hardship with grades - designed to fail by intent, by accident, or lack of knowledge?

Often the builder will struggle with grades, this can be self imposed (too high of a roof peak pushes the basement down into the dirt), or due to site condition (natural slope of land). Fighting grades is not a winnable scenario unless massive remedial action is taken. I have been the unfortunate holder of the wallet that has funded such conflicts, and I won the grade battle by losing the cash war.

I wonder if the grade issues you see on site are just poorly designed by someone without enough practical site knowledge, or is it an accident? Did the builder knowingly enter into the project satisfied to manage the grades during the build? If so, this is essentially deferring the problem into the future, yet as the building progresses, it gets continuously more difficult to fix the grades. There are work-arounds to being too low in the ground, but they will be hard, painful, and above all costly.

Here we have a new basement that is ready to pour. The red line is a demarkation of the ‘no wet’ zone. Moisture, dirt, etc, may not sit higher than the red line in order to create a moisture defensible wood structure. The top of the red line also represents the bottom of the stucco drip flashing, or siding, depending on what is used. I dont know of an exterior cladding that can be immersed in wet dirt, thus the grade of the sideyard needs to be a few inches below the red line, preferably that part is gravel, then a landscape fabric, then the dirt starts. The blue line represents the typical adjacent backfill height given existing grades as they pre-existed the project. Clearly this basement cannot be backfilled to the blue line because this results in wet dirt sitting against the wood structure, the grade is above the level of the flooring on the main level of this house.

Solutions are not great here. First of all, a taller concrete basement wall could have saved a lot of grief. That is the first change I would have advised, up front, as soon as the survey marks indicated a cut of 3.1 m, which is too tall (122 inches) and exceeds the height of the formwork. The cost of taller (10 ft) concrete walls is significant, but they are quickly done up front, and allow a much higher safe backfill level. The second option is to build a wooden retaining wall all along the 50 ft length of the house (and beyond to the garage location ultimately). This could be done in combination with a new fence right on the property line. This will be way more expensive and harder to do than taller concrete walls. Another issue is the disturbed ground of the excavation is a terrible place to be building a permanent dirt retention structure because it is settlement prone. Augering and grouting in support posts for a retaining wall in a 4 ft narrow sideyard with unstable fill is not easy whatsoever either.

The second problem is the height of land increases toward the lane, where the garage is. the garage pad will be significantly above the house, making for a much more costly garage pad structure. It makes sense that the back wall of the garage acts as a retaining wall (i.e has frost wall), with stairs down to the yard, and then the wooden retaining wall along the fence line continues to the garage, creating like a deeper but flatter back courtyard. All of this is costly work with equipment, lots of materials and effort, just to create the approximate condition that would have been already freely available on a flatter lot. The garage pad may end up being poured more like a foundation wall than a floating pad, with significant cost and multiple pours to complete that work.

It goes without saying that I looked at purchasing this property and another similar one on the same street, but I didnt bother. The purchase price wasn’t enough in my view to overcome the brain damage likely inflicted upon the builder to deal with the earthworks. There is a good likelihood that the cost to fight the grades will be substantial but the value created by winning the battle negligible. This is certainly an un-winnable fight from the value creation perspective. This project is just beginning so I will take a look at it once it is all resolved to see what they end up doing. Hopefully they have a good strategy to manage these grade problems (not really seeing evidence of this thus far), and a large wallet (remains to be seen for sure but what builder wants to waste a bunch of money). If not, they will be on the receiving end of a brutal construction learning experience.

Making a floor hole Q and A.

Had to patch a large hole in the floor we intentionally cut. And why do we do this?

q - what is the hole for?

a- to load drywall

q- why not use a door or window

a- not big enough. We use 54 inch drywall

q- why is the drywall not smaller

a- less joints less taping and sanding better finish

q- who carries in the drywall and why can’t they do it themselves

a- they’d butcher it. Hack up the floor and make a patch very hard. Better to feed it to them the way I want it done

q- is this the easiest way to get drywall into the basement? Isn’t there wires and plumbing

a- see answer above. You’ve got to cut the hole smart. Reserve the pieces in such a way it goes back together with glue and screws so no squeek later.

Ready to patch. Blocking and glue everywhere

Just like that. A hole in the ground is a major safety issue. I fixed it as soon as I could. Drywall boarders we’re just a few hours behind me and I didn’t want them in the area of the patch until it was 100%

More comments on specifications and building standards

Nothing is more enlightening than an apples to apples comparison among similar products to inform the mystery shopper, in this case, me. And what am I looking for? Is it any of my business to be some hell spawned secret Santa ruthlessly disparaging other builders’ work? Can’t seem to help myself either from doing this. Killarney is ground zero this year for observing construction specifications because without exaggeration there is a semi detached building (or three) underway on every block in this community (which is why I abandoned building here, and good riddance, a rare instance of some wisdom gained and applied from many years of building). Fertile ground to analyze quality, craft, and materials on essentially identical projects at all stages. I’m seeing a disturbing trend of turd like specs being masqueraded under a veneer of phony farmhouse newness. It is like a builder has an internal radar to costcut any item he believes the home buyer won’t know to look for. I don’t believe this is a healthy approach to creating a happy client. It helps to not care about that outcome when putting together the specs package.

This is the sticker you won’t see on many window packages because it isn’t indicative of a cost cutting approach to specifying an impossible to fix component of the new house.

Threshold of a character home

I have purchased a lot of inner city homes and the only way to deal with each of these homes has been demolition. What happens is these small, old, nasty and barely habitable shacks end up in the landfill. That is a sad loss of what was once raw natural resource manufactured into building product. However the homes are not saveable for so many reasons, reasons which are well documented in other discussions. A possible pitfall of making the types of purchase decision that I need to make at the speed I need to make them is you could land on some sort of black swan property. That’d be some historic designation or land use rule that won’t allow you to demolish the house on site. That is a real potential home builders nightmare to get stuck drastically over paying for a land deal where you can’t build anything on the land. In the case of a recent land purchase, the lot in question was located in a direct control zone which is a complicating factor. Studying the zone it was noted the older homes were identified as potential ‘character’ homes and there were rules in place to incentivize preservation. I felt the rules were not that well crafted. For example in the rowhouse zone you can’t save the existing old building which is centred on the heart of the buildable area. Regardless I bought this house anyway and pursued a ruling from the city on the character status. This was received today so we have the go ahead for some serious design work.

Character or just old. The interior lacks character to put it politely. I’ve declared the house to be condemned. It will come down soon.

Project neglect leads to zero project momentum

Semi detached update. Not a lot. Everyone is busy. If you are a good trade you are in demand right now. We’ve been focusing on other builds and letting this one languish. There are some good project management lessons here. A lot of what these builds are relate to momentum. With good momentum the project partly steers itself. Once it stalls it take a lot more management effort it boot it back up.

Garage framed, sidewalks poured, electrical started. This one got some momentum after languishing in project management wonderland. I like what I see from this build. Sound fundamentals lead to great detail opportunities. Totally changed the plans for the basement after I saw it in real time and space vs what the plans offered. I’m really enjoying building this model for the second time.

Bungalow sale

Haven’t been doing a lot of posting. Lots of weird website traffic from Belgium. I think maybe some Belgian scammer is trying to do a website takeover and assume my identity. Anyway, we are working through final details on the bungalow project. It is sold!

Cleaned up !

Lots of utilities underground

Reviewing some site plan data, lots of underground utilities including 4x gas, storm, sewer and water. Much specialty knowledge needs to be applied at this stage of the project. Our construction superpower may be fearlessness and confidence in our ability to overcome obstacles. Is this a superpower or just heightened folly? Delusions of construction ability become diminished once you’ve been kicked in the teeth a few times, or perhaps it is just getting kicked in the wallet enough that you develop immunity to the beatings.

What to build next

I’m back in that weird position. Have 4 great land deals in my inventory, this ties up a sum of cash that is unfathomably unproductive. Sort of creates the scenario where the poor builder has no way out but to build himself out. Also don’t enjoy building that sum of projects at once as it needs a bigger team structure. Yet fallow lands cost a great deal as they sit waiting for action. Yet each project requires a lot of energy to facilitate through permits and design. Plus have a couple on the go now that really need care and attention to complete. Perhaps the answer is a long winter shut down.

Project site is in use by someone else. I can fence it and perhaps need to do so for liability reasons.

Serious errors and pseudo knowledge published on the mls

I often come across dangerous pseudo knowledge among the realtors that are responsible to market a development property. I’ve theorized in the past that the realtors like to cultivate a persona of expertise but ride a thin line which is a suit of protective ‘accountability’ armour. Also, being able to plead ignorance of important details provides a waiver to relieve themselves of responsibility for misrepresentation in this profession, unlike virtually all others. The maddening lack of accountability for published errors is quite amusing at times, but would be less so for the buyer that is misled by the sweet talking salesperson. Do your own diligence is the second response upon being called out for publishing factual errors to embellish a listing. I don’t see that disclaimer here. Perhaps each listing should contain an asterisk that says warning the information above contains some or more elements of bullshit.

Blatant error here. A serious misrepresentation is published on the mls. Who polices this? Nobody. Who’s responsible for erroneous development advice? Nobody.

Black shower trims

Seems like everyone wants the black shower trims these days. They are expensive of course, but really nice. The cost to upgrade a whole house to black faucets is significant.

Hard to get hardwood

Here is a photo of a last possible second delivery of hardwood being loaded into my truck. This hardwood wasn’t actually mine, it was for another builder who’s possession date came and went a month ago. He didn’t get the hardwood and was forced to substitute. We ended up getting his. Whenever ours gets shipped someone else will get it. Giving fixed possession dates is another contractual error we’ve got to avoid in future. It is too difficult to meet optimistic or even realistic timelines.

What a relief when this showed up.

The next move in inner city land value is…down

2022 UPDATE- relisted at 799, I sort of figured this listing at $1.15m was a troll from the seller. He is still trolling me at 799, just somewhat less successfully.

I’m going to make an early prediction and that is the overheated land market goes down in the inner city. While cheap government manipulated interest rates remain low, the cost to build is getting too high in monetary terms and builder hardship in getting work done. This means risk is up and it isn’t a good time to overpay for land. Better to wait and have an opportunity to buy similarly overpriced land in another year when perhaps the commodities cost drops or somewhat normalizes. Our realtor friends like to downplay the true carrying cost of their overpriced listings because they market everything falsely as ‘revenue’ producing ‘holding’ property. A hilarious instance was noted recently where the land is supposedly valued at $1.125 million and it is claimed it produces $2k per month rent. In what world is that reasonable?

Revenue potential and the tenant wishes to stay. That’s a great deal for the landlord. The landlord can continue to subsidize the tenant by the $4k month difference between the rent and the cost to own the house. In realtor world this makes sense. In my world this is perhaps the worst land deal I have seen in 2021. Does that indicate a market top when you see outlandishly terrible deals? I think so. Also this awkward shaped lot isn’t great for redevelopment anyway. I’d not even buy this at 50% or its asking price.

Raspberry market update

Through the middle of may the raspberry canes are coming along very nicely. Even nicer than the raspberry canes was the first five months of the housing market. Many eyebrow raising sales were featured here over the past couple of months. Here are some observations

Inexplicable (to me) sales of inner city property that I think have poor outlook for future value - not to disparage someone’s dream home but I saw too many sales of houses that I’d stay far from. Houses that have poor future development potential have sold for really strong numbers.

demand is strong but supply is massive - so many investors are using 2021 to purge the flock of their worst, run down or worn out units. Other sellers are people that have needed to move for personal reasons for the past five years but held on stubbornly. So strong is the cult of real estate that most people assume price growth when they buy a property and it forms part of their identity. They can’t then sell at a loss for reasons like pride or whatever. Some of them are now finally able to move on with their lives by dumping a property into a sellers market.

the biggest factor is it is really irresistible to buy an asset with leverage, even one that comes with upkeep and ongoing taxation, when borrowing is done at suppressed money cost vs the real interest rates. We’ve entered into some serious inflationary pressure yet why not buy if you take on a loan at 1.5%. It is really cheap to make a payment on an expensive home with these rates.

new build prices are higher than ever before so old houses have more component value. At this point everyone has heard about lumber prices but it is also copper, plastic, metal and virtually everything. Buyers want to jump in the market because new prices have to escalate, possibly by a lot.

so it appears we have a market with pent up demand from the last few years which weren’t great for sales volume, and are adding fuel to the fire by pulling forward future demand into today with cheap money. The end result is the hottest market in calgary since 2014 or even longer. Another factor is prices are simply lower in calgary than other similar cities and calgary offers a pretty good lifestyle vs much of Canada.

the danger with all of this market activity is a lot of these buyers of older homes may not know how scarce manpower is and how costly major rehab work will be. I can see how many buyers will jump in and buy something and only later find out that the repairs needed were not scoped out properly by them and their helpful realtor pre purchase. To get the house fixed to a level they’d be comfortable is probably why someone such as myself would pass on a lot of these ‘deals’. With a real reno budget realized the end value is too low, so the purchase price needed to be discounted more to provide more room to pay for repairs. Then there is a six month period of stress and hardship to factor in too. And real cash is needed to fund repairs, not the banks credit line.

despite all of these factors, it is more fun to operate in a good market than a slow or declining market that we’ve been in now for years. Where the market goes I don’t know but I remain upbeat. The high cost to build now should trickle down to those five year old infills and support some appreciation. Land values are overheated and the builders are still bidding them up. Shortages are reported for many products meaning less homes are going to be built than otherwise would. This also suggests building, for those that can finish a job, will have a good buyer pool.

Expect another raspberry update when the fruit is ripe and the summer market is tapering out!

Nice looking raspberry cane growth in may.

Progress on multiple fronts

Lots of headwind on getting anything done is how I describe the calgary construction environment. Despite this we are pushing on at all phases of construction. The bungalow is proving to be the easiest by a huge margin, and the newer semi detached is moving based on some grit and some preparation.

Starting tile in Inglewood.

Property sales at values that simply boggle the mind

Not sure that ‘boggle’ is in the dictionary.

edit - it is. To astonish or overwhelm the mind when trying to imagine something.

Well consider me truly boggled. On occasion you see a property sell and you think that the seller was an absolute genius or the buyer needs sent to a Soviet style gulag for real estate re-education. A classic case is property that is heavily impacted by its location adjacent to a major negative, like a highway sound barrier wall. Most buyers would see something like that and pass on the opportunity. Some buyers would consider it at a huge discount. Apparently ‘A’ buyer felt it was a good deal and paid almost asking. If you asked me, and nobody does, or cares what I think, that property valuation should be vastly lower than what we see it transact for. The future potential for development is absent, and the price to earning ratio as a rental too out of whack to consider. What does that leave other than owner occupied? Have we now printed so much money that some buyers would prefer to throw money at any property just to get rid of cash?

Well and truly boggled I am.

My least favourite lot has been sitting on the market for years

Here is another noteworthy infill ‘opportunity’, emphasis on the quotation marks. This lot has been gathering dust on the mls based on two factors. Most obvious, the ludicrous valuation. Second, the hideous overhead hazard issue. Nobody will want to buy this and take on the liability that is built into it. Even worse is the liability is on the neighbouring side. That creates another problem in dealing with someone who may or may not be cooperative, yet cooperation is imperative to resolving the problem. Solving the hazard isn’t a value add for the builder it is more like a large cash transfer to the adjacent property in the form of necessary improvements. There could be a price that this makes sense to consider, but that price is way less than the seller would want to hear.

This slanty block wall is ready to fall over, but when a builder wants to cut a 9 ft hole immediately beside it (actually under it is most likely) this becomes a profoundly dangerous problem. What the solution appears to be is to remove the wall and regrade the side yard lower to the neighbors house. Then put in the new house basement walls. Then rebuild a very expensive retaining wall while an 8 ft access corridor exists between the houses and fill in both sides. How do you build a retaining wall against newly disturbed soil that is way deeper than the base of the wall would be? And then fence and landscape the area from the new retaining wall back to the existing house. Let’s throw out a number to do this $30k-$40, more? Given the pitfalls and headaches with this process, the time and effort involved, most builders will pass on this site and find a better lot elsewhere. Will this land ever sell?

Builder woes, how to throw money in a hole to make problems go away

When we build a house we like to use painful past experience to guide current practice. Except for those times when we don’t. Once unleashed, the inertia of the permitted, surveyed, excavated, engineered and pre ordered project is pretty hard to unwind. In that scenario it is often best to throw the money at the problem to make it go away permanently than to try half assed manoeuvres to defer the problem to a later date. The strategy to defer, delay and procrastinate will only snowball the problem making later fixes worse, more costly and more awful to deal with. The art is to know what do, who to call, how much to pay and precisely what the prescription is to leverage the most pain relief. This is the pulling off the bandaid approach to construction. When basement building, the key is depth of cut and grading. The situation faced was overly deep excavation created by pushing the building too deep in the ground to make the roof peak fit. The consequence was the top of wall being too low, and the sides of the excavated hole being unsafe, and the basement slab being so deep it can’t gravity drain. The solution was over height forms (large $), Shotcrete shoring for safety (large $), and lift station for the basement fixtures (large $). All this makes the builder toss an extra $15k into the hole. That hurts the budget vs a comparable home built by a smarter builder that would look identical but avoid $15k in unwanted expenditure. In our defence, none of this background fiasco slowed the project, decisions were made and the remedy work expedited in advance of when it was necessary. And nobody was at risk of being injured at the job site. Relearned lessons and more painful experience for the builder on basement building.

Passed inspection at the cash filled hole. Ready to frame to support the walls and then backfill.

Calgary…cheapest houses in the world ?

https://www.westerninvestor.com/news/alberta/calgary-world-s-most-affordable-city-for-housing-u-k-study-says-1.24304783

this post contrasts with some previous comments about the market overheating and a huge run up in costs to build. Examining the methodology of this study shows it is a little more bogus. It compares 1 bedroom condos across the entire world. That isn’t the most popular type of housing in calgary and prices of condos are down based on local market conditions. Regardless of our opinion on this study, being ranked #1 in any world wide study is really bizarre.

I’d like to see a better study done with more categories of housing included. 1 bedroom condos are similar everywhere, houses are totally different, so the comparisons will be less legitimate.

A greedy market, time for a pullback?

In today’s example It appears our brief lived (to date) sellers market has become a little greedy and this is a strong signal (to me) that a pullback is likely near. Price expectation from the seller ramps up so much faster than what new construction buyers are willing to pay for. Input costs are way up like never seen before. Now is simply not the time to overpay for b- land in the inner city. realtors and sellers, sure they can price a property at whatever they want to, but this property was $150k less a year ago. Is the market so different? Are the fundamentals that much better? To answer my own question, no, and some of the fundamentals have really soured on the building end for key inputs. Doubt this one sells without major reductions but it is noteworthy nonetheless.

Attention Builders and Investors*** if you buy this property you should immediately seek professional help. Following this you will be better able to make sound business decisions.

In praise of old concrete

Why don’t more old abandoned houses in calgary fail and topple over as they seem to in other jurisdictions? The main reason I think is the foundation integrity. The craftsmanship and quality of the old concrete is often amazing, in fact it can be perfect after 50,60,70 years or more. Being a deep frost region which you’d think would fracture the walls (doesn’t seem to though), also featuring a lot of glacial till soil that drains well, the thick and extremely hard concrete seems to last indefinitely. Unfortunately the concrete may be in good shape, but it is always in the wrong location on the lot, too small, and just overall a problem to get rid of. A good example is the Inglewood basement demolition project. Concrete is in perfect condition indistinguishable from the day it was mixed and poured which is really remarkable.

This is a golden oldie, but its life cycle is over as of today.