Canadian Contractor

Show me the money

Spray foam insulation

page 16

page 40

page 46

Dream renos

Inspectors

The Good, The Bad and The Ugly

A primer

BUILD | GROW | PROFIT

Building

Financing growth

CANADIAN

CONTRACTOR

Vancouver Specials

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CONTENTS

CONTENTS

features Vancouver Specials 16 From Plain Jane to the Belle of the Ball, these 1970s shoeboxes are becoming ideal houses to renovate

26

Building Inspectors 26 The good, the bad and the ugly side of building department sheriffs

Building

Painting The City of Gardens 34 Courtesy of Pro Painter magazine,a profile of Victoria, B.C. painter extraordinaire Brad McDonnell

Inspectors

Spray Foam Insulation 46 Steve Maxwell puts on his gear and shows us three applications where portable kits really shine

54

Thermostats

Now

Vancouver 16

specials

departments Online 6 A tale of two trucks, plus videos that show you how to problem-solve with clients and protect your reputation

Editorials 8 Rob on his Wild West renovation career, Steve on speaking up for contractors Voices 10 The downside of competitive bidding, enforcing licenses, regulating home inspectors, Ontario WSIB love-in

Site Notes 14 Owens-Corning and five builders join forces to build Net-Zero Energy homes

Martin Knowles Photo/Media

www.canadiancontractor.ca

Sept/Oct 2013

3

They build their

windows doors and

with the

environment

in mind

We waste less with sustainable solutions Some time ago, we made a deliberate decision to use, for a high-value purpose, every last bit of raw resource that enters our plants. We believe that building responsibly is just as important as building quality, which is why we instill sustainable and environmentally sound practices in to everything we do.

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69301 JW September Print - Canadian Contractor.indd 1

2013-08-09 9:59 AM

CONTENTS

creative

21

eye 46

spray

foam

Martin Knowles Photo/Media

CONTENTS

departments The Creative Eye 21 Continuing with our Vancouver Specials theme, more renovation excellence to inspire you Contractor U 40 Financing Growth: Part 2.

Four ways to find the necessary funds to expand your renovation company Stuff We Like 52 New products from Schluter, IRWIN, Bosch and Skil

new

52

products

The Mechanical Room 54 Technologically-advanced thermostats to keep your clients comfortable What Did They Pay? 58 Guess the cheque written for this custom-built pantry with solid birch pullouts

www.canadiancontractor.ca Larry Arnal Photography

Sept/Oct 2013

5

ONLINE @

@

Head to the Web for more exclusive stories and videos…

CANADIAN

ONLINE

CONTRACTOR BUILD | GROW | PROFIT

.ca

Join the conversation 16,832 contractors are having online VIDEO: TRUCKS

Steve’s two Ford pickups: A personal history Our tools editor, Steve Maxwell, writes and reports in a video about the two co-workers who have meant the most to him over the past 30 years of building and renovating: his Ford F-250 and F-150 trucks. Type “Steve’s two trucks” in the canadiancontractor.ca search bar to locate this video.

VIDEO: COACHES’ CORNER

Problem solving with Rob Koci and Mike Draper Hit a glitch on your client’s reno? That never happens, right? What most of us do is to forge ahead with ‘Plan B’ and this is often a mistake, counsels Mike Draper, contractor coach at Renovantage.com. Type “Coaches’ Corner” in the canadiancontractor.ca search bar to locate this and other similar videos.

VIDEO: MARKETING

Managing your online reputation with Rob Koci and Brian Sharwood Been slammed by a former customer online? Even the most professional contractors sometimes get bad reviews on contractor referral sites. We interviewed HomeStars’ Brian Sharwood for tips on how to manage your online reputation. Type “Sharwood” in the canadiancontractor.ca search bar to locate this and other similar videos.

RENO SUMMIT SEMINARS: REGISTER NOW!

CANADIAN

Here’s the page (www.renosummit.ca) where you can register for Canadian Contractor’s profit-building business seminars for renovators. They take place in Whitby, ON (Nov. 5), Toronto (Nov. 6) and London, ON (Nov. 8). Register now before these events sell out because space is strictly limited!

CONTRACTOR.ca BUILD | GROW | PROFIT

Volume 14, Number 5 September/October 2013 canadiancontractor.ca | Tel: 416 442 5600 | Fax: 416 510 5140 80 Valleybrook Drive, North York, ON, M3B 2S9 Canadian Contractor, established in 2000, is published 6 times a year by BIG Magazines LP, a division of Glacier BIG Holdings Company Ltd. ISSN 1498-8941 (Print) ISSN 1929-6495 (Online)

Editor: Steve Payne spayne@canadiancontractor.ca Contributing Editors: Mike Draper, David Godkin, Steve Maxwell Art Director: Mary Peligra mpeligra@bizinfogroup.ca Associate Publisher: Rob Koci rkoci@bizinfogroup.ca Production Manager: Gary White gwhite@bizinfogroup.ca

Business Information Group

Circulation Manager: Beata Olechnowicz bolechnowicz@bizinfogroup.ca

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Contents of this publication are protected by copyright and must not be reprinted in whole or in part without permission of the publisher.

Publications Mail Agreement No. 40069240 We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage.

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EDITORIALS

Voices

MY LIFE IN THE WILD WEST

By Rob Koci

I

began as editor of Canadian Contractor fresh off the jobsite so it was easy to remember why I had

got into renovations 20 years earlier. In one of my first editorials, I called this industry a “Wild West Show” and explained how I loved the freedom that was this business’s defining characteristic. I could be my own boss. I could get paid for hard work and the rules were relatively relaxed. Well, the enforcement was relaxed, anyway.

I remember taking my carpentry test for my general contractor’s city license. A good old boy ex-contractor, now a civil servant, handed me a carpenter square and asked me how I would take off the treads and risers of a closed staircase. I showed him, gave him my $10, and I was a certified carpenter as far as the City of Toronto was concerned. Five

” ” I got my license for ten bucks.

Rob Koci

Associate Publisher rkoci@bizinfogroup.ca

minutes, tops. I can’t image anyone caring less than him if I actually knew what I was doing.

So I started building. I learned as I went. I made lots of mistakes and some money along the way. It was fun and scary and full of life lessons.

I still think it is the spirit of independence and self-reliance that is at the core of the industry. It’s the guys who won’t take a handout, don’t give a crap about most of the rules and just like building excellent homes that make the industry tick and helps it survive the ever encroaching unionism/ bureaucracy/regulation/insanity of the rules-bent, paternalistic, unctuous, civil-service-salary-loving, meddling crowd that want to make a living off the guys doing all the work.

If we allow them to define the industry as they are trying to do, contracting will soon be just another job.

8

Sept/Oct 2013

www.canadiancontractor.ca

EDITORIALS

Voices

SPEAK UP OR LOSE WHAT WE HAVE

By Steve Payne

M

andatory WSIB in Ontario, no matter what other insurance you carry, costing you thousands of dollars in overlap policies. WSIB audits that come with unexpected, often unfair demands for tens of thousands of dollars, perhaps, in retro payments. Harmonized sales taxes in many provinces squashing renovation intentions.

The CRA looking at legitimate building permit applicants, rather than the fly-by-nighters who don’t even bother with permits, to decide who to audit next. Bureaucratic nightmare organizations like the new Ontario College of Trades (OCOT) demanding $120 a year from you to keep the same Certificate of Qualification you already earned and paid for.

The common theme here is bureaucrats behind desks who don’t go through a hundredth of the physical stress, financial risk or career uncertainty that you as a contractor do, insisting that you pay for their overspending, incompetence or (in the case of the OCOT) unjustifiable empire-building in the first place.

So, what to do? We’ve had lots of letters to the editor and posts on our website from angry contractors who are wondering when they are going to get treated with respect from governments at all levels As soon as we start making noise as an industry, is all I can say. You can get as privately mad as you want about any of the tax-grabs and deficit-recovery methods the government and its agencies are hitting you up with, but unless you speak up, who cares?

Why did you get into the renovations business in the first place? Rob’s story on the opposite page is not uncommon, most of us who went to work in this business did so, at first, because a paper-pushing life under fluorescent lights didn’t have any appeal – and getting something physically accomplished just felt like a better life and worth getting paid for.

Don’t let the bureaucrats take this life away from you.

” ” Don’t let the bureaucrats take this life away from you.

Steve Payne Editor

spayne@canadiancontractor.ca

www.canadiancontractor.ca

Sept/Oct 2013

9

VOICES

Voices

”

The best drawings and specifications don’t protect you from poor trade practices.

”

David Lupburger

Get away from competitive bidding Competitive bidding is not good for business.

Besides the time spent doing an estimate for a job you may not get, there is an additional element that most homeowners are not aware of. The following quote helps explain this: “Competitive bids are just that! If I shave the labor or materials to get your job, is that the house you really want? There are hundreds of ways to lower the price of a building which often lower the quality and workmanship also. The best drawings and specifications don’t protect you from poor trade practices.”

– The Well Built House by James Locke

Remodelers don’t sell a commodity, they sell service.

Remodeling can never be priced on a per-squarefoot basis. There are too many variables. It is up to us to educate the homeowner about the “process of remodeling.” We are not just managing a project;

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we are managing a process.

Some time ago, I interviewed several homeowners who were very happy with the results of recently completed remodeling projects. These were “battle tested” veterans, and they wanted to tell me about their projects. They wanted to talk about the good remodelers who had worked on their homes. I asked them to describe some personal characteristics of these remodelers, and they gave me the following: 1. Honesty, integrity 2. Good communication skills 3. The ability to empathize 4. Long-term relationship oriented In the same survey of satisfied homeowners, here are the attributes present in good construction companies in order of importance: 1. Quality construction 2. Clear builder specifications 3. Good company organization 4. Ability to provide price checks 5. Ability to provide value 6. Company responsiveness 7. On time performance 8. Fair price

At the completion of these successful projects, price was only one of eight important considerations these homeowners identified.

Having the benefit of hindsight, these remodeling veterans understood the value of the service they received. To get away from doing competitive bids, we need to show our potential customers the value they will receive from working with us.

What do you do that makes you unique? Do you do weekly progress meetings? Do you assign a lead carpenter to the project until it is complete? Do you

VOICES

David Lupberger is a former renovator who now works with renovators to increase their business acumen in the area of client management. He is author of Managing the Emotional Homeowner and The Home Asset Management Plan. Go to www.davidlupberger.com

Enforcing licenses In a story we posted describing a New Jersey crackdown of illegal reno contractors in the aftermath of Hurricane Sandy, we noted that it is not yet necessary for renovators to register for the newly-minted Ontario College of Trades. We were reminded by reader Richard Thomasa that in Canada, there is still registering for renovators to do and that it doesn’t do much good. He wrote: It is in fact illegal in most municipalities throughout Ontario to operate without a valid annual building renovator operating license.

Threats of fines abound but, unfortunately, these laws are never enforced. In fact, in Oakville, a municipality that not only requires building contractors to be licensed but which also publishes the current list of licensed contractors, nevertheless has hired a non-licensed general contractor to undertake the town’s current multi-million dollar renovation at its city hall! So, not only, does this municipality not enforce the licensing laws it has enacted, the city itself breaks its own licensing laws!

If municipalities do not enforce this important requirement, it should not be surprising that the vast majority of general contractors operating out there today are unqualified, uninsured and likely operating without WSIB or an HST number. No wonder this industry has such a poor reputation among consumers!

Richard Thomasa Posted at canadiancontractor.ca

Voices

provide a written schedule that you review with the homeowner on a regular basis? These are the things that create value in the homeowner’s mind.

In the informal survey above, price was not the primary consideration. Good service was.

Remodeling is a relationship business, not a numbers game. If you communicate the value you provide, homeowners will pay for this value. Think about it. Why do people buy BMWs?

Regulating home inspectors In a post on our website entitled “Ontario government to regulate home inspectors” we stated that the Ontario Association of Home Inspectors (OAHI) was the only association organizing inspectors in the province. We were wrong, being put straight in the following post

by Len Inkster, a home inspector from Niagara Falls, ON, who lists no fewer than eight other organizations for home inspectors.

Here is his full response: This report is highly misleading. OAHI is not the only association that organizes home inspectors home inspectors in Ontario. There is the Ontario Association of Certified Home Inspectors, Professional Home and Property Inspectors of Canada, The Canadian National Association of Certified Home Inspectors, not to mention international associations that have multiple Ontario home inspectors, including the International Association of Certified Home Inspectors (InterNACHI) and the American Society of Home Inspectors.

What is important is that members of the public who want to use a home inspector realize that it is the level of education (of the inspector) and the fact that a home inspector actually belongs to an association that has a recognized standard of practice. www.canadiancontractor.ca

Sept/Oct 2013

11

VOICES

Voices

Mike Holmes, who is seen to frequently complain about home inspectors, may be a popular figure on TV, but one should be mindful of the fact that he is a builder, and if builders did their jobs right in the first place, there would be less of a need for home inspectors. Maybe Mike Holmes would be better placed fighting for more stringent and better policed building codes?

OAHI has less than 40 per cent of all the Ontario home inspectors (who are members of associations) as members. The problem for the public is not home inspectors who are members of a recognized association with a disciplinary procedure, but those inspectors who don’t even bother to join an association – and therefore aren’t held accountable to a standard of practice or code of ethics.

Another problem is that the public is largely uneducated in respect to what a home inspection entails – and they are led to a home inspector, usually, through their realtor. If members of the public want to understand what they should expect from a home inspector, they should first go to the websites of the various home inspection associations and select an inspector who is educated, not someone who is a friend or relative of the very person who stands to make 2.5 to 5 per cent of the house price when it sells!

Len Inkster Posted at canadiancontractor.ca

WSIB and Ontario Bill 119 draws a response Back in February, we reported on marches in Ottawa, Toronto and Hamilton protesting Bill 119, which extents WSIB coverage (and payment obligations) to business owners (previously they were exempt). The report continues to draw comments from contractors, 35 and counting.

Here’s a sample: I just paid my WCB in British Columbia for 12

July/August Sept/Oct 2013 2013

www.canadiancontractor.ca www.canadiancontractor.ca

myself and my employee. We do refrigeration service and installation and my rate was $2.13 per $100. It is mandatory for workers and me as employer to pay.

There has been a serious push over the last few years to make sure all residential construction was covered and safe work procedures implemented.

I looked at some of the proposed rates in Ontario and they were substantially higher to the point of being absurd.

Derek Kite Posted at canadiancontractor.ca Editor’s Reply: To boot the WSIB has already increased the rates as of January 1, 2013 and also increased the amount of income cap off. If you compare the rates of janitors compared to that of a siding guy, it is 26.8 per cent higher on the construction side.

‘Disgusted’ at WSIB I just did a calculation for 2011 to see what I would have paid in WSIB had I been required to, and then what I paid in other taxes. WSIB is charged on the amount I invoice, in short what they deem the labour portion, regardless of my expenses (guess they don’t want you buying any other insurances).

1. My WSIB premiums amounted to more than my federal and provincial income taxes combined; 2. My WSIB premiums amounted to 60 per cent of my net pay.

Seems to me that everyone I talk to at WSIB doesn’t understand that I am an incorporated business. Somehow they feel that the can flout the laws of this country and charge me an almost 10 per cent tax on money that is not even by Revenue Canada standards taxable.

I’m thoroughly disgusted with this, and it’s sad that I have to consider closing my doors

VOICES

Is rating contractors online fair?

System cter ne on

C

Voices

and going and getting another job.

Roy Posted at canadiancontractor.ca

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An interview with Brian Sharwood of HomeStars brought up the question of whether it is fair for contractors to be reviewed on websites where they have not consented to be listed. Associate publisher Robert Koci suggests it’s unfair. Brian thinks differently. Online, he wrote: Robert, I’m surprised that you think it’s a violation of a company’s privacy to be rated by customers. We should be transparent. It helps everyone make an educated choice as to whom we trust with our most valuable asset, our home. Review sites have created a wealth of information to help others make an educated, researched and safe choice. Are there fictitious reviews? Yes, and we can respond or have them removed. Reviews are written by our customers, our competitors and even those that do so for incentives like free home show tickets.

Homestars reviews have increased awareness, traffic to our sites and most importantly, sales.

I found this and thought of sharing it. It’s from Manta.com. “Combat negative publicity with an honest and professional response.

If (the bad review) is due to a mistake or error, acknowledge it and offer to make amends. Engaging dissatisfied customers can demonstrate your commitment to delivering good service. Go a step further by using the experience to teach others how to avoid their own mistakes.”

Brian Sharwood, Homestars Posted at canadiancontractor.ca

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www.canadiancontractor.ca

Sept/Oct 2013

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SITE NOTES

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Net Zero home build

O

ver $4 million in funding and in-kind contributions from the federal ecoENERGY Innovation Initiative (ecoEII) and the building industry will allow for the construction of at least 25 net-zero energy homes in four provinces: Nova Scotia, Quebec, Ontario and Alberta. ecoEII will be providing $1.96 million in funding for professional services required for the planning, design and construction of the houses. The remaining funds will come from Owens Corning Canada, builders and the building industry in the form of in-kind contributions to fund the construction of the homes.

The idea of a net-zero energy (NZE) home is that it uses enhanced energy efficiency design strategies to cost effectively reduce energy needs while supplementing with renewable energy technologies, with the result that the building consumes equal to or less energy than it produces on an annual basis.

Owens Corning Canada is working with five homebuilders to test the feasibility of developing net-zero homes at the community level. Technical design, planning and training processes are already in progress. Home construction is expected to begin this year.

CRA cracks down on the underground economy After an initial push to catch big-ticket tax cheaters, the Canada Revenue Agency (CRA) is now focusing on middle class tax evaders, says a report on CRA’s recent activities published in the National Post. The agency is now setting its sights on the estimated $38 billion underground economy, according to the report, using highly focused pilot projects targeting geographic areas such as the Peace River in Alberta and industry sectors like 12 14

July/August Sept/Oct 2013 2013

www.canadiancontractor.ca www.canadiancontractor.ca

hospitality and used car sales.

The building industry has not escaped CRA scrutiny in this new initiative. In the Sudbury and Barrie area, the CRA examined building permit records and found more than 2,700 individuals that were filing improper tax returns.

The information on CRA’s recent activity came from a report released as a result of a Freedom of Information filing by the Canadian Press.

According to the report, “much of the work occurs in remote and sparsely populated areas that traditionally have limited visual interactions with CRA.” It went on to say the initiative produced an additional $2.5 million for government coffers.

A bad review and a worse response Canadian Contractor's July issue featured a cover story on dealing with online complaints. An Edmonton contractor featured in a Global News story who allegedly placed the stairs of the deck he was building 2-inches from his client's fireplace vent may be the best example of how not to respond when a review is bad.

When his deck installation lit a stair on fire, his customer asked him to fix it. The customer was not impressed when the contractor told him to simply cut a hole in the stair where the fire occurred so he wrote the contactor a bad review online and contacted Global News.

The contractor’s response was to tell the customer that he would refund $1,500 if the customer would take down the negative online review and keep the news story from running on Global. The result was predictable: the story ran nationally and the builder is now well known for conducting possibly the worst public relations campaign in the history of Canadian renovations.

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Photo: Martin Knowles Photography

VANCOUVER

Vancouver Once looked down upon as ugly 1970s shoeboxes, Vancouver Specials have become renovators’ dream houses.

Now, there are annual ‘heritage’ tours of the hippest rebuilt Specials. It turns out that all these lowly McHouses ever needed was you, contractors and architects, to bring out their inner beauty.

By David Godkin

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specials From Plain Jane to Belle of the Ball

B

right orange shag carpets, popcorn ceilings, wrought iron railings and balconies running the entire length at the exterior. Brick below and stucco above. Ugly? You bet. The “Vancouver Special” has become an icon of dubious home design ever since these split-level boxes began popping up on Vancouver’s city landscape in the 1970s. What, modern renovators ask, were those homebuilders thinking?

VANCOUVER

In fact, Vancouver Specials were just the thing to house the blue collar immigrant families that began populating the Lower Mainland in the early 70s. Simple to design, cheap and easy to build, thousands of these monstrosities sprang up block after block with nary a peep from onlookers. But as ugly as they were, these houses are now giving innovative renovators ample latitude to renovate or rebuild. They have generous square footages, excellent lot coverage and they also feature basements that open out to ground level.

“I really (see) them as an opportunity to get in and change the appearance and feel,” says Brent Coleman of Brent Coleman Design and Contracting. “The style is very adaptable.”

Ditto, says Patrick Sproule of Riley Park Projects: “There are some in this city you wouldn’t even recognize as a Vancouver Special. When people are seeing what can be done, that stigma is definitely eroding.” Adds Lido Properties renovator Jonathan Kerridge: “We open up living room and kitchen areas and then a separate side for bedrooms. So it works really, really well for that more modern approach.”

Colebrook Court, Burnaby That open, more modern approach sits at the heart of a Vancouver Special at Colebrook Court in Burnaby. Because the lower floor was intended as a rental suite, Mila Djuras of Intermind Design was asked to focus on major changes to the second floor. Her biggest concern at first? It looked as if the job would require replacing two loadbearing walls, between the living room, kitchen and dining room, with beams. “We didn’t know if we would have to work all the way down to the foundation and build a separate concrete pad,” she said. As it turned out, only one of the two walls was load bearing, and unlike other Specials Djuras has worked on, her crew simply stripped the walls down to the studs, inserted new

beams and triple studded at load bearing points along each beam.

Djuras chuckles when she thinks of the deep pile carpet that first greeted her when she walked into the living room. She and the owner decided very quickly to replace it with heavy duty laminate, important in a home with two energetic teenagers. This was eventually extended into the kitchen where the flooring looked equally bad, a garish, cheap yellow laminate from the 1990s. Relocating the fridge and stove quickly disposed of a breakfast nook; this, together with relocation of the dishwasher and sink, doubled the size of the kitchen and dining area. “It makes it more functional,” Djuras observes. “And as a result people spend more time there.”

Functionality was also the driving force behind the decision to install three IKEA cabinetry units in the kitchen, customized with stainless steel and zebra wood (also built into areas above the stairwell and living room fireplace). Installation of kitchen ceiling pot lights also complement the original skylight, but

Photo: Mila Djuras, Intermind Design

it didn’t end there, says Djuras. “The kitchen ceiling was that terrible popcorn. Really, really shabby looking. So we replaced it completely with new drywall.”

Lighting and window treatments were both

www.canadiancontractor.ca

Sept/Oct 2013

17

VANCOUVER

carefully considered. Track lighting was installed over the stairwell while a more modern looking chandelier was also deployed. Heavy curtains gave way to new window treatments.

Front balconies Most agree there’s a place for nostalgia in home design and renovation, but not when it impedes more practical considerations. Consider the weather.

That subtropical climate in the Mediterranean makes sitting on your balcony, often with family and friends, pretty common for much of the year.

Not surprisingly, Italian homebuilders who moved to Canada in the 1950s onwards continued to build those front balconies that run the entire length of

Photo: Mila Djuras, Intermind Design

the front as they had done in the Old Country. But North American culture, as Djuras points out, is a backyard culture.

“In North American culture you invite your family and friends to a private enclosed place,” Djuras says. “So none of these front balconies serve a purpose. Secondly, with the amount of rain Vancouver gets per year, having something totally exposed is never a good idea.”

Houses in the Mediterranean are also built of brick and typically don't settle; by contrast, Vancouver homes are built of wood in order to

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accommodate structural settlement and seismic activity. With no balcony drainage and the front wall made of brick instead of wood, it and the balcony deck at Colbrook Court settled inward. “So all the water actually went between the deck and the wall,” says Djuras, “and where it didn’t, it created big puddles on the deck and over time all these decks became really rotten and quite unsafe.”

Djuras removed the entire balcony, leaving an overhang rebuilt from the existing beams positioned directly over the front doors. Brent Coleman did the reverse on a Special he renovated, getting rid of the section above the doorway to free up more available square footage and extend the width of the balcony deck. “I also did a re-facing of the exterior,” Coleman said. “I covered all of the brick with tight-grained, horizontal cedar and rebuilt the upper balcony and used cedar as opposed to wrought iron to give it a much more West Coast contemporary feel.”

Special bathrooms Nowhere was that contemporary feel more important than in the bathroom at Colbrook Court. Hence the wall behind the toilet and vanity refinished in 18 x 36 textured tile to reflect daylight and the installation of contemporary Italian Paini faucets and sleek, narrow sinks.

“What I really like about the sinks is there is no need for counter space,” says Djuras. “Counter space is built into the sink. And they’re so easy to clean.”

Vancouver Specials are still being knocked down, no question. But restraint is key now that they are being viewed as heritage structures and have begun to shake off the stigma attached to them, says Jonathon Kerridge. He points out that every generation of classic homes goes through a period of disrespect. It’s inevitable. But he thinks the Special will endure: “There are so many of them and as time goes on, more and more people will take them on as projects.” cc

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It’s the moment someone realizes you’re not just another painter.

When she walks into the room and

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THE CREATIVE EYE

THE VANCOUVER SPECIAL RENO THAT STARTED THE WAVE Today’s wave of exquisite renovations of Vancouver Specials might not have gathered the momentum it has achieved without the publicity surrounding this stunning reno, which was featured almost a decade ago (July 2004) in Canadian Architect magazine (www. canadianarchitect/subscribe).

It was (and is) the home and cherished project of Vancouver architect Stephanie Robb. “It doesn’t always happen, but that project kicked off a trend,” Stephanie told us. “These were working class houses that had received no respect.”

Turn the page to see another Vancouver Special redo

by Stephanie Robb.

Photo: Nic Lehoux Photography

www.canadiancontractor.ca

Sept/Oct 2013

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THE CREATIVE EYE

EAST 3RD AVENUE RESIDENCE Vancouver Special Renovation This superb interior refit, completed in 2008, was opened to the public during the Vancouver Heritage Foundation’s 2011 Vancouver Special Homes tour. It’s an extensive renovation to an existing circa 1973 ‘Special.’

As project architect Stephanie Robb writes, “The renovation primarily made changes to the interior, including a new kitchen and bathroom, a new one-bedroom basement suite, and new doors and windows.

Part of the floor-plate was removed to create a soaring double height space with access to the garden.”

The builder was Quinton Construction Ltd., Vancouver. To see this and other projects, please visit www.stephanierobb.ca.

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www.canadiancontractor.ca

Martin Knowles Photo/Media

THE CREATIVE EYE

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Sept/Oct 2013

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THE CREATIVE EYE

WEST 22ND STREET, NORTH VANCOUVER Vancouver Special Renovation This exquisite renovation was completed by TQ Construction, Burnaby, B.C., in June of this year.

Through the glass doors at the front of this living room, you can see the typical front balcony which is a hallmark of this housing type.

TQ Construction (www. tqconstruction.ca) is owned and operated by husband and wife team Ralph and Hélène Belisle. It’s a complete design/build firm, with the ‘TQ’ standing for ‘Top Quality.’

Looking at the work they did on this ‘Special,’ there’s no doubt about the veracity of their company name.

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www.canadiancontractor.ca

Martin Knowles Photo/Media

THE CREATIVE EYE

www.canadiancontractor.ca

Sept/Oct 2013

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COVER STORY

COVER STORY

W

e’ve all met him. The municipal inspector no-one likes to deal with. Bad tempered and meticulous to a fault. Someone who never met a project he didn’t hate and who displayed almost complete ignorance of what it is you actually do.

Nevertheless,`This is the way you’ve gotta do it,’ he tells you. Or else.

“Some like to power trip,” says Karl Penner, project manager for My House Design Build, an award-winning custom homebuilder in Vancouver. “They let you know right away not to cross them or they’ll getcha.”

Of course, it wouldn’t be so bad if the next inspector you met agreed with the first one on the precise dimensions allowed for that patio you’re building.

Inconsistency is the biggest complaint we hear among

renovation contractors. Sometimes this is the fault of different municipalities applying competing standards; other times it’s the inspectors who can’t agree.

A case in point: rain screening. In many instances a complete rain screen is not needed to protect a building from the weather. “Put in a little different mix with the stucco,” says Bruno Hoglund, also a project manager at My House, “and that patch should be fine.” Well, fine until you’re told something different the next time The Man comes around.

“Other inspectors will say, `No you’ve got to rain screen it.’ And sometimes they’ll make us take off all the siding and rain screen the whole thing even though you’re not touching that part of the house,” Hoglund says. “It’s kinda strange.”

BU

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When the man comes around IN

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The good, the bad and the ugly side of building department sheriffs

By David Godkin

www.canadiancontractor.ca

Sept/Oct 2013

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COVER STORY

Powered By: The other problem is inspection overkill. Hoglund’s plumbing contractor was recently asked to install a small washer and dryer beneath a counter. Instead of installing the drain hose up into a washer box, Hoglund had it connected to a raised pipe under the sink.

“And I had my plumber put a compression nut on it so the hose is not just sitting in there like it usually is into the washer box. But now the inspector wanted a Fernco fitting.”

Does it work? Of course it does, Hoglund laughs. But the regular compression fitting works too. “The pipe goes in, you turn it and it compresses on to the drain pipe and it’s all locked in. The Fernco is definitely overkill.”

Sometimes it’s not the fault of the inspector, but of the municipality. City and town planning departments are notorious for disagreeing with one another over how a provincial building code should be interpreted. That’s no problem if you work close to home, but who can afford to turn down business in the next town over just because the standards are different? Take spray foam used on patios or in walls, for example.

“In Vancouver, we use it in attic spaces on the ceiling, right on the rafters,” says Hoglund. “In Surrey you’re not allowed to do that. But some inspectors will interpret it differently even within the same municipality.

Some follow the law to the letter. Others brush over everything.”

Wasting time on small talk “Looks good, looks great. Hey, lemme tell you about my rec room…”

If you’re a contractor, you know about this type of inspector, too. The guy who is supposed to be inspecting, say, your kitchen ventilation systems. But all he wants to talk about is some project he’s doing on his own property.

“I’ve had inspectors who come in and they seem to have no interest in inspecting at all. Their interest is in discussing their own projects, “says Penner.” And you’re stuck wanting to get back to work but you know if you

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piss them off they’ll get you.”

Hoglund, too, has encountered inspectors whose minds are everywhere except on the task at hand. One Vancouver inspector’s job was to conduct a framing inspection.

“He’s walking around a six thousand square foot home and didn’t look at anything really. He didn’t have any changes for the contractor because instead he was talking about his own project the whole time.”

Hoglund’s pretty confident about his workmanship and so is less worried when an inspector seems unwilling to look at the work he’s done. “I worry about other contractors or jobs, where they may actually be missing something… You want to feel comfortable the inspector is a pro.”

Will Johnston, Director of Licences and Inspections for the City of Vancouver wants that, too. Asked about inspectors who talk about their own projects instead of the job at hand, the city’s chief building official is unequivocal – inspectors in Vancouver understand very clearly what is expected of them.

“I’m not aware of these specific incidents but that’s something we take very seriously,” he says. “If contractors are seeing those things they need to elevate them and bring them to our attention.”

As for inconsistencies in how municipalities interpret the provincial building code, Johnston consults regularly with other municipal licensing and inspection officials “to make sure we’re all interpreting the code in the same manner as much as possible.” Johnston also meets with planning examiners and building inspectors “to ensure they’re not interpreting things differently.”

“We’re also setting a baseline for what it is we’re inspecting and being able to articulate that clearly to contractors so everyone understands these are the things we’re looking at.”

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COVER STORY

says he’s generally been treated well by inspectors. At no time has an inspector forced him “to build in a way that would be substandard,” he says. In fact, Penner believes inspectors have contributed to a much better quality of construction now compared to 50 years ago and that “builders with less experience are more likely to get on the wrong side of an inspection report.”

But Penner questions why some people choose to become municipal building inspectors in the first place.

He believes inspectors often lack hands-on building experience or success in the trades and so failing that “go and become an inspector.” He thinks the criteria for becoming an inspector is not high enough, and that more education and solid experience should be required.

Will Johnston couldn’t disagree more.

“I think that’s unfair…. The majority of our inspectors actually are trade qualified; for example, in plumbing they’re all trade qualified plumbers so they’ve all done that type of work. In building inspection I would say predominantly they’re all trade qualified and they’ve worked as carpenters and that type of thing.”

Johnston adds that some of his department’s inspectors got their training in regulatory courses at the community college level, while some have diplomas in building technology from British Columbia Institute of Technology (BCIT).

One thing that can’t be taught, says Bruno Hoglund, is good manners. “I’ve had inspectors who adopt a hard abrasive tone. I chalk it up to being in a hurry or overworked.” But disrespect or power tripping on a contractor, Johnston says, is not acceptable.

“The customer service that we provide to the public is very important to us because it reflects back on our own credibility as an organization. And so we are very clear with our inspectors about what our expectations are in that regard.”

occurs about who is responsible, the contractor or the building inspector who approved the work.

“The inspectors are there to provide that oversight,” Johnston says. “But an inspector coming out on the site isn’t going to be able to see everything and so we do need to rely on contractor professionals to be doing what they need to do.”

Contractors should also be “working through their industry associations to make sure their concerns are being heard,” he says. Participating in the code development process and providing comments doesn’t hurt either. “All the comments that we receive when we go through public consultation are looked at closely.”

If Johnston, Hoglund and Penner agree on anything it’s that good communication is crucial to the ongoing relationship between an inspector and contractor.

That’s especially important in Vancouver, says Johnston, where basic building standards dovetail with the provincial code, but where “unique” requirements may exist that contractors are not aware of (especially in the areas of green building and energy efficiency standards). “That’s probably the area where (contractors) are more likely to get tripped up on.”

“That said, the relationship that they have with our inspectors is good. And also we’re trying to do a better job as we develop these requirements, that we’re seeking (contractors’) feedback and providing them with updates of the code as things change.”

For their part, Hoglund and Penner, have tremendous respect for the vast majority of municipal inspectors who come knocking. How buildings are inspected changes along with changes both to the code and building methods, adds Penner – and almost always for the better.

“When people state `they don't build them the way they used to’, I say, `Thank goodness!’ Most homes built today are far better built than those that did not receive the benefit of inspections.” cc

Who is ultimately responsible?

Whenever construction errors occur, a debate typically

David Godkin is a Vancouver-based journalist and a frequent contributor to Canadian Contractor.

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www.canadiancontractor.ca

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COVER STORY

Sometimes you can fight City Hall

I

f you’ve ever tried to use nonstandard building materials or techniques on a project, you know the hassles you can be in for from inspectors.

Depending on where you’re working and who the building inspector is, approval for nonstandard details might be a slamdunk or a stonewall. It all depends on one building official and his personal perspective.

The real possibility of a backlash prevents me from using his name, but a friend of mine has manufactured an innovative building material for 33 years. All went well until 2006. That’s when some (though not all) building officials started to prohibit or seriously complicate use of his material, technically proven though it was.

“Yes, Mr. Smith, you may use your material, but only after you’ve received X, Y or Z approval.”

Sounds okay at first, but not when you realize that this “approval” could easily cost thousands of dollars, many months of retesting, and has to happen for each job. One new house project somehow snuck past the radar and received initial permit approval and was built, but then denied an occupancy permit on the orders of building officials, even though it was built with materials that complied with the code. This house has been standing

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completed and occupied for more than five years now, but without an occupancy permit it can’t be sold.

Another friend of mine had a harrowing brush with bureaucracy that just barely turned out okay. A contractor for 30 years, this man set out to build the ultimate energy efficient home in a large Canadian city. After land was purchased and demolition of the existing structure began, code officials set up impractically-expensive requirements for approval to use an innovative wall system that was not only essential to the design, but used successfully by this contractor for other jobs in neighbouring jurisdictions. Who would have thought there could be a problem with building officials?

A hair’s breadth away from giving up and selling the nowdemolished property at a loss, media coverage changed everything and permits were issued promptly. The house is now complete, it costs less than $20 a month to heat in the coldest months of a Canadian winter, and it’s been the subject of international architectural tours. How many great houses like this never happened because of bureaucrats illegitimately flexing their muscles on their own turf?

The good news is that just like the arbitrary rule of Soviet bureaucrats came to an end because of the

By Steve Maxwell

hidden, tireless and costly work of freedom-loving people behind the scenes, a new era of sensible freedom is starting to show up in the world of building innovation, too. It’s not complete yet, but well on its way.

After years of wrestling behind the scenes and thousands of dollars in court costs, my manufacturer friend has developed an approach that gets permits issued for his legitimate and proven materials as covered under the prescriptive provisions of building codes.

Whenever he runs into a building inspector who refuses to provide a permit or a legitimate reason for refusal, he sets a deadline for action in writing. If results don’t show up in time, the chief building official is served with a simple notice that explains he will be held personally responsible to pay a penalty of several hundred thousand dollars covering the costs of delays and damages, as stipulated under contract law. After that little letter, permits appear.

You’d think that building better homes more efficiently would be largely a technical affair.

Smart people discover and refine innovations, they get approval that these innovations are safe and effective, they bring the products to market, then builders everywhere use them in their projects. Sounds like it should be simple, right? Too bad politics so often get in the way. cc

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TH Victoria, BC is one of the oldest cities in the Pacific Northwest. With its rich landscape of heritage houses, it is the perfect market for Brad McDonnell’s painterly craftsmanship.

I live and breathe painting.

I think about it all the time,” says Victoria, BC professional painter Brad McDonnell. “My name is my company, so I take it very, very seriously.”

He didn’t always feel that way. After graduating from high school in the 1980s, he kicked around on a number of jobs, “spinning my wheels,” in his province’s Okanagan region.

Then his dad got him a job with a local commercial painting contractor.

After learning some of the basics and working in the industry for a few years McDonnell began to feel his oats, his confidence sky high. “I figured I knew everything,” he smiles wryly. “Because anyone and everyone can paint. It’s easy, right?”

Just how hard – and rewarding – professional painting can be became clearer when Grant Curl, a longstanding residential painter in Victoria, took the young painter under his wing.

Grant was a fine craftsman, and he taught his young protege the critical importance of labeling paints room by room and how to be professional

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in his dealings with clients, respecting their homes, respecting their property.

“He taught me how to be more personable, too, with clients. Grant was well liked in the community. He was a good tradesman and very hands on.”

Under Curl’s watchful eye McDonnell gradually blossomed as a residential painter. Then, at 23, restlessness and the urge to travel set in. In 1987 he donned a backpack and flew to Australia where, he says, he made “huge dollars” painting – and enjoyed a few close encounters with the tennis elite, as well.

“I met Matts Wilander and John McEnroe. Then one day I was up on a stepladder and was almost knocked off the ladder by Martina Navratilova and her coach. So I had a little giggle with her over that.”

A quarter century later Australia is a distant, if happy, memory. McDonnell is now the proud owner of Brad McDonnell Painting & Decorating, a busy, high-quality painting firm that takes special pride in working on the many heritage homes in the BC capital.

Photos: Diana Nethercott/KLIXPIX

By David Godkin

www.canadiancontractor.ca

Professional Painter • Spring 2013

Professio

THE CITY OF

Restoring “old girls” to beauty True to its name, Victoria’s landscape is punctuated with heritage houses from the 19th Century – and some particularly beautiful Edwardian homes built between 1900 and 1910. These houses are works of architectural art and they require heritage-quality paintwork.

“I have a lot of people work for me because they really enjoy that artistic feel they get from this,” McDonnell muses. “It’s rewarding to see an old girl in such rough shape eventually look so stunning, so beautiful, especially with a good colour selection.”

From the get-go McDonnell understood specializing in heritage homes would mean encounters with houses with a high number of substrates – as many as twenty coats of oil-based paint slapped on, and very detailed finishings. Because of that, “There’s quite a bit more prep in scraping, sanding, filling and caulking, and window glazing. And there’s a lot more colour detail and generally much larger homes.”

“These old houses they split and

www.canadiancontractor.ca

Professional Painter • Spring 2013

Sept/Oct 2013

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they crack and lose all the tannins in their wood. The cells in the wood are just dead, they don’t pull paint very well, they expand and contract at a greater rate and it just pushes the paint off.”

The absence of structural venting and vapor barriers only exacerbates the problem, McDonnell adds. And not every client understands. They want ten plus years out of the paint job on their heritage house, usually because someone has told them to expect that.

“I tell them I’m sorry I won’t lie to you.

Within five years you will see paint failure. I don’t care who paints your house.”

Something clients sometimes fail to

appreciate is that a paint job is only as good as the prep work that goes into it.

Take caulking, for example. Recently McDonnell priced a job involving HardiePlank cementitious-type siding with 1” by 4” corner boards; the client had been told by a previous painter that he intended to caulk in the 3/4”gap where the siding meets the corner. “I said, no, no, you don’t want to caulk all that up. That’s crazy. First of all wood expands and contracts and the caulking will all fall out in a year and you’ll have a mess on your hands.”

In addition to over-caulking, some clients are unaware of the washing and drying requirements for older wooden structures. “You wash the house on

Friday and the client expects you to paint the house on Monday.” McDonnell patiently explains the importance of letting the house dry out, testing it to ensure moisture content is below 14 or 15 per cent. Unfortunately, some painters aren’t nearly as scrupulous, rushing the job by painting over wet or dirty wood or painting when the weather is too cold.

Getting the business end right…

McDonnell doesn’t claim to have the world’s best head for business. What he prides himself on, though, is his common sense. Some of the mistakes he sees others making he’s managed to avoid. Like hiring your girlfriend to manage the books. “If you need to know if something’s is a 100 per cent write off, hire an accountant.” Another is good timekeeping. McDonnell says he can’t understand why some painters seem afraid to call up a prospective client and say they’ll be late for an estimate. “I hear that all the time from clients. A painter who shows up for three days and leaves for four days or has two jobs going and is totally disorganized.”

“It’s rewarding to see an old girl in such rough shape eventually look so stunning, so beautiful, especially with a good colour selection.”

Where some painters get into major trouble is bidding too cheaply. This is particularly the case when they’ve been working for someone else for years making $22 an hour and then go out on their own. So they charge their first client $25 an hour. “You cannot run a business on $25 an hour, you won’t last,” McDonnell says. “But there are hundreds of them out working out of the back of a car trying to

Will Cheetham, a painter with Brad McDonnell Painting, works on the back porch of a Character House in Victoria, BC.

Professional Painter • Summer 2013 36

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do that.” Underpricing yourself on a heritage project is particularly hazardous, says McDonnell, because it’s easy to overdo the prep work.

“If you’re a perfectionist, you better have a client with deep pockets because you can’t possibly strip the houses down without spending tens of thousands of dollars to do so. You can’t go overboard or it’ll turn into a forty, fifty, sixty thousand dollar paint job.”

Many painters also assume that, because they’ve been painting for years, they should be able to look at a house and instantly calculate how much to charge for painting it. “To me, that’s just not accurate enough.”

Instead, McDonnell breaks the house down into segments and then estimates by the minute – 20 minutes for this window, 25 minutes for that door. Once he’s added up all those minutes using a calculator he then simply divides by 60. “Boom!” he says.

“There’s my hours.” It’s proven to be a very accurate system.

The inability to accurately estimate a job and lack of foresight running a business kneecap more than a few contractors; McDonnell says it’s also the principal reason why painters starting out should think twice about working underground. Because it’s 38

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one thing to hire other painters at $25 an hour, quite another to pass up on writing off those wages come tax time. “If you’re going to run a business you’ve got to charge accordingly. You also have to have insurance, workers compensation, and of course proper equipment.”

Like most company heads McDonnell has a website, but he isn’t convinced this is the best way to generate business. First, Victoria is a retirement community where most of his clients are elderly and less prone to Internet browsing. In this particular type of market, McDonnell has discovered that an ad in the Yellow Pages lands him twice the amount of work that other types of marketing do. It’s not cheap – his ad costs him a steep $1,300 per month, which adds up to about 5 per cent of his gross sales. But the alternative, says McDonnell, would be worse. “If I cancelled all my advertising tomorrow and tried to rely on word of mouth, I wouldn’t survive.”

Educating the public What’s a little puzzling about McDonnell’s downplaying of the importance of the Internet is the length to which he goes to communicate using it. Not just as a business tool, mind you, but

www.canadiancontractor.ca

Brad McDonnell, left, owner of Brad McDonnell Painting, and Steve Small, one of his painters, discuss the placement of the address plate on the front of a client’s home in Victoria.

as a way to educate people about residential painting. Take a look at his website and you’ll see helpful information on the relationship between excessive moisture and paint peeling, helpful hints on varnish and mildew, and the 10 questions people should ask when getting a professional quote.

“People aren’t just targets. I want even those who don’t hire me to go onto the website and learn something,” he says.

McDonnell isn’t averse to learning a few things himself. For years he’s relied upon the good advice of Cloverdale paint rep Al Crichton. “He helps me out a lot,” he says. “I phone him quite a bit for advice and product knowledge because there are always new products coming out. I think it’s very important to get to know your sales reps.” For his part, Crichton calls McDonnell’s business sense “terrific.”

“What you find in this industry is that there are good painters out there who are not business people,” Crichton says, “and then there are business people who are not good painters.

Brad is both.”

A better informed client means less time explaining both the basics and finer points of residential painting, McDonnell maintains. He takes the same approach with his employees, guiding them with the same patience and care that his mentor Grant Curl took when McDonnell was a young painter starting out. “Best boss ever,” says Will Cheetham. “Brad’s organized. And he trusts us.” Stephen Small nods in agreement. “There’s no drama. Brad’s very respectful about our abilities and the jobs go well.”

Best of all, he listens, adds Cheetham.

Whether it’s a problem with the way a particular paint lies down or a problem that arises on site, McDonnell “focusses on finding solutions” instead of pointing the finger.

McDonnell says he’s lucky. “I’ve got a really great crew right now who I’m really proud of and happy for.” The best employees, he adds, bring a combination of integrity, hard work and knowledge to the job. He also places a lot of stock on neatness and above all politeness to the client. Judging by the

ally go on their own.” So far, McDonnell seems to be bucking the high turnover rate experienced in the rest of the industry: Steve has been working with McDonnell for four years, Will for five, and both seem happy right where they are.

We all need downtime When he’s not painting McDonnell is travelling to hot, sunny climes in places like Las Vegas and Arizona and golfing. He doesn’t pretend to possess a great handicap and despite once getting a contract to paint the home of someone he met on the links, he insists he goes there to relax, not to drum up business.

McDonnell also likes spending time with his sons Brendan, 18, and Jacob, 14. He’s even shown them a few of the painting basics. Will he pass the painting business on to them?

Actually, McDonnell would rather Brendan and Jacob start up their own businesses. And not necessarily painting, he says. It’s a tough business, mostly seasonal and the wages aren’t high. “But if you’re a businessman, run good crews and run a successful business as I have for a few decades then you can make a good living at it.”

“And I really like the flexibility of being a business owner,” he says. “It’s a really good feeling.” pp

“I’ve got a really great crew right now who I’m really proud of and happy for.” testimonials, that approach seems to be paying off. Say customers Ted and Sue Lejeune, “Not only did they do great work, they also made sure everything was cleaned up and habitable by the end of the day. We would not hesitate to recommend their company…”

Helping young painters understand the importance of running a business in this way is gratifying, McDonnell says, though it comes with a cost, too.

“Guys like these are hard to hold on to because they’re like me. They eventuWill Cheetham, a painter with Brad McDonnell Painting, works near the roof line. “Best boss ever,” he says of McDonnell. www.canadiancontractor.ca

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39

CONTRACTOR U

Financing

GROWTH Part II

In our last issue (July/August) we looked at a powerful, new way to look at your renovation business and why you should think seriously about financing its growth. If you missed that article, you can find it at www.canadiancontractor.ca under Contractor U. This month, let’s get specific about four ways to find the necessary funds to grow your company.

By Mike Draper

F

unding growth is a big challenge in the renovation industry, as most banks are leery of financing smaller residential construction businesses. There has been a long history of shoddy contractors borrowing money from banks and then defaulting on the loans. The owners would just close up shop, open up under a different name and the financial institutions would be hung

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out to dry. This history is unfortunate, as it has made it more difficult for legitimate business owners to secure bank funding for their growth.

The other major financial challenge for renovation contractors is that this is an industry with very large cash flow demands and, typically, thin profit margins.

Most renovation contractors have little or no cash reserves in the business. Just look at your own bank

CONTRACTOR U

account. Is there very much ‘extra’ money in there that you won’t need in the short term?

In Part 1, we talked about how crucial it is to have a vision of what you want your business to look like three years from now. This vision should then form the basis of a business plan. That plan should describe, in detail, what will you need to add to your business – especially in terms of people – to reach the amount of work that you want to be doing. If you haven’t read Part 1 you should do so now. If you don’t have a solid business plan, raising money will be almost impossible. Anyone that is going to lend you money is going to want to know how likely it is that they will receive their monthly payments from you.

Let’s look at what are some of the financing sources available for home renovation firms and the pros and cons associated with each. There are basically four ways to find the money to finance your growth. Let’s start with the people who are closest to you.

Friends and Family

1.

Friends and family are typically the easiest-toaccess sources of financing for most small business owners. They know you and, hopefully in most cases, believe in your capabilities and integrity.

They have generally seen some of the work you have done in the past and they know your strengths and weaknesses. They may feel, because of their personal relationship with you, that there is a relatively low risk of their not getting paid back.

They may not ask you for a written business plan and may make their decision based on your verbal assurances.

This last point is, in fact, the major downside of obtaining financing from family and friends.

Bypassing an objective, third party review of your business plan exposes both parties to considerable risk. We have all heard stories of contractors accepting money from family and friends, only to have their businesses die within a very short period of time. If this happens, the owner is unlikely

to be able to repay the lost money for a long time, if ever. Needless to say, friendships and family relationships can be permanently destroyed by this unfortunate, but sometimes predictable, sequence of events.

Financial Institutions As sticky as they can be about lending money to start-up renovation businesses, banks do offer a wide variety of ways to fund growth. The longer you have been in business and the more stable your revenues and profits are, the more likely you will be to obtain financing from a bank. Here’s a look at how lenders generally structure loans, with common variations.

Line-of-credit loans: The most useful type of loan for the small business is the line-of-credit loan. This is a short-term loan that extends the cash available in your business’s checking account.

You pay interest on the actual amount advanced from the time it is advanced until it is paid back.

Line-of-credit loans are intended for purchases of inventory and payment of operating costs for working capital and business cycle needs. They are not intended for purchases of equipment or real estate.

Installment loans: These loans are paid back with equal monthly payments covering both principal and interest. Installment loans may be written to meet all types of business needs. You receive the full amount when the contract is signed, and interest is calculated from that date to the final day of the loan. If you repay an installment loan before its final date, there will be no penalty and an appropriate adjustment of interest.

Balloon loans: These loans require only the interest to be paid off during the life of the loan, with the final “balloon” payment of the principal due on the last day. Balloon loans are often used in situations when a business has to wait until a specific date before receiving payment from a client for its product or services.

Interim loans: Interim financing is often used

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2.

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CONTRACTOR U

by contractors building new facilities. When the building is finished, a mortgage on the property will be used to pay off the interim loan.

Secured and unsecured loans: Loans can be secured or unsecured. An unsecured loan has no collateral pledged as a secondary payment source should you default on the loan. The lender provides you with an unsecured loan because it considers you a low risk. A secured loan requires some kind of collateral, but generally has a lower interest rate than an unsecured loan. Loans secured with receivables are often used to finance growth, with the banker lending up to 75 percent of the amount due. Inventory used to secure a loan is usually valued at up to 50 percent of its sale price.

Mortgage financing: Mortgaging your house or other personal property is much less expensive than obtaining a business loan. While banks are in the business of loaning money, their top priority is ensuring that they get paid back with interest. Real estate offers secure collateral for a business loan.

Insurance financing: If a contractor currently has a life insurance policy with a cash value built up or an over-funded universal life insurance plan, they are able to borrow against these values in a few different ways to fund future growth of their contracting business. Contractors are able to use the cash value as collateral for a third party loan.

Alternately, you could cancel your insurance policy and take the cash value instead of taking out a loan. This last option would be the worst case scenario as a business owner should have some type of insurance plan in place in the event of premature death or disability.

Most life insurance products in Canada come with premiums and a face amount that is guaranteed for life. Using a permanent insurance plan has many advantages to a contractor, not only from a lending scenario but to protect their insurance needs in the future.

The information in this insurance section was graciously provided by Alana Guthro, Guthro Financial (alana@guthrofinancial.com).

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3.

Business Partners/Investors The majority of renovation companies have sole owners. Only a very small percentage of contractors have business partners. While I can only speculate as to why that is, I suspect that most contractors started off running their own small contracting business after working for another contractor. It’s rare that two or more people get together and say, “Let’s start a renovation company.”

Having a business partner can be very helpful in many ways, not just as an extra source of cash for the business. It also means that you have someone else on the same team as you, giving you another pair of eyes on your business and someone you can bounce ideas off. It also means that you can get to a much higher level before you hit a revenue ceiling, since there is extra help in handling the workload.

If you have someone who is interested in buying into our business but who doesn’t have enough cash or borrowing power, “sweat equity” is a way for them to purchase shares in your business. For example, let’s say you have a project manager who wants to become your partner, and the competitive salary for his job is $70,000 per year. If he agrees to work for $50,000 per year, he would earn $20,000 in sweat equity that could then be used to purchase shares. Now that he owns some shares, next year he is entitled to a proportionate share of the profits.

The obvious downside is that you now have to pay the salaries of two business owners instead of one. Your firm might need to perform up to twice the amount of work you were doing as a sole entrepreneur. You also need to be able to deal with different personalities, potentially different work ethics and different visions on where the company is going.

Financing From Cash Flow

4.

Cash flow is critically important in running your business. Unfortunately, too many contractors struggle to make their day-to-day operations cash flow positive, never mind trying to fund growth from cash flow. However, it’s important to

CONTRACTOR U

remember that it is possible to generate significant, positive cash flow from performing professional renovation services and that funding growth this way is one of the least expensive and safest ways to grow. You could leave the extra money in the bank, but with interest rates so low, it won’t earn much interest anyway. Reinvest that money in your own success!

The keys to positive cash flow are easy to understand. Execution is largely a matter of self-discipline.

1. Build in sufficient profit for all proposals.

If your projects are profitable, you won’t have cash flow problems.

2. Prepare a reasonable and fair contract that outlines when milestone payments are due.

Terms should be due on receipt. You are not in the business of financing your client’s renovation project. You should always get paid before you have to pay your vendors. Clients should give you deposits before you provide them to suppliers.

3. Use trade credit to purchase all supplies.

This will give you 30 days to pay in most cases. As you do more business with a supplier, you build up trust and will have the opportunity to get even better credit terms from them. Using trade credit allows you to slow down the flow of money out of your company so that you can use incoming money to fund legitimate expansion. Trade credit also helps you to reduce the time spent on administration. But there’s a downside to trade credit, too. You can quickly find your business in a cash flow crunch should you abuse this type of credit. Just like in the family and friends section, trade credit will get extended to you based on supplier’s histories with you, not because they have reviewed your business plan or done any other type of due diligence. Use trade credit wisely.

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4. Complete your milestones and projects on time.

Delays in project completion cause payments to be delayed. Delayed payments increase both financing and operational costs.

Financing your business from internal cash flow is the “old school” way of building a firm. Most of us have met or heard about the great entrepreneurs of our grandparents’ or great-grandparents’ generation who would build substantial enterprises without taking bank loans. They expanded when they had the cash to expand, not before. Nevertheless, if you take too much money out of your bottom line and start to invest in expansion too early, you can easily starve your business for cash and create more trouble than if you had prudently financed with a more costly source of money.

Summing up When you look at the various methods of funding discussed here, you need to decide which method of funding best suits your needs, your goals and your tolerance for risk. Loans from financial institutions, from outside investors, or even from family and friends come with the additional responsibility that you will constantly be asked – in one form or another – to account for how your business is progressing.

If you don’t like this idea, or have a very low risk tolerance, financing your growth out of existing cash flow is probably your best bet. You will grow more slowly, but you will sleep at night. Each business is unique, as is the personality of every entrepreneur, as are the business conditions in different areas of the country. Just don’t act impulsively. Take your time, have a vision, write a business plan, and be rigorously honest with yourself at all times. cc Mike Draper is a business coach for Renovantage (www.renovantage.com) and a frequent contributor to Canadian Contractor.

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INSULATION

SPRAY FOAM

Tips

By Steve Maxwell

The building trade isn’t always quick to embrace innovation, but when new ways of doing things finally do catch on, they’re here to stay. That’s the case with spray foam kits, and they’re especially useful in three small, challenging applications

Photos: Steve Maxwell

where nothing else does the job as well.

1. SEALING JOIST HEADERS Most Canadian homes have pieces of batt insulation stuffed between floor joists where they meet outside walls around the basement ceiling, and every home I’ve examined with this setup shows grey or black mold on the outer face of this insulation.

It’s almost universal. This is true whether or not an attempt was 46

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INSULATION

made to install poly vapour barrier over the area.

The reason for the trouble is simple. Fiber insulation has no ability to prevent air infiltration on its own, and that’s why poly plastic is put on the warm side of insulation. The idea is to stop the warm, moist indoor air from making its way through fiber insulation during winter. Whenever this is allowed to happen, indoor air gets progressively colder as it gets closer to the exterior wall. Eventually this air gets cold enough that it loses the ability to hold all the moisture it contained when it was warmer. The result is liquid condensation and frost appearing out of nowhere within the insulation, leading to the mold and mildew growth that’s so common in and around floor joist headers. Condensation potential here is particularly high because the inside face of

the rim joist gets so cold in winter. All that’s there to block cold temperatures is the 1 1/2” thickness of the rim joist and whatever siding is on the outside. Theoretically, indoor air infiltration and condensation could be halted even in such a thermally challenging location by a layer of 6 mil plastic, but installing it in an air-tight way around all those joists is just plain impossible. This is why spray foam is really the only option for properly sealing rim joist areas in a mold-proof way.

The main thing to understand here is that rim joist foam must act as its own air sealant, and for this to happen successfully two things need to be in place. First, the foam needs to be a closed cell formulation to prevent the movement of moistureladen air and condensation through it. Open cell foams more easily allow the infiltration of indoor air and the condensation that this inevitably causes in winter. Polyurethane spray foam has been around the longest, and it’s my favourite closed cell formulation for this job. Second, even with polyurethane foam on your side, it still needs to be applied thick enough to prevent air infiltration. Code requires 3” of thickness to prevent condensation, so you’ll want to apply at least this much.

2. INSULATING EXISTING HOLLOW WALLS There are millions of older houses in Canada with poorly insulated, hollow wood frame and doublebrick walls, and financial need is pushing more and more homeowners to do something about the energy these places waste. I know from first-hand experience on retrofit insulation jobs that slow rise spray foam injection is an excellent option for improving hollow wall energy performance because it has two unique qualities.

Slow-rise foam is similar to conventional, twopart polyurethane spray foam you’d use for most applications, except that it takes a couple of minutes to expand and harden, instead of the 20 or 30 www.canadiancontractor.ca

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INSULATION

seconds for regular spray foam. This slower expansion time allows the foam to fill nooks and crannies over a larger area inside hollow walls, rather than hardening just a few inches away from injection holes. Tiger Foam (www.tigerfoam.ca; 888-844-3736) is the brand I’ve had most experience with, and it has the widest distribution of slow-rise foam kits in Canada, with pickup locations across the country as well as jobsite delivery. Slow-rise formulations

GETTING THE MAX OUT OF EACH TANK

W W D A

Spray foam kits typically come in two sizes: 200 board feet or 600 board feet. Actual yield is always somewhat less and varies with temperature and application skill, so it pays to know the details that produces more foam.

T E

The main thing is that polyurethane spray like this release enough heat as it cures to give you the option to visually verify foam coverage for your clients, even though you can’t see foam inside the walls.

An infrared heat gun makes this possible, and I consider one an essential tool for proper hollow wall foam injection jobs. That’s because realtime view of the screen allows you the X-ray perspective to know where the foam is and where it isn’t. Pipes, wires and narrowed areas of mortar inside wall cavities can halt the spread of foam after injection, so you really shouldn’t work blind. Since the foam gives off heat, the infrared camera shows warm areas of walls in brighter colours, so you know where more injection holes are required for complete coverage.

So how far apart should injection holes be? That depends on the depth of cavity you’re filling. You’ll find 3/4” diameter holes big enough for slow-rise foam injection, spacing the holes 4’ to 5’ apart verti-

foam kits need to be 28ºC to 29ºC for optimal yield, and an infrared thermometer is the

S S

ideal tool for checking tank temperature. Electric heating jackets are a worthwhile investment if you plan to use kits regularly. I’ve used the jackets offered by Tiger Foam and they do a good job without the danger of overheating

B P O

the foam. Immersing spray tanks in a hot tub also works well if there happens to be one handy, too. Whatever you do, don’t spray foam that’s cooler than optimal. You’ll get less foam from each kit.

Foam shrinkage is another issue you need to know about. If you spray it on too thick in one pass, foam may pull away from neighbouring surfaces a week or so after it cures.

Multiple, thin coats work best and produce the smoothest results.

TH

©2

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INSULATION

cally for walls with a 5 1/2” thick cavity; 3’ to 4’ for cavities 3 1/2” thick; 2’ to 3’ for cavities 2 1/2” thick; and 1’ apart for cavities 1” thick. Spray foam for 10 to 30 seconds or so in the first hole, let it harden completely, then probe down from the hole above with a straightened coat hanger to determine the height of hardened foam. Calculate backwards to determine how many seconds of spraying is needed to inject enough foam to fill the entire vertical space between holes, then time future injections to match. Ten or fifteen minutes after injection the foam will have warmed the wall enough to show up on the infrared camera. Drill more holes to fill missed areas, then check again. To see more about hollow wall foam injection and how to use an infrared camera in this application, watch my video on hollow wall insulation at http://goo.gl/r0Cdw

3. WARMING COLD FLOORS It’s not just old Canadian houses that have cold floors, but plenty of new ones, too. The popular suburban floor plan of putting a bedroom, bathroom or den above the garage almost guarantees cold feet in winter and spray foam is one excellent way to solve the problem if you can get to the joists

in the ceiling of the garage.

Rooms built over a crawlspace often have notoriously cold floors too, and solving this problem properly depends on understanding what to do and how to do it. The first thing to realize is that insulating the walls of a crawlspace is useless at best, and downright dangerous if the crawlspace has a dirt floor. Here’s why.

If spray foam on walls is to do anything to warm up floors, it must warm up the entire crawlspace area. And for this to happen in winter, all ventilation of the crawlspace must be sealed. Besides the fact that this approach almost certainly won’t make the crawlspace and floor surface toasty, blocking up vents will also lead to a rise in humidity level that often leads to rotting floor joists, especially if a dirt floor is part of the mix.

You’ll be far better off (and probably use less foam) if you spray the underside of the subfloor, leaving the crawlspace walls bare. This means you can preserve crawlspace ventilation during winter while also keeping the floor surface warm. Since spray foam is such a good air sealant it keeps drafts and insects from sneaking through the floor and into your home, too. cc

SPRAY FOAM APPLICATION BASICS Spray foam kits operate at low pressure, so they don’t pose the same safety hazards as high-pressure, truck-based systems. Put on goggles, a respirator, gloves and coveralls and you’re good to go. As you work, have replacement nozzles handy.

You’ll need a new one every time you stop spraying for more than 30 seconds, and also after enough spraying that the tip gets gunked up. Successful application depends on applying multiple, thin coats. I find it works best when I outline the perimeter of the area I’m spraying, then fill the space within. I’ve also noticed that coats applied after the previous one has hardened for a few minutes also reduces the chance of foam shrinking away from framing lumber

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STUFF WE LIKE

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NEXT GENERATION CONTRACTOR NEXT GENERATION SKILSAW James Haslam, a renovation technology student at George Brown College in Toronto, was featured in our May/June issue (top left) holding a 35-year-old Skilsaw. This venerable tool, which had already been in almost daily action for 11 years when James was born (!) actually belongs to our associate publisher Rob Koci.

“I bought it at Castlefield Tools when I first started framing,” Rob says. “The only thing I ever did to it was change the oil in the gear chamber.”

Thanks to the folks at Robert Bosch for gifting James with this brand new Skilsaw (above), which he is now proudly using as an employee of Summit Kitchens, a.k.a. G&A Construction.

www.canadiancontractor.ca

Sept/Oct 2013

53

MECHANICAL ROOM

Thermostats then

and now

e, but

Today’s technologically sophisticated devices can act like entire home comfort centres. Thermostats

By Shannon Soules have come a long way.

B

ack in the day, most household thermostats were simple affairs: they basically consisted of a box on the wall of a home containing a bimetallic strip that sensed temperature changes.

And even as programmable thermostats began to replace those earlier, primitive units in the 1980s, their features were still limited and their system inefficiencies often left homeowners with too-high energy costs.

Thankfully, in 2013 thermostats have really 54

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come of age: the more sophisticated units on the market today can offer homeowners an entirely new experience. New features can be customized in a number of creative ways for comfort, convenience, cost and energy savings. At WhiteRodgers Canada, where we are proud to be an industry leader in innovative thermostat function and design, we look at thermostats as entire “home comfort centres,� not just simple temperature control devices.

MECHANICAL ROOM

Comfort

ture is especially useful for houses that have been subdivided into individual rental units, yet where central control of temperature at one single thermostat is desired.

New features and technologies allow advanced technology thermostats to provide optimum comfort levels in a home at all times and in all areas of the house.

One example of this is what White-Rodgers Convenience calls its Energy Management Recovery (EMR) With features such as maintenance alerts, builttechnology. EMR ensures that the air temperain heat recovery ventilator controls (HRV) and ture is always at the right remote Wi-Fi access, level for the homeowner at controlling the environexactly the right time. Once ment at home has never the homeowner has probeen easier. grammed the thermostat, Indicator lights built into EMR will ensure the cora technologically-advanced rect temperature is always thermostat can alert the met at the correct time by homeowner as to when a starting to heat or cool the part of the HVAC system air early. For example, if needs to be serviced. The the temperature is set to thermostat will prompt the 18째 at night and 21C째 at homeowner when it it time 7 am, the thermostat will to change a furnace filter, start heating up the house humidifier pad, or UV lamp, at 6:45 am. By giving itself where applicable. approximately five minutes Built-in features allow for each degree change, homeowners to control mulEMR ensures that the house tiple applications from one will always be at the right control. Most newer-built temperature precisely homes today are already when that temperature equipped with humidifiers, is required, leaving the quality filtration systems homeowner comfortable at and HRVs; however they all times. come with their own sepaRemote sensors are rate controls. The same White-Rogers Canada is about to launch a another big leap forward Wi-Fi system that will allow homeowners to thing goes for humidificain thermostat technology. control their home environment from their tion and dehumidification smartphone, anywhere in the world.

Remote sensors allow the systems. Now, HRV controls thermostat to maintain a uniand humidification/dehuform temperature around the home at all times midification controls are built right into the ther(provided, of course, that the heating delivery sysmostat which allows homeowners to enjoy the tem can also vary the volume of heated air being convenience of having one integrated control to delivered to different areas of the home). This feamanage the household. www.canadiancontractor.ca

Sept/Oct 2013

55

MECHANICAL ROOM

The inclusion of Wi-Fi allows homeowners to conveniently manage their thermostat from anywhere in the world. By connecting via a cell phone or computer, homeowners can monitor and adjust the temperature in their home without even being there. This feature is especially nice for cottage owners. Now, instead of arriving to a cold cottage and waiting for hours until it is heated, owners can access the thermostat hours before they arrive to ensure a warm welcome for family and guests.

Wi-Fi also has the capability to send out alerts in the case of a service emergency. For example, a family goes on vacation and leaves their home at 18°C. Two days later the temperature starts dropping dramatically. Although the family is away, the system can detect the change, and with Wi-Fi, the thermostat is able to call or email the homeowner or the local service contractor and alert them that there is a problem that needs to be fixed right away.

These convenient features give busy homeowners peace of mind and one less thing to worry about, and ultimately leave them feeling satisfied with their system.

Customization The ability to adjust humidity levels, set temperature limits, and the level of security required to access the keypad are just some of the many features that can be customized on modern thermostats.

Programmable thermostats allow users to set up a customized schedule of temperature settings that happen at different times of the day. For example, the user can program the thermostat to decrease the air temperature by 4° every day from 11 pm to 6 pm while everyone in the house is asleep. A weekly schedule can also be set, whereby the user can set the temperature higher on the weekend, and lower during weekdays, for example.

The ability to program a thermostat allows the homeowner to see significant cost savings. A study conducted by the Canada Mortgage and Housing Corporation (CMHC) in 2005 showed that setting a

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E daytime indoor winter temperature of 22°C and then reducing this at night to 18°C yielded a 6.5 per cent savings in natural gas and 0.8 per cent savings in electricity. Furthermore, reducing the temperature to 16°C at night resulted in a 13.0 per cent reduction in the amount of gas used and a 2.3 per cent reduction in the amount of electricity used.

Cost savings Energy saving technologies such as dual fuel heat pumps, and the White-Rodgers Cool Savings™ feature also allow homeowners to lower their costs as well as their impact on the environment.

Dual fuel heat pumps save energy by shutting down when the outdoor temperature drops below a certain level, allowing fossil fuels to take over. Since fossil fuels are a more energy efficient source of heat (in most provinces), energy consumption is reduced as well as your energy bill.

Air conditioners are one of the most costly appliances to run during those hot summer months. Cool Savings™ is a feature by White-Rodgers that creates energy savings by lowering indoor humidity so that the home feels comfortable at a slightly higher temperature. By lowering the humidity, the homeowner does not feel the need to keep the air-conditioner running for as long, which results in more cost savings.

The modern thermostat offers those conscientious customers a way to lower their impact on the environment, and save a little money at the same time.

As you can see, when it comes to comfort, convenience, customization and cost savings, today's thermostats have a lot to offer. cc Shannon Soules is a business and marketing coordinator at White-Rodgers Canada Emerson Climate Technology and may be reached at shannon.soules@emerson.com.

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Tankless Water Heater

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WHAT DID THEY PAY? WHAT DID THEY PAY?

Win me! me!

Win

Email Emailus uswith withthe thecost costofof the thejob jobbelow below&&win winaalevel level email emailspayne@canadiancontractor.ca spayne@canadiancontractor.ca

The TheIRWIN IRWIN2550 2550box boxbeam beamlevel. level.It’s It’s accurate, accurate,rugged ruggedframed, framed,and andhas hasaa continuous continuousedge edgefor forscribing scribingcomplete completeand and accurate accuratelines linesanywhere. anywhere.ItItincludes includesIrwin’s Irwin’s Plumb PlumbSite Sitefeature, feature,which whichprovides providesdual dual viewing viewingfrom fromawkward awkwardangles. angles.Embedded Embedded earth earthmagnets magnetsallow allowfor forhands-free hands-freeuse. use.

What did they pay?

What did they pay?

BASEMENT BATHROOM What did this three piece bathroom cost?

This basement bathroom was a relatively quick reno done in a very high-end Emerald Custom Kitchens neighbourhood of Toronto.

The area of the owner Paul Jackson renovation is roughly 8 ft. xsent 5 ft.

PANTRY

us these pics of a very nice

There was a rough-in already for the sink set of solid Birch pull-outs. and the shower but the toilet rough-in is The sixindovetailed drawers new. The drop the ceiling hides the steel beam the centre ridethat onruns full down extension, soft, of the house. The contractor made self-closing slides. Custom sure it was properly insulated to avoid shimsoccurring were needed condensation behind to thekeep tile.

the drawers from interfering

The mirror andcabinet all the lighting is new. with the door hinges.

Everything behind the tile is old The bottom four drawersstyle, are including the concrete pan. No fancy new approximately 32 inches by tile-backing system. All the walls you see 24interior inchessoand the pricewas we here are no insulation necessary (except around thenot steelinclude beam) are looking for does and the floor is a very straightforward the carcass. What would you vinyl finish on concrete.

have to charge for these pull-outs? What do you think What do youhis think this basement customer paid? bathroom installation cost the best homeowner?

Email us your estimate.

The three estimates closest to Email your best estimate, theus real price will win the and if you are one of the Irwin level pictured above. three closest to the cost, you will win the Irwin level shown above.

Check our website for Last month’s winnersfor Check our website www.canadiancontractor.ca

Last month’s winners www.canadiancontractor.ca

May/June 2013 5858 Sept/Oct 2013

COST? june.indd 58

Email your estimate to: spayne@canadiancontractor.ca

Email your estimate to: Everyone that responds will get a subscription spayne@canadiancontractor.ca to our weekly e-newsletter, even if you don’t winresponds the very cool Irwin level.

Everyone that will get a subscription to our weekly e-newsletter, even if you don’t win the very cool Irwin level.

www.canadiancontractor.ca www.canadiancontractor.ca

13-04-26 8:08 AM

No one thinks about attic insulation, until you’re reminded why you should.

NEW!

In winter, you can easily spot a poorly insulated attic by a snowless roof. It usually means escaping heat and expensive utility bills.

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