Cell: 604-855-2521 |

My question was this:
After a 3 week search we’ve found the perfect house for a young family. It is close to schools, close to work, has a great yard for the kids – perfect, except that it is outdated and needs some renovations.  They only have the minimum 5% down payment. They want to renovate immediately after they get they keys but have no money for it. Is there some way to do this?

This was a reply from Pat Pelletier, Mortgage Specialist.
Yes. Absolutely. Since you are putting down 5% the mortgage has to be default insured by either CMHC or Genworth. They both have a program called “purchase plus improvements”.  You have to do this with your Broker or your bank, but this will give you a bit of an education on the program.

Here is what happens. Say you buy the home for $300,000 (you have 5% down or $15,000). After you look at the home you estimate that you need a new kitchen, new floors and that this will cost you about $20,000. Note that before final approval, you will have to get formal quotes. Say you go to a large Home Renovation Centre and get a quote for both: total $20,000. $15,000 for kitchen and $5,000 for flooring.

You give these quotes to your Broker. So, now, the total is $300,000 plus the $20,000 or $320,000.00. This is sent to the bank & the insurer. If approved, then they will approve a loan of $304,000. ($320,000 less 5% - 16,000). Note that your down payment is now increased by $1,000.

Then you move in. Do the work and once the work is 100% done, the bank will send an inspector (at your cost) and if 100% done, will release the funds. So, you do the work first, before getting paid for it. You may be able to arrange a line of credit for this, or your contractor will accept getting paid at the end.

Here’s the kicker: the work needs to be done as on the quote, but does not necessarily be done by the person who gave you the quote. Example: say part of your quote was from a painter for $4,000 for paint & painting. Say you go to the Reno Centre and buy a few gallons of paint, and do it yourselves. You will be advanced the full $4,000 if the work is done as on the quote.

You can’t include chattels (fridge, stove, etc.) in these quotes. Those are called chattels and are not considered attached to the home, or structural.

For more information, please call or e-mail me.

Tibor Bogdan or Pat Pelletier

Pat: 604-850-5110
Tibor: 604-855-0800


What is a pre-sale?

Example scenario: When the developer intends to build an apartment building and applies for financing, the bank will grant financing under certain conditions. One of them will likely be a certain percentage of pre-sales the developer will need to secure before receiving the funds.
It is common practice for a developer to approach several real estate investors and offer them an opportunity to purchase units of the non-existent building at a discounted price, and on good terms.

Once the number of pre-sales is accomplished, the developer goes ahead with the construction, which will likely take two years or longer to complete. During construction, their marketing team offers the remainder of the units for sale at market value to the public.

If you are a RE investor, you know that it is preferable to be buying at the pre-sale prices, not market value prices.

The question is, how do you get the invitation to buy a pre-sale?
In the past many years, investors have made substantial income by buying at wholesale prices and selling at retail prices even before they needed to complete their purchase. I saw many of them lining up and sometimes even camping overnight in front of the sales center to get a chance to buy at lower prices, but not everyone was lucky enough. You needed to be well-connected to get an opportunity, and you had to act fast.

Today is a bit of a different story. Several projects in the Lower Mainland and Fraser Valley offer really good prices and incentives to secure a unit now and complete the purchase two or three years later. The list of incentives varies from one project to the next. Besides attractive prices, you can get low deposit amounts (5-15%), low or no assignment fees, free updates, a mortgage rate buy-down program, extra parking and more.

A month ago, I helped a few of my clients purchase a presale in Surrey that sold out in 2 days, and I know of another good developer that will be offering a few units for sale as well.

If you would like to know more about these opportunities, I would encourage you to call or email me, and I’ll be happy to send you details on those projects.
Kind regards,
Tibor Bogdan
Century 21 Creekside Realty Ltd.
45428 Luckakuck Way #190, Chilliwack, BC V2R 3S9
cell: 604-855-2521
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