. Leonard is a lone wolf, mostly working unassisted, although he does have an electrician he brings in when required. My friend’s partner describes Leonard as “an unreconstructed alpha male.” Although I have some alpha traits myself, her description doesn’t immediately set off alarm bells.
….The plan now is that Leonard will frame and plumb the new suite, and the electrician will do the wiring. I still have some idea that we might handle the drywalling ourselves. We’re already in discussions with an energy retrofit company about new windows and doors. I show Leonard the suite layout, which has now become part of the engineering drawings and the city’s permits. He doesn’t spend much time with it, preferring instead to pace off the dimensions of the two new bedrooms, the orientation of their doorways, a central hallway, walking through different versions of an imagined suite. My wife and I had done something similar ourselves, the final placement of interior partition walls isn’t carved in stone, it’s a relatively straightforward space to lay out, and I appreciate that builders with experience get good at visualizing the end results. Even so, I’m made a little nervous by the thought of a possible altered layout existing in Leonard’s head, rather than committed to paper.
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Slab decision
Before Leonard can begin, however, the foundation work has to be completed. In addition to the central footing, we’ve decided to replace the substandard basement slab. The demolition work for the footing has revealed the slab is only 2-1/2 inches thick, and was poured directly on top of brown soil, with no intervening moisture barrier or drainage rock between the concrete and the soil — typical of older houses that were never intended to have people living on the bottom level. The brown soil is damp, even at the end of summer after weeks of sunny weather, and in one spot a slender tree root has burrowed beneath the slab, all the way to the center point where we dig the trench for the footing. When we removed the old subfloor, the underlying 2×4 sleepers had numerous sections of rot where they’d been in direct contact with the slab. We could put in a new subfloor with various moisture-blocking attributes, but this approach is second-best because it doesn’t address the fundamental problem of too much moisture immediately below the slab. And reinstalling a subfloor would sacrifice the valuable inches of headroom we’ve gained by taking out the old one. The writing is already on the wall, or the floor, when we get a couple of days of rain, and I discover three inches of water in the bottom of the trench, indicating that the level of the water table during rainy periods is only a couple of feet below the surface. A new basement slab, with a moisture barrier and a good layer of drainage rock beneath, now seems imperative — at least to me.
….We’ve also made a decision about the chimney.
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Animal show
We go back and forth several times about whether or not to remove the chimney, or more correctly, the masonry flue, which runs from the slab to the roof at the exact center point of the house. The flue’s sole purpose has been to provide venting for the gas furnace and the gas hot water tank — the house doesn’t have a fireplace. But we no longer need the flue. The new, high efficiency gas furnace will vent through a pipe out the side of the house, and we’ve already switched to a new and bigger electric hot water tank that doesn’t require venting. And the furnace and the tank will no longer be located in the center of the suite, which was a terrible place for them from a layout standpoint. The flue also creates layout headaches, sitting right in the spot where we’d like to have a wide entranceway into an open-concept living room and kitchen. We’d love to have the flue gone, but it’s money we can spend on some other aspect of the renovation. My wife nixes the idea of me doing the demolition myself, and although I’ve been on the roof a couple of times, I’m not overly keen on clambering around up there with bricks. Taking the flue out also means bringing the renovation upstairs to some extent, and regardless of how well we seal up, probably creating a god-awful mess in our living area, which we’d hoped to avoid until later in the project.
(Hot water tank: $580)
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….Finally, encouraged by several different people who stress the long-term benefit, and the wasted space represented by an abandoned flue, we decide to accept the short-term pain and start phoning chimney companies. The familiar merry-go-round ensues, with contractors too busy, not interested in a small job, or not returning voicemail messages. We eventually hire a contractor who can’t be there to oversee the work himself, because he’s taking his first vacation in three years, but he’s confident that one of his lead workers can handle what is a straightforward job. I arrange to take a day off work so I can oversee the job.
….In the middle of September, the day for the chimney removal arrives. I’ve already done some preparatory work. In the office, on the main floor of the house, I’ve removed the drywall from two sides of the framing that boxes in the flue, pausing every few minutes to obsessively vacuum up the resulting dust with a HEPA vacuum, convinced that the dust is loaded with asbestos. Cutting the large rectangles of drywall requires going over and over the cuts with a stout Olfa knife, a time-consuming and tiring process. My biceps and shoulders are burning by the time I get each piece out. A saw would be much quicker, but create about ten times the dust. I’ve laid down cardboard to protect the wood floors, and along a runway to the front door. I’ve covered our desks and computers, and a bookcase, with poly, and also sealed off all the nearby doors. I’ve rented a Hilti chipper for breaking the mortar between the bricks, and a fan to vent all the crap that will no doubt be filling the air.
….The doorbell rings and two young guys are on the front porch, raring to go. The lead worker identifies himself, and after a brief consultation and a survey of the job, they get to work. The lead worker has an interesting way of tossing his ladder against the edge of the house roof and running up it almost simultaneously. Then running back down facing forward. A kind of Cirque du Soleil act. I notice his partner — who doesn’t share the lead worker’s lithe physique — is much more deliberate in setting the ladder and mounting it cautiously. They’re both cheerful enough guys, with lots of energy, and talkers. It emerges that the lead worker recruited his partner only a few nights previous, at the Cambie Hotel, a somewhat riotous drinking establishment on the periphery of the Downtown Eastside, with an outdoor patio popular with backpackers and young people traveling on a budget. When his partner is out of earshot, the lead worker tells me his partner was really shaking and gripping the ladder rails hard his first day on the job, both of them three storeys up, in a bit of a breeze, and hungover. “I could see sweat on his forehead! I don’t think he’s used to heights.” The lead worker is from the States, and his partner is from England. The English guy has been in Canada only three weeks, and makes some offhand remark about still needing to get his “hospital insurance” sorted out. They’re already smashing apart the flue, one guy on the roof, the other directly beneath him in the attic, being handed bricks, when it hits me that these two are probably working under the table, probably don’t have the necessary work permits, and if that’s the case, certainly aren’t covered by Workers’ Compensation, which could leave us liable if they have an accident. I’m not sure what to do, but they’re now both in the attic, hammering away with the Hilti chipper and a small sledge, lowering buckets of bricks through the attic hatch, the fan in the office below roaring, doing a reasonable job of venting the grey crud that’s sifting down from above. The thought of calling a halt, based only on suspicion, and setting the reno back a month while lining up another company, is extremely unappealing. Only one of the guys is wearing a mask, and it’s the cheapest and most ineffective type of white dust mask available, virtually useless even if worn properly, and he keeps pulling it aside to talk. I’m wearing a half-mask respirator, and I tell them that I have extra respirators if they want to use them. They initially decline, but after another ten minutes of eating dust from old mortar, which has a strange, slightly sweet, slightly rancid smell, in addition to the grit between the teeth, they take me up on my offer.
….I want these guys off the property as quickly as possible, so I decide to pitch in. My role is to run the wheelbarrow with bricks from the bottom of the front stairs, where they dump their buckets, to the roll-off container at the side of the street — and to check in to the office periodically to make sure they haven’t killed themselves.
….By mid-afternoon the last bricks are knocked apart in the basement and the flue is gone. The two guys have worked hard. Despite the fan, the office is under a layer of powdery mortar dust, like ash. I tell them not to worry about the clean-up, because I know the dust will have gone everywhere and I want it cleaned to my standards, which will probably take just as long as removing the flue.
….As previously arranged with the contractor, I give the lead worker a sealed envelope containing a cheque for the full amount for the job, which the lead worker will deliver to a member of the contractor’s family. The contractor was very specific about sealing the envelope — I’m assuming because he doesn’t want the two workers finding out what a small percentage of the take is theirs. I overhear the lead worker on his cell phone as he arranges to meet the family member, and asks if he and his partner can be given their most recent wages in cash at the meeting.
….We say our goodbyes. After their initial reluctance, the lead worker and his partner found the respirators quite to their liking, so I tell them to keep them. I also tell the English guy that he might want to get that health insurance stuff sorted out sooner rather than later, that if he breaks a leg on the job he could have a problem. They’re both in a good mood, already plotting the evening’s entertainment.
(Chimney removal: $2300)
(Tool rental: $100)
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Leonard gets to work
Throughout September, Leonard knocks off some small jobs in advance of the foundation work being completed. He moves the hot water tank from the basement to a shed beneath the back deck. The tank won’t be able to stay in the basement if we’re going to demolish the old slab. At my request, he gets some additional jack posts to strengthen the support either side of the central beam and posts, which will be coming out as part of the structural redesign to satisfy the city’s headroom requirements. He installs a Whirlybird turbine vent in the hole where the masonry flue exited the roof. And together, the two of us go to the building supply store to pick up various materials, including ducting and a vent for our range hood in the main floor kitchen. The range hood had vented into the masonry flue, but with the flue gone we need to install a new vent to get rid of cooking smells.
(Whirlybird, range hood vent supplies: $175)
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“This industry’s a nightmare”
The sales rep from the energy retrofit company is meeting with us the same Saturday morning that Leonard is installing the Whirlybird. I’m giving Leonard a hand, and running back and forth between the job outside and the meeting at the kitchen table. With the sales rep, we’re discussing replacing all the junky single-pane aluminum windows in the house with energy-efficient, double-glazed vinyl windows, and also getting new exterior doors, and increasing the attic insulation. My wife and I are not that enamoured of vinyl, but wood windows are three times the cost. And good quality vinyl windows aren’t cheap. The contract price for windows, doors, and insulation is $14,000, and most of that is the windows.
….We’ve had two or three meetings with the sales rep by this point, and our conversations have begun to range more generally over the whole business of renovation, construction, and the Vancouver real estate market. We’ve related our problems over the past year with trying to find and hire contractors, the difficulties of running the project ourselves, the increasing scope of the work. The sales rep relates some tales of woe from his perspective: the difficulty of finding and retaining good people, suppliers not delivering on time, customers changing their minds multiple times, the pressure that the boom is putting on everyone. “This industry’s a nightmare,” he says. It’s mostly my wife having this conversation, as I pop in and out. At one point, the sales rep suggests we should think about hiring a general contractor to manage the entire reno.
….Leonard and I head off to the building supply store. When we get to the ventilation section, Leonard begins loading the cart with duct and fittings that are four inches in diameter. During my research, I think I’ve read that vents for range hoods are supposed to use ducts that are six inches in diameter. I ask Leonard if this is the case. He smiles and looks down, shaking his head, while continuing to pull four-inch duct from the shelf. My alpha traits suddenly reawaken. Implying that I’m a dimwitted homeowner is not a particularly good client relations strategy. However, I’m not certain about the duct sizing, so I let it go. Although I do wonder why the store has so much six-inch duct and fittings sitting on the shelves.
….When I get back to the house my wife is still talking with the sales rep. She announces that we have a possibility for a general contractor. The sales rep has recommended someone, and while I’ve been at the store he offered to phone him and check his availability. My wife agreed and as it turns out, the general contractor is available. I’m not completely comfortable with the way things have transpired, but by this point I’ve accepted that the reno is a much larger project than I’d initially understood. It needs to be managed by someone who can bring the necessary skills, experience, and resources to bear — a general contractor with a crew, and access to the appropriate subtrades. So I’m willing to at least talk to this general contractor.
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First meeting
The following week I meet Nick Costa, the general contractor, for the first time. My initial impression is that he’s a good listener. We spend some time looking over the job, and I explain that we already have a contract in place for the foundation work, the energy retrofit work, and a new heating system. I explain the issue with the beam and the required headroom, and the proposed solution. And I tell him we have structural engineering drawings, and the necessary development and building permits. We discuss some of the specific details, and he seems to know his stuff. I also mention that we have a handyman working on the job and that we’d like any general contractor we hire to include him in the plans. Nick says Leonard could “maybe work on deficiencies.” This is the first time I’ve encountered the term ‘deficiencies’ in a construction context.
….When my wife gets home she asks what I thought of Nick. I reply that he seemed pretty good. That we could perhaps ask him for a quote on the remainder of the job. I also want to contact the builder who did a renovation for friends of ours a few years previous. Our friends speak highly of this particular builder, and specifically mentioned that he was honest. You could trust him.
….The one thing we can’t do is do nothing. The days are getting chillier. We need to get the foundation work completed and the furnace installed.
….(Nick Costa is not the general contractor’s real name. For reasons that will become apparent, I’m protecting his identity, and disguising or omitting details that don’t affect the essence of the story. All costs and renovation details are real.)
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Take this job and shove it
Now that we’re leaning toward hiring a general contractor, we need to think about how Leonard might be integrated into the ongoing work. At various points I’ve hinted to Leonard that we might bring in someone to manage the process. I’ve realized that Leonard’s one-man operation and working style are probably not a good fit for the size and scope of our reno, but more critically, they’re not a good fit with me. Based on the work Leonard has already done, I know there are going to be conflicts. Leonard will probably consider me picky, if he doesn’t already, and I already consider him too much of a cowboy: casual about the building code and permits, and not sharing my mania for detail. However, we like Leonard, and we admire him for not jacking up his rates to take advantage of desperate homeowners during the boom. He dislikes the gouging he’s seeing, and has chosen not to participate, although he easily could. Perhaps, if a general contractor were to oversee Leonard’s work, everyone could get what they want. But I was forgetting about the power of that alpha male thing.
….The final Saturday in September Leonard calls about something related to the job. I take the opportunity to tell him there’s a strong likelihood we’re going to hire a general contractor, and that we’re currently in discussions with one. I suggest that all of us could meet. Leonard doesn’t say much, his manner non-committal. It’s obvious he’s not happy. My wife winces at me when I get off the phone.
….A couple of hours later my wife is out, and I’m sitting in the house alone, at the computer, when the doorbell rings. I know immediately that it’s Leonard. I open the door and he’s standing on the porch, his face beneath his ballcap stony. He hands me an envelope. “Here’s my invoice.” He hands me the spare keys. “And here’s your keys.” And then he holds a business card in my face — “And here’s my business card that tells you I’m a general contractor too” — before whipping it away and stuffing it in a breast pocket.
….“It’s not right. I turned down other work so I could do your job and now you’re taking it away.”
….“We’re not taking it away. We’re just bringing in someone to manage the process. You don’t have to quit.”
….“You hired me. You didn’t hire me to work for someone else.”
….“Well, think about it. If you change your mind we’re still happy to have you work on the project.”
.“I don’t need to think about it. It’s not right.” Leonard turns his back and walks down the stairs.
….I close the door, a shitty feeling in my stomach. Leonard’s words sting. Although I also know it’s for the best. Leonard and I would have killed each other. My wife is quite upset when I tell her the news, and still feels bad two and a half years later.
….I am who I am. And Leonard is who he is. And my wife is who she is. People are who they are. And much of life is a continuous struggle, overt and covert, among warring personalities.
(Leonard’s invoice: $900)
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Quote and contract
Throughout October there is a protracted back and forth with Nick. We ask for a formal quote and are somewhat taken aback by the total price: $122,000. The quote includes the following work required to build the new rental suite: framing, plumbing, gas fitting, wiring, insulating, drywalling, finish carpentry, interior doors, hardwood and tile floors, lighting, new kitchen, bathroom, and laundry (cabinets, tile work, fixtures, and appliances), closet organizers, painting, a stone mantle for a gas fireplace, and blinds throughout the entire house. The quote does not include the foundation work, the new furnace and heating ducts, and the windows and exterior doors, which are contracts we’ve arranged separately. With the exception of the blinds, and extending the plumbing upstairs for a second laundry, the quote doesn’t apply to anything in the upper half of the house, or to anything on the exterior. $122,000, plus GST, for a new rental suite.
….I also speak with the builder who did our friends’ renovation. I tell him how we got his name, and he responds enthusiastically, recounting how much he and his crew enjoyed working for our friends. He’s apologetic when he tells me that he simply can’t take on any more work. He’s completely maxed out. And booking things a year in advance isn’t something he’s comfortable doing. He’s also moving away from basement renos, which aren’t his favourite. From this last piece of information I infer that in this current market builders with good reputations can pick and choose their jobs.
….My wife and I agree that $122,000 is more than we’re willing to spend, and we need to find ways of reducing the cost. The quote doesn’t provide individual item prices, however, making it difficult to know which items to target for cost reduction. As well, nowhere in the quote does it make clear how Nick is calculating his contractor’s fee. We get back to Nick and ask him to break out all item costs individually and indicate how his fee is calculated.
….A few days later Nick drops off a revised quote. He’s shaved off $5,000 from the total price, and provided individual item prices, but there’s still no explicit indication of how his fee is calculated. Is it a percentage? If so, is it applied to just labour, or to both materials and labour? I add up all the individual items in the quote and get a total of $103,000. The revised total price is $117,000, so we assume that the difference, $14,000, which works out to about 13.5% on everything — materials and labour — is the general contracting fee.
….We’re still having a hard time getting our heads around the total price. The individual item costs seem really high, especially the plumbing and the electrical work, at $8,000 and $12,000 respectively. And we’re uncomfortable about the lack of transparency regarding the contracting fee. My wife suggests we contact our builder friend who’s working on the million-dollar renovation in West Vancouver, and ask his opinion. I spend twenty minutes on the phone with him going over the various items in the quote. He agrees that the electrical is on the high side, but he considers the rest of the item prices fairly typical. New construction and renovation have just become very expensive with the real estate and building boom, and with the shortage of skilled labour in the lead-up to the Olympics. He also confirms that a typical general contracting fee is 15% to 17% on everything, labour and materials.
….We go to work on the quote, removing things we can do without (a built-in vacuum, an intercom), can do or purchase ourselves (window and door trim, closet organizers, painting, blinds, bathroom mirror, appliances, final cleaning), or handle under one of the other contracts (gas fitting). We email the revisions to Nick and tell him that we don’t want to spend more than $100,000. A week later he sends back a revised quote and a proposed contract. The total price is now $95,000 plus GST, which we’re more comfortable with, if still not exactly thrilled. However, he’s removed all the individual item prices, and there’s still no indication of how his contracting fee is calculated. I experience a tiny flare-up of anger.
….We tell Nick that the quote, now formalized as part of the contact, must have an individual price breakdown if we’re going to move forward. We also ask for three references. Nick tells us that for a fixed-price contract he doesn’t usually provide a breakdown, but he’s willing to do it. Another week elapses before the next revision of the contract arrives, the individual prices reinstated.
….In the interim, I’ve done some of my semi-frantic early morning research, and learned about ‘holdbacks’. Under British Columbia’s Builders Lien Act, property owners are required to hold back 10% of each progress payment to a general contractor as a pool of contingency money. In the event that the general contractor doesn’t pay one or more of the subcontractors or suppliers on a project, the subcontractors or suppliers can be paid from the holdback fund. If no problems arise, the holdback money is released to the general contractor 55 days after the contract is completed. I’ve also learned about the suggested scheduling of payments, known as ‘draws’, over the course of a project. Most of the sources I find state that an initial deposit paid to a contractor before work commences should be no more than 10% of the total project cost — a figure also corroborated by our builder friend. Nick’s payment schedule calls for a 30% deposit up front ($30,000), 30% after the drywall is completed, 30% upon delivery of the kitchen cabinets, and the final 10% upon completion of the project and passing of the final inspection.
….I don’t like the way the payments are structured, and I especially don’t like the honking big deposit. It all feels too skewed in Nick’s favour. I phone Nick and tell him that the most we’re willing to give him up front is 20%, and that the draws must be smaller and more frequent. And that the final draw must be 20%, not 10%. I ask how he feels about holdbacks and he says that none of his clients has ever required a holdback. Even though I’d like to use holdbacks, I let it go. My feeling is that the 20% final draw provides us with pretty good leverage should the work not be completed to our satisfaction. The contract and quote go back and forth a final time, and version #5 redistributes the payments into five equal amounts of 20% each. Nick also explains that his fee is built in to the individual contract items, and varies somewhat depending on the item, but averages out at around 15%.
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References
While Nick is responsive during the contract negotiation, he is less forthcoming with references. We have to prod him a couple of times before finally getting some names about ten days after we initially ask. One of his references is currently out of the country, although we’re welcome to contact him long-distance. Another owns a high-rise condo on False Creek that Nick’s company has recently renovated, and we can arrange to look at the work. And the third are a couple on the North Shore with a house where Nick’s crew is just wrapping up a medium-sized reno.
….I speak to the husband at the North Shore house. He’s pleased with the overall quality of the work, and praises the carpenter who would also be working on our place. However, he was upset on more than one occasion when the crew went missing in action for days at a time, with no advanced warning, and Nick wasn’t very prompt in returning his phone calls or providing an explanation. He eventually challenged Nick, complained about a lack of professionalism, and the situation improved. Enough so, that he would consider hiring him again. “But you need to keep tabs on him.”
….On the final Saturday in October we go to see the high-rise condo on False Creek. We’d expected to meet the owner, but Nick tells us on our way over that she’s out. We take the elevator to one of the upper floors and Nick takes us in. The place is very nice, the view spectacular. I spend a good amount of time looking closely at the joints in the woodwork, get down and inspect the grout in the kitchen floor tile, look at the finished edges of the drywall around the two-way gas fireplace between the living room and the master bedroom, and scrutinize a number of other small details where sloppy workmanship can become apparent. Everything looks good.
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Fateful decision
There’s still the third reference we could contact, but he’s in Europe, and the hassle of the time change, and calling long distance, isn’t that appealing. After leaving the condo, we’re walking with Nick through Home Depot. He’s offered to show us the style of vent he’s recommending for the range hood duct — which I’ve since confirmed is required by code to be six inches in diameter. Four-inch duct is for bathroom vents. “So, what do you think?” he asks, as we cruise the aisles. My wife and I, following behind, look briefly at each other, sort of nod, sort of wobble our heads a bit, sort of shrug a bit, the little micro-manifestations of weighing things, some of which are concrete, and some of which are intangible. The two of us are like the pans either side of old-fashioned scales, dipping back and forth before reaching equilibrium. “Yeah,” I respond. “We’re probably ready to sign.”
….Nick comes to the house the next day and we sit at the kitchen table and sign the contract. We also give him a cheque, written on our home equity line of credit, for the first draw. Before signing the contract, I ask him directly if he’s in danger of maxing himself out by taking on too much work. From my own days working for builders and tradesmen, I know they have to constantly overlap jobs, and have several things on the go, and several more in the pipeline, in order to ensure a steady flow of work and income for their crews and themselves. And the reference I spoke with has indicated this could be a problem area. “No, I’m careful not to take on more than I can handle.” I tell Nick that we understand there may be absences from time to time, but that the important thing is to communicate them in advance, to which he agrees. We talk about the cost, and he agrees that it’s expensive. “That’s what things cost now. The cost of everything is through the roof. Skilled trades are through the roof. But look at what you’re sitting on. You’re sitting on a property that’s probably going to be a million dollars in a few years. That’s the reality of Vancouver now, and the reality of construction and real estate. If you can’t make eighty to a hundred a year in Vancouver right now you’re a loser.” I’m assuming he means eighty to a hundred a year in construction or real estate. Neither my wife nor I make eighty thousand a year, so if he’s speaking more generally, he either assumes we make more money than we do, or the remark is just indiscreet.
(Nick’s first draw: $20,000)
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Why?
So after a month of negotiation and indecision we sign the contract. Neither of us feels quite right about the decision, but not wrong either. In hindsight, we can see that we rationalized away the feeling in our guts. We put our thumb on one side of the scale. There were a number of warning signs. The general contractor who is available almost immediately in the midst of a huge building boom. The contract numbers that appear and disappear and reappear. The mystery surrounding the contractor’s fee. The attempt to secure a large deposit up front. The long wait for questionable references — one out of the country, one not home (did she even know we were there?), and one with a decidedly mixed report. The focus on money (“eighty to a hundred a year”). But at the time we were less experienced as homeowners, and under pressure to make some kind of a decision. Nick was a convincing talker with confident, reasonable-sounding answers and solutions — suggesting the kind of expertise that we now felt was required. He was affable and easygoing, responsive to our demands, and we were in a bind — no furnace, no insulation in the bottom half of the house, the washer and dryer soon to be disconnected and stored in the garage, the scope of the project spiraling beyond what we could handle ourselves, and contractors of any sort very hard to come by. And in the fall of 2007, after four years of riding the real estate rocket, we’d accumulated $400,000 in equity. Nick’s talk of eventually sitting on a million-dollar property didn’t seem so farfetched. And both figures made the $100,000 price tag for the suite look modest in comparison — or at least manageable. Although as real estate bears will point out, those would be 100,000 real dollars, $100,000 in real debt, as opposed to 400,000 possible future dollars.
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Central footing
In early November the concrete contractor is finally available to do the central footing work. In preparation, Dylan, the lead carpenter Nick assigns to our project, and one of Nick’s labourers, remove the posts and the central supporting beam, the floor joists above now held up solely by the two rows of jack posts either side of the trench. The concrete crew brings in a pneumatic jackhammer to break apart the concrete pad that had supported the masonry flue, and excavates the small amount of remaining brown soil to complete the trench. Marco, the lead on the concrete crew, is a little leery of the jack posts, and recommends that we replace them with a couple of temporary 2×4 supporting walls. The additional expense is relatively minor, and somewhat offset by the rent we’ll no longer be paying on the jack posts. Because of the delays in moving the renovation forward, the jack posts have been in place for two months, costing us money. I’d thought we might need them for only a couple of weeks. I realize that using jack posts, instead of building temporary walls at the outset, was a mistake.
(Jack post rental: $500)
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The concrete crew builds the temporary walls, then removes the jack posts. They build the form for the footing, and place metal reinforcing bar in accordance with the structural engineering specifications. A couple of days later a concrete truck arrives first thing in the morning and the crew pours the footing. The work goes smoothly and when the forms are stripped we are left with a solid T-footing for a central supporting wall.
(Central footing: $2800)
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New footing for central supporting wall, with temporary walls either side
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Our first deficiency
Dylan and the labourer return and build the permanent 2×6 supporting wall on top of the new footing, and remove the two temporary supporting walls. The permanent supporting wall includes a ‘flush beam’ to create a seven-foot-wide opening that will eventually serve as the entranceway into the living room and kitchen. The ends of the floor joists at the center of the house now rest on top of the new supporting wall, where formerly they had rested on top of the old beam, or they are attached to the side of the flush beam with joist hangers. The wall looks good when I inspect it after work. The center of the house is now much better supported, and headroom is no longer an issue. Then I see an unpleasant sight: a roll of six-inch-wide sill gasket that Nick dropped off a couple of days previous, sitting in a corner, unused. Sill gasket is a thin, moisture-resistant foam strip required by the building code as a protective membrane between concrete and wood — in this case, between the horizontal bottom plate of the central supporting wall and the top of the footing. The sill gasket prevents any moisture that wicks up through the concrete from entering and eventually rotting the wood. Concrete and wood (unless it’s chemically treated) cannot be allowed to touch. It’s one of the basics of modern wood-frame construction — as I’ve recently learned from my reading. I get down on hands and knees and look closely at the point where the bottom plate meets the footing, working my way along a portion of the new wall, and confirm that indeed there’s no sill gasket between the two. Definitely an Ah, fuck! moment. The temporary walls will have to be rebuilt, and the central supporting wall at least partially disassembled, and the bottom plate lifted, so the sill gasket can be inserted. I phone Nick to give him the bad news. He comes over for a look and is obviously displeased. “They’ll be fixing that on their own time,” he says. Dylan shows up on Saturday and spends half a day making the fix. Our first ‘deficiency’. Not a good start.
.
Between a rock and a hard place
We now hit a snag. We need to demolish the remainder of the basement slab, and excavate about a foot of soil, to make way for the drainage rock and the new slab. No other work can proceed until the old slab is out and the new slab is in place. For a month I’ve been trying to line up Delmore, the concrete demolition contractor my friend told me about — the one who uses a remote-controlled micro excavator to do the work. Delmore is willing to do the job, has come to the house for a look, and thinks it will take two or three days and cost about $3000. Unfortunately, he’s bogged down on his current job, which keeps growing in scope, and has been complicated by running into a hard, compacted clay layer. Every week I phone him to try to arrange a start date, and every week he tells me that it’s going to be at least another week. I’ve just about given up. Marco and his company aren’t keen to use their precious resources on excavation, although they say they will if they absolutely have to, while at the same time warning us that it might not be the most cost-effective approach. I also talk to the junk removal guy who took away the debris from the demolished sub-floor. He and his sons are willing to demolish and remove the concrete for $4.00 a square foot, but they plan to use sledgehammers. I’ve already tested that method, and I know how slow and labour-intensive it is.
….I discuss the predicament with Nick and he offers to give us a quote for his company to do the work. This job would be an add-on to the existing contract. He tells us that he can probably do it for significantly less than Marco’s company. Nick’s suggestion looks like a solution to a frustrating hold-up, so we tell him to go ahead and put together a quote. A couple of evenings later he comes by the house with the quote. When he drops it on the table we’re both stunned. $11,000. Payable in full upon acceptance, as stipulated by the contract. The remaining floor area to be demolished is about 700 square feet. Removing a foot of soil beneath means an additional 700 cubic feet. I’ve already calculated that it will probably require three 10-yard roll-off containers, a yard being 27 cubic feet. Nick has specified six containers in his quote. He justifies the six loads by telling us that excavated soil tends to fluff up. It does, but not to that extent, or so I feel. Although the excavation is more work than we want to tackle ourselves, it’s not a big job as excavations go. We tell Nick we’ll consider his quote, but that we’ll keep pursuing other options for a few days. There’s no way we’re giving him an additional eleven grand.
….I decide to give Delmore one last try. He tells me his current job is getting close to wrapping up, and he has a window of two or three days the following week in which he could fit our job. However, he’ll need me to assist — specifically, to run the gas-powered track dumper, or “buggy” as he calls it, from the basement to the container while he operates the micro excavator. “No problem,” I tell him, and arrange to take the time off work.
.
Delmore to the rescue
The following week Delmore rolls up in his flatbed truck and trailer and unloads his machines — the buggy, and the remote-controlled Brokk demolition machine, which runs off electricity from a diesel generator. The Brokk looks like a tiny version of a backhoe, on two rubber tracks. It can be fitted with either a large, pointed breaker, for punching through and breaking apart concrete, or a bucket with teeth for lifting and excavating. Delmore manoeuvres both machines into the basement — the Brokk clearing the doorway by an inch — and we get to work. He tries the bucket first. He thinks the concrete may be thin enough that he can just crack it by bringing the teeth of the bucket down hard, and then lift the concrete in sections, working his way across the slab. Sure enough, this method works perfectly, the concrete coming up like pieces of ice on a pond.
.

Remote-controlled demolition machine lifting sections of the basement slab
.
As Delmore predicted, the breaking apart of the concrete goes quickly. What takes time is loading the broken sections of concrete into the buggy, and running the buggy out the door of the basement, around the corner of the house, and down the walkway to the flatbed truck. It takes me a while to get the feel for the buggy, which has two knobbed handles for individually controlling the tracks, a handle for the throttle, and another two smaller handles for raising, lowering, and dumping the load. Once I get comfortable with the buggy, we establish a good work rhythm with Delmore breaking apart the slab, the two of us loading the buggy, and me running the chunks of concrete out to the truck and dumping them. By mid-afternoon the slab is completely broken apart and the truck is fully loaded. There’s more concrete in the slab than the truck can manage in one load, so Delmore calls a halt for the day, and leaves for the concrete recycler with the first load.
.

The buggy
.

Getting instructions from Delmore
.
The next day we load the remainder of the concrete on to the truck and begin excavating the brown soil. The routine is much the same, although I now use a flat shovel to clean up behind the excavating bucket, and instead of dumping chunks of concrete on to the flatbed, I dump loads of brown soil into a roll-off container. This part of the job is a lot more time consuming than the concrete demolition, because of the volume of material requiring excavation, and the capacity of the buggy — the equivalent of three regular wheelbarrows. Moving three wheelbarrows of soil at a time is much better than moving one, but it’s still a lot of trips back and forth. We also have to coordinate with the disposal company to make sure a fresh container arrives at about the time the previous container is getting full.
By the end of the third day we’ve excavated all the soil, with the exception of a narrow band of soil we leave around the shallow perimeter walls as a precaution. The job is complete. We even have some nice-sized boulders for the garden — “dinosaur eggs” that Delmore digs out with the excavator. When Delmore gives us his invoice we’re pleasantly surprised. $2300. The disposal company he uses is also more reasonably priced than the bigger outfit we’d used during the trench and chimney jobs. Nick doesn’t say much when he drops by to look at the results, but I can tell he’s a little taken aback by how quickly we got it done. And perhaps feels a little sheepish when I tell him the price. Delmore is definitely one of the heroes of our renovation saga. And in his own way, Leonard is probably one too.
(Concrete demolition and excavation: $2300)
(Three roll-off containers: $1100)
.

Delmore’s dinosaur eggs

Episode 7 total: $32,449. Episode 6 total: $32,572. Running total: $65,021. Includes a number of smaller, miscellaneous expenses not listed individually in the episodes – mostly tools, small amounts of materials, and safety supplies.

Next episode
Part 8: “Renovation Nervosa Finale”
Things get much worse before they finally get better.
.
Financial details

.
From 2004 onward, all mortgage and LOC balances are as of 31 December of the year in question.
.
2003
Asking Price: $355,000
Sale Price: $355,000
Down payment: $88,750 (25%, ergo, no CMHC insurance, representing thousands of dollars of additional cost)
Mortgage (at purchase, Sep 2003): $266,250
Terms: 3 year fixed at 4.00%, 18 year amortization, bi-weekly payments
2003 Property Assessment (estimate of market value on July 1, 2002): $260,600
2004 Property Assessment (estimate of market value on July 1, 2003): $330,500
Equity based on assessment: $64,250
.
2004
Mortgage principal: $247,330
Terms: 3 year fixed at 4.00%, 18 year amortization, bi-weekly payments
2005 Property Assessment (estimate of market value on July 1, 2004): $420,000
Equity based on assessment: $172,670
.
2005
Mortgage principal: $201,829
Terms: 3 year fixed at 4.00%, 18 year amortization, bi-weekly payments
2006 Property Assessment (estimate of market value on July 1, 2005): $461,000
Equity based on assessment: $259,171
.
2006
Mortgage principal: $191,884
Terms: 5 year variable at Prime minus .75%, 25 year amortization, bi-weekly payments
HELOC balance: $4,291
HELOC interest rate: variable, at Prime.
2007 Property Assessment (estimate of market value on July 1, 2006): $570,000
Equity based on assessment: $373,825
.
2007
Mortgage principal: $183,063
Terms: 5 year variable at Prime minus .75%, 25 year amortization, bi-weekly payments
HELOC balance: $49,410
HELOC interest rate: variable, at Prime.
2008 Property Assessment (estimate of market value on July 1, 2007): $639,000
Equity based on assessment: $406,527

18 responses to “The Froogle Scott Chronicles: Mortgaging Our Souls In Paradise – Part 7: Renovation Nervosa Continued

  1. Great job documenting this project. Years ago I did something similar with an older house @ the top of Lonsdale Ave, N Van, built around 1908.

    Full time job and full time renos are a real challenge. I am glad I went through it then. Wouldn’t want to try it now.

    Really enjoy this site.

  2. A wonderful anecdote. If Frugal Scott pays himself a fair wage for his time and takes into account lost utility during the renovations, how much is the total bill I wonder?

  3. Just a note to remind Frugal that he should make sure his employees (roofers etc.) have insurance because otherwise he, as the homeowner, is liable for any injuries they may incur (such as falling off the roof while hungover). You can’t just assume a contractor has paid the required Workers’ Compensation and since these guys were being paid under the table I assume they weren’t covered by any insurance in which case the homeowner can be sued.

  4. Hi Scott,

    Another great article that is enjoyable to read. I look forward to your final post in this house renovation saga.

    Out of curiosity, who is the builder that did your friend’s renovation? Good general contractors are really hard to find in Vancouver, so it’s great to know who they are.

    Thanks,

    SL

    • Froogle Scott

      Hi SL,

      Thanks for your comment, and I’m glad you, and others, are enjoying the series. The renovation finale should be a bit hair-raising, from a financial perspective, if nothing else.

      Contact me offline for the builder’s info (froogle dot scott at gmail dot com). Things never aligned between us, so other than a name, I can’t provide anything more than what’s in the latest episode. That said, I don’t mind passing along the real names of people who appear to have conducted themselves in a reasonable fashion during the boom.

      Froogle Scott

  5. Such an amazing series. Thanks!

  6. I am reading this like reliving a bad dream, like watching a train wreck in slow motion. Having just more or less completed (is a homeowner’s job ever done?) a 2 year renovation on a 1965 bungalow in southwest Calgary, I know for a certainty how budgets, timelines and all good intentions, of how you much of the work you can do yourself, can oft go awry.

    It would be very interesting to see your ongoing tally summarized at the end of each episode. (surely the HELOC went up between episode 6 and 7).

    • Froogle Scott

      Hi ALBERTA GUY,

      There is something weirdly compelling about an unfolding disaster, especially if you’ve experienced some of the same things yourself.

      Ongoing tallies are easy to provide, now I have everything in a spreadsheet:

      Episode 6: $32,572.54
      Episode 7: $32,449.88
      Running total: $65,022.42

      The episode totals above are a little higher than what you get if you add up all the individual items listed in each episode. There were a number of smaller, miscellaneous expenses that I haven’t listed in the episodes – mostly tools, small amounts of materials, and safety supplies.

      The HELOC balances at the end of the episodes are as of the last day of each calendar year, so they don’t match up with the time periods covered by the episodes, which I guess is your point. The other thing to keep in mind is that throughout the renovation my wife and I, whenever possible, made lump sum payments against the HELOC balance, so the balance showing for any given year is less than the total amount of money spent.

      In the final renovation episode it’s my intention to have a section that gives a final grand total for the renovation, and perhaps explores some of the issues jesse mentions above – value of sweat equity, three years of lost rent, etc. Without giving away too much, let’s just say this section might be wince inducing.

      I also have a cost breakdown for an entire property renovation friends of ours a block away recently completed (entire house, garage, and landscaping), and price quotes for a renovation that other friends, also close by, are about to begin. So I’ve got some interesting comparator information that I’ll probably weave into the story.

      One of the things I want to achieve with the series is to show people what things really cost, and where the money goes. Documenting it all has been an awakening for me, along with what I’ve learned over the past few years from the real estate blogs. I now have a much better idea of the financial risks. As I said to my wife and one of the set of friends, “Knowing what I know now, I think I would have made some different choices.” One of the big issues, however, is that the Vancouver real estate and construction boom/bubble forced the hand of many of us. The sorts of choices we might have had in a more stable environment were taken away – assuming that you’d made that first, initial decision to buy rather than continue renting.

      Froogle Scott

  7. Peter Barlow

    Froogle,
    The story continues: epic in its scope, if less than Miltonic in its subject. However, few would have dedicated that same kind of Faulkneresque detail to the renovation of your kind of house. A cautionary tale for anyone thinking he/she can “make a couple of fixes here and there” and turn over a few million bills, because I suspect that your story is fairly mild compared to what some people have gone through.
    Can’t wait to read the rest of it, and eventually to see the place.

  8. Adanac bungalow

    Froogle – This has been a captivating story to date! Thanks for taking the time to publish this in such detail. I now eagerly await Part 8 of the saga. My wife and I have renovations in mind, and for some reason I’m still telling myself they’ll be minor and manageable…

    • Froogle Scott

      Thanks for your comment, Adanac. Various things have kept me away from the series over the past few weeks, but episode 8 will definitely be coming.

      As for renovations, the bigger they are, the more planning they require. And typically, they’re always bigger than you think. We backed into our reno, and made things more difficult for ourselves by insufficient planning. Friends nearby have just started a reno and have gone about it in a much more organized and well-planned fashion. No doubt there will be bumps along the way, but overall I expect their pain quotient will be less.

  9. “Delmore’s dinosaur eggs” are going to hatch on your lawn before the next installment hits the web page…. how are things going on the next chapter?

  10. Tristan Lawrence

    I have very much enjoyed this series and eagerly await the next installment!

  11. Froogle Scott

    Things are going… Things are going…

    I’m about halfway through the next episode, which will wrap up the renovation portion of things. But barbecue season has hit, and given that June was a bust, it seems everyone in Vancouver is now in a frenzy to have barbecues, which sometimes makes for a slow start the next morning. And there’s a short vacation coming up…

    I’m hoping to have episode 8 out toward the end of the first week of August. There should be a bit of fun stuff in there, so I’m hoping it’s worth the wait.

    Again, I appreciate the interest, and the patience. I’m equally eager to have Froogle move on with things.

  12. Just like everyone else, definitely looking forward to the next installment.

    Who needs reality TV anyway?

  13. Froogle Scott

    Hi folks,

    I’ve been working hard on episode 8 since getting back from vacation. I had hoped to have it done by today, but I’m going to need this weekend to wrap it up.

  14. Thanks, Froog…..your episodes are well worth the wait. Take your time with the latest episode….

    🙂

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