Table of Contents - Alpacas Legal Suite Conversions with Ken Bekendam
George El-Masri [00:00:00] Happy to have you join us today on the episode of the Well Off podcast, the guest today is can be condemned and Ken is an interesting person. He is very well known for his legal second sweet conversions. They specialize in buying these bungalows that have pretty large basements and legally transforming them into rental units. A lot of people don't know that you have to go through a pretty tedious process in order to legally be allowed to rent out your basement. Some people think that if you just have like a separate entrance and you meet some of the criteria, then it works, but it's truly not the case. So a lot of good stuff in here for you. If you are ever thinking about potentially putting a legal suite in your own home or in an investment property, check it out. Always appreciate your feedback so you can leave a review. Let me know what you think. And also, if you happen to know someone who's looking to invest, reach out to me. Let me know. I would love to help your friends, family, coworkers, anyone who's been in the market right now to buy an investment property. Look for me on well off or you can send me an email. George Attwell off. That's the feel free to also send me a text. All my information's on the website. Thank you. Enjoy the episode. Welcome to the Wealth podcast, where the goal is to motivate, inspire and share success principles. I'm here with can be condemned and for the first time, I actually asked how to pronounce the last name before we got started. So welcome to the show, Ken.
Ken Bekendam [00:01:26] Yeah, thanks for having me. It's awesome to be here.
George El-Masri [00:01:28] Yeah. So for those that don't know, Ken is an active real estate investor. He is the owner and founder of King Homes. And from my understanding, you specialize in creating legal second suites. It's also a renovation and construction company. You are also a husband, a father, a contractor and an alpaca farmer. Yeah, yeah. That's really interesting. When I read that you were an alpaca farmer. I thought that that was interesting. I don't even know what they were. So I Googled it. And it turns out that they're kind of from the llama family in certain ways.
Ken Bekendam [00:02:04] Yeah. So basically, they're a smaller version of a llama. They're part of the camel family. So the camels, llamas and alpacas are part of the same type of family of animal. And so, yeah, they're they're they're great farm animals. They're very simple to care for their fluffy and very calm and.
George El-Masri [00:02:27] Yeah. And so you live on a ten acre farm.
Ken Bekendam [00:02:32] Yeah. So back in twenty sixteen, my wife and I bought a quote unquote forever home which is, which was a 10 acre hobby farm. And yeah, ever since we got it we've been slowly getting more and more animals through Facebook.
George El-Masri [00:02:48] Really. Yeah. Like what. Facebook marketplace.
Ken Bekendam [00:02:50] Yeah. Well there's, there's quite a few different Facebook groups for livestock that you can buy and trade and sell livestock. So, you know, when I'm not browsing my news feed, I'm looking at the livestock group, seeing what's available out there and some stuff's free. Some people are just looking at home their animals. So we've gotten quite a few from there. So we we've paid for, but it's not really that expensive to get.
George El-Masri [00:03:20] That's cool. So you've got not only do you have the alpaca, you also said you have some horses.
Ken Bekendam [00:03:25] Yeah. So we have a one horse and we have two miniature ponies and we have what else we got, I think seven goats. Sorry, nine goats, seven pigs, a sheep, a rooster, two peacocks. Cool. Yeah, we have 11 alpacas.
George El-Masri [00:03:44] Where did the alpacas come from. Where they originally from.
Ken Bekendam [00:03:49] Good question. I think they're from South America.
George El-Masri [00:03:53] Yeah. Yeah, you're probably right. I did see that today in my research. Yeah.
Ken Bekendam [00:03:57] Yeah. That's where they originate from. And then obviously they were brought up here at some point. Yeah.
George El-Masri [00:04:04] Cool. So that's pretty awesome. I've always thought not always, but as of late I've thought about how cool it would be to have a farm and to have all sorts of animals. And I'm thinking that for you it's just something you just take care of these animals and they kind of become your friends in some ways. Is that accurate or do you have them for a purpose?
Ken Bekendam [00:04:25] No, like it was it's it's always been our dream to live out in the country on a hobby farm, have some animals just to have on the property to care for. I find it very relaxing. You know, it is a lot of work. There's morning and evening chores to, you know, to like in the morning. I wake up, I go out there, I let them out. I put put hay in the the feeders. I spread some grain. I let them out in the evening, you know, I take them in, I shovel poop, I feed them more hay, more grain, more water. I find it, you know, it's my ten, fifteen minutes, sometimes half an hour up kind of peace and relaxation after a long busy day. And yeah, it's not easy. It's not it is work, you know, shoveling a lot of manure. But no, I can be out there kind of by myself with my own thoughts in my own head and kind of just be able to kind of relax a little bit.
George El-Masri [00:05:26] Yeah. And do you think that you've developed some sort of relationship with these animals? Do you think that they kind of recognize you as someone who cares for them?
Ken Bekendam [00:05:35] Oh, for sure. Like when? When as soon as I start walking towards the barn, you know, they all get excited. And because they know it's feeding time, you know, whenever we're even outside the horses and the ponies and the goats will all come up to the fence wanting to be petted. And, you know, at first, like when we first get the animals, you know, sometimes they're very skittish and standoffish. But when you see you come in and every day, twice a day, you know, they get used to you. And I know one of the the baby alpacas, actually, every morning when we when I go in there to spread, the grain will come up to me and basically rub noses with. And alpacas are very like standoffish animals like no in in the wild, not that they're in the wild much anymore, but like they're they kind of they do live in a herd, but they don't they're not very affectionate with one another, like they like their own little space. So it's actually amazing that this alpaca actually will come up to us and we can actually pet it and and stuff like that. So awesome.
George El-Masri [00:06:36] How are they with strangers? Like if you have a friend over something, will they approach that person or will they stay away?
Ken Bekendam [00:06:42] The baby will. Yeah, the baby alpaca will the others just have to go slow. But you can't, like, rush them. You can try and get a pet in, you know, be very slow about it because again, they're very you know, their nature is to kind of not to have a lot of affection. So, like, you don't have an old package, like no ride and cuddle and hug. And, you know, it's not like a horse, like a horse. They love affection. They love to be brushed. You can ride them no alpacas. They're just nice, nice farm animals. You know, we do share them every spring and people make stuff out of out of the wool like socks and hats and scarves and insoles and all sorts of stuff.
George El-Masri [00:07:26] Yeah. How do you how do you round out the troops? At the end of the day,
Ken Bekendam [00:07:30] they just come in like soon as you are in the barn spreading feed and hay, they just all rush into the barn
George El-Masri [00:07:37] and they're all living together, mixed in with each
Ken Bekendam [00:07:39] other. Also during the daytime, they're they're out in the paddock all together. We do separate the male and female alpacas because they get into each other. But at nighttime, we do separate them all into their own individual spaces so that because we do feed them separately at night time, different types of grain and making making sure that everybody gets the appropriate amount of food cool so they stay nice and healthy.
George El-Masri [00:08:04] That's awesome. Good for you. Yeah. OK, so let's let's get into some of the other stuff. I love talking about this. I think that's awesome. But I'd like to first start off by asking you about your childhood, what that was like, and just certain memories you have of being younger.
Ken Bekendam [00:08:21] Yeah. So like I grew up in a real estate family. My dad was was buying property since he was in his early twenties. So even before I was born, there's been a rental property in the family. And so I have memories as a kid, you know, going into some of these properties, you know, between tenants or what have you, you know, cleaning carpets, stripping wallpaper. You know, back in the day, there was a lot of carpet around. So we're always lugging the steam cleaner around in between. I remember my grandma stripping wallpaper, but then wallpaper wallpapering the walls because we were still doing that right now. Now we're we're painting a lot. But and just like, you know, knocking on doors, trying to get the the rent and following up with the tenants to try and get paid on time. Yeah. So that's just kind of part of my my my childhood growing up. And so, you know, I realized that, you know, not not everybody grows up in a family that has real estate, you know, especially from a young age. But growing up, you don't really appreciate or realize what your parents are doing when they have property. And so it still didn't become real for me until I started buying my own property in my own name. That cash flow was going into my own pocket and then it became life changing for me.
George El-Masri [00:09:47] Yeah. Where did you grow up, by the way?
Ken Bekendam [00:09:50] So I grew up in Branford, OK? Yeah, born and raised and a lot of my family still there in the area. So all of my siblings that we all lived ten, fifteen minutes apart. Cool. So yeah, that's in itself is kind of a unique situation that having family live close by. I spent four years in the States for school and a lot of my friends down there, like in the States, it's much more common for families to be spread out across like all the states where you have four kids and one of them lives in a different state. And so I realized that that was kind of unique and special in itself, just to have your family still live close by. So so we do have a very kind of tight family.
George El-Masri [00:10:31] Yeah. I mean, just looking at your Facebook profile, it says that you've studied design at Nanc or college business communication at Calvin College. Where is Calvin College?
Ken Bekendam [00:10:41] So Calvin is in Grand Rapids, Michigan.
George El-Masri [00:10:44] OK, so that's where you were saying that you went off to college?
Ken Bekendam [00:10:47] Yeah. So I spent four years down in Grand Rapids. I studied business. I actually went there first to study music. So I now I play guitar and piano and sing and a bunch of stuff. And so I first went down there to actually get a music degree. I quickly realized that there's really no future in having a music degree. And so I started taking business courses as well when I was down there. Mm hmm. Yeah.
George El-Masri [00:11:17] How have the business courses helped you in any way at all?
Ken Bekendam [00:11:21] No, actually, looking back at it, no, I was very helpful having business like, you know, studying business in school, you know, at the time, you know, you just kind of you just going to college for, you know, for fun,
George El-Masri [00:11:38] fun
Ken Bekendam [00:11:39] for quote unquote fun. Right. Yeah. Know, not really being too serious about your studies, but but like, I studied business communications, so was a lot of like marketing, advertising, just general business communication rather than like business admin or accounting finance, stuff like that.
George El-Masri [00:11:56] Yeah, I went to the University of Toronto and I got a I finished with a specialist in international relations, major in economics, minor in French, and I don't think that was of any use at all. For me, the only thing that was useful to me was that university taught me how to think. And prior to university it was I just got by school. It was very easy. But when I was studying, I realized that in order for me to succeed, I had to really think about what I'm studying in a different manner. And that's something that's carried over with me throughout. And just to be a little bit more clear on that, it takes a certain level of focus in order to have clear thoughts. And that that was something that that I really I can say that one of the only things that I really learned from university.
Ken Bekendam [00:12:45] Yeah. Like, I have no regrets about going to school, spending that time, spending that money, because, like, even in the States, like I went to a private liberal college down in the States and, you know, there's a bit of a price tag to do that. Yeah, well, I look up here and some of my peers are complaining about tuition fees to go to university. And yes, it's expensive, but, you know, by by gosh, like look down at the states and what people are paying. Right. But like the the life skills and the life experience that you gain going to school, you can't put a price on that. And even my own kid, like, I would encourage him to go to university and I'd be more than happy to pay for it. Yeah. Regardless of what you learn, it's it's it's the life experience. Right. And I still have some very close friends from college that I'm still close with, you know. And so, you know what, these days, like, there's a lot of talk about, you know, we don't need school and all this kind of stuff. And I would agree with that, you know, being being into real estate in real estate investing. But but the certain things that, you know, you learn when you're leave home, go away from from home, start to live on your own. Yeah. I think it's important for everybody to get to experience that.
George El-Masri [00:13:58] Yeah. I would agree with you at this point. Right now, if we're getting into the present, what is it that you are doing? What are you most focused on right now in your business?
Ken Bekendam [00:14:08] Yeah, so it's my business is is King Homes Inc, which which was basically developed to be the renovation part of our business of real estate investing, you know, is just this past year or two that we started actually doing work for other people, other clients. Up to now, we've just been kind of focusing on our own, our own business, our own real estate properties, renovating them ourselves, doing our own permits. I come from a design background so I can do my own CAD work and and whatnot. But realizing that there's a growing interest in demand and legalizing doing secondary units. And so it just kind of naturally grew into. Yeah, starting to do a lot more work for other people. And again, it's just all kind of word of mouth and referrals right now. Like, I don't do any major advertising or marketing, just just their pure demand for four secondary units. And so that's that's primarily what I'm working on right now. And we're we're renovating some of our own houses right now. Currently, we've got a bunch on the go for some other clients. And yeah, it's been it's been great. And I've learned a ton, too, the last two years, especially about about legalizing and because, you know, since since the province came up with Bill 140 allowing more secondary units, you know, there's there's a lot more interest in and demand for legalizing in the province, in the cities are making it much easier. So like before, like we were getting second units for you know, I remember doing them like ten years ago, but we were never do them legally. Right. Right. Because you couldn't you know, we'd still build to the building code and still do things properly and safe, but we would never actually pull a permit for it. Now we're pulling permits pretty much, you know. Ninety five percent of the time, you know, there's a couple of occasions where we won't for whatever reason, but most things were pulling permits now just because it's easy and. It's not as hard as people think it is to actually pull a permit and to follow the building code when you're renovating, you know, the reason I find that a lot of people don't is lack of knowledge around the building code, lack of knowledge around zoning bylaws. Right. So people just kind of get scared or that whole process and they just avoid the whole permit process and not realizing that they're actually doing themselves a detriment because there's so many benefits now to legalizing versus not legalizing. You know, and still, the number one reason we legalize is because as an investor, you know, we want that rental unit to count as legal income, you know, because if it's not a legally permitted renovation, the appraiser can't take into account that that income from that unit. Right. Right. So it actually hurts you when you go to refinance that property. And a lot of investors miss this. They don't realize why we legalize. They think it's, you know, obviously to make a legal with the city and, you know, to do things properly, which is which is important. But the bigger importance is the legal income factor. Right. And no qualifying for mortgages and stuff is increasingly difficult. Right. So we need as much legal income behind our name in order to continue to grow our portfolios.
George El-Masri [00:17:32] Do you find that today appraisers are starting to understand the added value of a legal unit, whereas perhaps in the past they would compare your legal unit to an illegal secondary suite that was close by in the area on that kind of look the same and what not?
Ken Bekendam [00:17:51] Not really. They're slowly coming around, but it's still based on market market fundamentals, market demand comps. You know what's recently sold, that's fully renovated. You know, again, like tenants don't really care either way if it's actually legal or not. They're looking at the finished product. So the quality of the renovation, we are seeing more more tenants, more discerning tenants who are coming maybe from a poor quality rental unit and now desire something that is legal and done correctly, like I'm slowly seeing. But I wouldn't say it's a big driver. But but appraisers, you know, they're just preying on comps. Right. So, you know, this is another fully renovated house with an in-law suite and it's not legal. And this your place that's actually legalized? They're not really you know, they might put a couple of points on on the valuation, but I wouldn't say it's going to be an extra 20, 30 grand. Right. Bump up on the price. But the biggest thing is that they can account for that full rental income as a legal income. Right. So legal income for a duplex versus legal income for a single family home.
George El-Masri [00:19:03] Are you talking about one hundred percent of the income? Because I know certain banks, for example, and they'll take 50 percent of the rental income or 80 percent or whatever.
Ken Bekendam [00:19:12] Well, it's still it's still based on each individual lender still having their own criteria, whether they accept 50 percent, 80 percent or 100 percent. Right. But but the appraiser is putting on his report is the actual rental income for the property.
George El-Masri [00:19:25] OK, so you're selling the units. You're saying that if it's recognized as a in-law suite, nonlegal, then they will not take into account that income at all? No. You know, so you're earning fifteen hundred a month from the basement, but it's an illegal suite, so the appraiser will just dismiss that completely.
Ken Bekendam [00:19:44] Yeah, because the city could come in and shut down that unit and all of a sudden that income is gone. Right. Right. So like let's say a typical duplex that we're getting thirty two hundred thirty four hundred thirty five hundred gross rent. Right. That's legal income for that property versus that same property as a single family. The appraiser might only put twenty five hundred or something. Yeah. As legal income for a single family home market.
George El-Masri [00:20:10] That's right. That's right. OK. Have you ever had a situation where you had an illegal suite or someone of your clients did and did like did you ever see somebody get shut down for that?
Ken Bekendam [00:20:21] Yes, I've seen it before with one of our properties where it was an illegal unit. And the appraiser based upon his report, you know. Twenty five hundred for the rent. And I'm trying to tell the the banker, I'm like, look, there's like thirty four hundred dollars here a month coming in. Like Why what's going on. And like, well you know, we can only take the legal use of the property and the legal rent. So it did affect my qualifying on that property. You know, since I'm in the conversion, the legal conversion business, like I do help a lot of clients who have gotten letters from the city complaining about illegal duplexes, threatening or threatening to shut them down. So I thought I've had people who had to take, you know, a three unit and bring it back down to a two unit, you know, and so now I think there's ways around it that you can still, you know, rent out. Those three units, but you have to present it to the city as a two unit, right? So the praise will only put two units of rent on the report, not three. So it does hurt you when you don't legalize it on the qualifying side? Mm hmm. You know, and unless you've kind of gone through that process, you don't actually realize how it hurts you until it's too late.
George El-Masri [00:21:31] Right. Well, at that point, then you're looking at big costs to conform it to legal status potentially. Or if you get shut down, like, have you ever heard of anyone that doesn't comply with the city? And then the city sends somebody to basically, like, rip out a kitchen or something like that.
Ken Bekendam [00:21:49] I've never seen it where they've had to rip out an entire kitchen. Like basically I've seen it where people have had to remove the stove because the stove is a secondary cooking facility, which is needed to make to make a dwelling unit complete is you need a place to cook. Right. So so to bring it back into conformity, they had to remove the stove. Oh, OK. So that when the inspector comes in it looks like, OK, well, there's no secondary cooking facility. This is now back to a single family home.
George El-Masri [00:22:21] And if it's rented, how does that play into the factor? You have a family living there, but there's no stove.
Ken Bekendam [00:22:27] Well, so like these are things that you do in order when the inspector comes to inspect, you know, to kind of get around it. People like the inspectors aren't stupid, like they know what's going on. The cities know what's going on. But, you know, they're so process oriented and they follow these checklists, like when they come out at the time of inspection, you know, this unit didn't have a secondary cooking facility. Therefore, you know, it's not it's not a duplex. Right. So there's ways of getting around it. Not that it's all right or legal, but like these are things that people investors that I've heard of doing, you know, to kind of get around an illegal duplex complaint.
George El-Masri [00:23:12] Yeah, OK. You are obviously doing these conversions in Brantford. I've seen some of your projects. You do them in Hamilton. Do you do them anywhere else?
Ken Bekendam [00:23:23] As far as the personal ones that I'm doing now, we're basically just doing them in Bradford and Hamilton. OK, I try and stick fairly close to home for these these projects. I do do permit work elsewhere. Like I was up in Berry not too long ago, doing a permit up there, you know, Tronto Tobaco, Von Brampton, London, you know, so I'll like I'll travel to do some promo work, but I do live out Bramford. And so just for my guys and just for day to day management, I try not go more than, you know. Forty five minutes from my house.
George El-Masri [00:23:58] Yeah. Yeah, fair enough. All right. Can you kind of walk us through some of the essential things that somebody needs to look out for if they're trying to purchase a property and then convert the basement, let's say first and Brentford and then maybe second in Hamilton?
Ken Bekendam [00:24:16] Yeah. So I wouldn't say like there are city specific zoning bylaws that everybody needs to be aware of. But in general, when you're going to go look at a property, you know, first we are checking the zoning, you know, so even before you go to visit the property for a viewing, if you're just looking it up on Realtor Dossie or if somebody sends you the the listing first, you have to determine the zone that it's in and whether or not it will permit a legal duplex or a secondary unit or access for dwelling or converted dwelling or whatever other permitted uses are for that zone. Because if it's not a permitted use, then you have to go for a zoning amendment or, you know, which is which is much more difficult. More time, more cost has to go in front of council and all this kind of stuff. So and for one unit, it doesn't make sense to go for zoning change. Right. Right. If we're going for two, three, four units, then you can make a financial case to to take the time and expense to go through that zoning change. So for now, if we're good with the zoning and it's part of the permitted use, then the next thing I'm looking for is parking, you know, and these are things I'm doing from home, not not at the property. So I can determine parking with pretty close accuracy from the GIS maps, which every city has on their website. So you go to the city zoning page and you can find the GIS maps, you can look up the zoning for the property. But they also have the aerial photography and what they call base maps and then they also have their measuring tool. And so between the base maps and measuring tool, you can kind of measure up the area that you that you need for parking while at the same time looking at the parking bylaw that that the city has. And every city has different requirements for parking. In most cases, it's one parking spot per unit, but each city has their own dimensions for parking. So each parking stall is a different dimension with different dimensions. Maneuvering space weather on or off the property, so so if we're good with zoning and we can fit, you know, parking, legal parking within the legal outlines of the property without a minor variance, then then we'll book of time to go to the property. And then this is where we have to check for basically building code compliance and whether or not we can meet building code with the with the space. Because if we can't meet building code, then we can't get a permit. You can't get a permit, you can't legalize. Right. So once we go to visit the property, the very first thing I do is when I'm outside, I measure up for parking, make sure that what I measured up online, you know, fits with what I'm measuring up on site to make sure we can fit our legal parking. And then the next thing I do is I go down into the basement. Most times we're converting the basement. So I need to go downstairs and determine our what our finished ceiling heights are going to be. So I'm measuring from a so I find a spot in the basement that's hopefully unfinished, you know, whether it's by the furnace or something. I measure from the concrete floor to the underside of the ceiling joist and make sure I'm meeting, meeting our minimum ceiling heights, which are in Ontario. Here is six foot eight inches clear, finished height from your floor, finishing to the underside of your drywall, six foot eight inches, which is eight inches. OK, and then I'm also going to the next thing I check is I measure underneath the beam. So I find the beam in the basement. I measure from concrete floor to the underside of the beam because we need minimum six foot five inches underneath a beam. And these are two things that are very difficult to change the ceiling joist. So your mean height underneath the ceiling joists is very difficult to change without jacking up the house or digging up the concrete and lowering the floor. Right. So these are two things that we must have, right? The beam height, if we're if we're too low on the beam, let's say we're six foot two, six foot three, six foot four. We can't meet our minimum clear height underneath the beam. Then we have to replace that beam. Right now. We don't always have to replace the entire beam. Sometimes we're just replacing sections of the beam or we're walking through paths of grass and passageways. So I would say every other basement that we're doing, we're replacing a section of beam, like we're cutting out the beam and putting in a flesh beam a flush. Elvie Beam, no whether to apply three apply for ply so that we can create clear heights, especially at the bottom of stairs when we're doing open concept living room kitchens. Those beams there oftentimes are being replaced with flush beams. So those are the two things. Everything else is just meeting the building codes. So window sizes for natural light, minimum room sizes. And these are all things that through the floor plans and through renovations we can meet. But if we have four in the right zone, we have the parking, we have our ceiling heights, or we can replace a beam in order to create the ceiling height, then we're pretty good, like we're good on everything else.
George El-Masri [00:29:17] OK, when you talk about replacing a beam, what are you you said a flush beam. Is that still a wooden beam that you're using? And you're just it's maybe not as thick as the previous beam.
Ken Bekendam [00:29:29] Yeah. So, like, I'll just speak to your previous project that we're on right now. So it's an older house and like an older bungalow. Nineteen fifties, nineteen seventies somewhere in that era. So there's big wood beams in the basement there. This one here was a five pli inch and three quarter by nine and a half inch wood being right running down the center of the house, you know, six foot three inches underneath the beam. So it's too low to meet our minimum ceiling height. Right. So I know that that section, that that section has to be replaced. Right. So then, you know, with consulting with an engineer, you know, we determined that, OK, a four ply, you know, one point seven five. So engine three quarter by a seven and a half inch alluvial bolted together will carry the span that load that load. So Hasbi has no you do have to consult with an engineer to make sure that structurally that its its sound and some cases like the existing columns that are supporting that beam, sometimes they're fine to be left where they are sometimes for trying to make it really open concept. Some of these structural columns have to be moved or a new one has to be done. So you create a new point loads in the in the basement. So this is where we have to cut out the concrete, pour new pad footing underneath that that that post that supports that beam. So you're getting into some structural work, but it's not as difficult as people think it is. Like people get really scared about touching structural things, which you should you don't want to mess with the house, but consulting with a designer, an engineer, architect. You can usually figure out what what you need, and this is where some people just will walk away from the house because they think, OK, well, we can't meet our minimum ceiling earning the beam. Right. And my guys look know this is like a two, three thousand dollar job, you know, to replace this beam, you know, it's like shouldn't deter you from buying the house, you know? Yeah, I know. Some of these beams are steel beams, like once again, newer houses like nineteen eighties plus you're going to start seeing more and more steel beams. You know, they're they can still be replaced. They're much more difficult to replace because in order to cut them that all in the world and and they're heavy as all get out. You know, most times when we're seeing in the newer houses, once we get into some steel beams at the clear height, is it there? Yeah. So it's not too I can't recall one recently that we've actually had to replace a steel eyebeam.
George El-Masri [00:32:02] Why wouldn't you replace the wooden beam with a steel one
Ken Bekendam [00:32:08] just due to complexity of installation. Right. It's still Eyebeam is much more heavier to do now. You can span a longer distance, but a good engineer will be able to spec something out of Alvar's, which is still like wooden timbers, and that can be installed ply by PLI. So for your carpenters or for yourself installing, it's much easier to do, you know, killing your back like I've done. And still, I mean, before we've had to have like 12 guys in the basement in order to lift the eyebeam up into place. So it's very labor intensive and you have to pull a whole bunch of people together for that hour or two to lift that eyebeam in place, whereas working with all the hours is much easier and and you can still drill through an elbel for electrical line or a plumbing pipe or something. So like your electricians and plumbers still can work with it and work around it or work through it or still I mean, you can't.
George El-Masri [00:33:01] But if you were to build a home from scratch today, then with the building code requires steel or it's either one.
Ken Bekendam [00:33:08] It's either one. It depends on on the span's and the load that it's carrying. You know, you're seeing a lot of steel beams and new construction for sure, but it's much easier because they can crane the eye being in place. Right. And you can span longer distances. So you don't need as many posts in the basement.
George El-Masri [00:33:25] What kind of cost can you expect if you were to replace some of those posts that you discuss to support the beams?
Ken Bekendam [00:33:32] So like, for instance, I'm going to speak to like a secondary suite in the basement room. So, you know, lots of times we're replacing at least two columns and a beam if we're going to be opening up the space, opening up the span for an open concept kitchen, a living room. Yeah. So like the beam itself, like the material is only like 500 bucks and material for the for the same thing with the post. So like that the pad footings thousand bucks, twelve hundred bucks you can get to four by four new concrete pad footings installed plus the material and the labor like usually you have the jackhammer at the concrete pour concrete. So a bunch of time spent on that reinforcing with rebar. So if we're going to replace a beam and new support columns on new concrete pad footings like maybe three to five grand somewhere in that range, like it's not it's not terrible. Yeah. Yeah, it could
George El-Masri [00:34:34] be a lot worse.
Ken Bekendam [00:34:34] Yeah, it could be a lot worse. Yeah.
George El-Masri [00:34:37] All right. What about jacking up a house or underpinning. Have you ever done stuff like that.
Ken Bekendam [00:34:43] I haven't been involved personally on my own projects jacking up a house. But I do know some other clients that I've worked with that have. Yeah. And you just have to make a financial case for it. Right. So depending on what you buy the house for you, if you get a substantially under market value like it's a wholesale deal or something, you know, you can afford to put an extra 20 grand into jacking up the house, put in a couple more roads, a block or something on the foundation and putting it back down again. But yet you have to be planning a pretty substantial renovation to the house like has all the wiring has to get disconnected from panel reconnected. So you're more than likely rewiring the house anyways. You're more more than likely replumbing the house anyways. And so you just have to make a it's a it's a financial decision. Right. And if it's a good house, but the basement is like five feet and you know, but you got the thing at a steal of a deal and it makes sense to put in 20 grand to jack up the house to get a full legal apartment in there. It's better than buying another house, you know, so it just depends what you buy for.
George El-Masri [00:35:46] Yeah, this is just a random question that I've I've thought about, never really looked into. But how is the foundation connected to the brick? How is it all held together?
Ken Bekendam [00:35:57] While most foundations you have your foundation and then on the top of your foundation before the floor joists go in, they have basically like a steel plate. So could be two by four, two by six. That's laid flat along the top of the funnel. And that gets bolted into the foundation, so it's held firmly in place and then on your floor, Joyce, rest on top of that 16 inch center. Twenty four inch center, and then your plywood subfloor goes down on top of that. So when it's a brick veneer on the house like that foundation is keyed out, you know, four inches.
George El-Masri [00:36:33] Right, right. But what if it's an older home and it's all brick
Ken Bekendam [00:36:36] wall you have to take? So, yeah, this is where a lot of times when we're jacking up a house, like sometimes the brick veneer has to come off like kids because you have to disconnect it. Right. The brick is supported from the bottom up. Right. So you take out you're going to raise up the house two feet. You know, you have to basically disconnect the bottom courses of brick from the foundation. So you compromising all of your entire brick veneer. So oftentimes we're not doing them on brick veneer houses, like unless you're planning on stripping the brick and veneering the house. Right. A lot of the houses that people are jacking up for this type of thing is houses that are sited, right?
George El-Masri [00:37:17] Yeah. Well, when you say brick veneer, doesn't that just mean that there is a wooden frame and then that's the support that gives the home and structural integrity and the brick is just for cosmetic purposes.
Ken Bekendam [00:37:31] Yeah, the brick like you see when you see a brick house, the brick is just a veneer on the outside of the wood frame. OK, like the brick doesn't give any structural integrity in
George El-Masri [00:37:40] the older homes like I have. I own a home that was built in nineteen twelve and it's got double layer brick.
Ken Bekendam [00:37:46] OK, yes. Yes. So the older homes that are old like double brick. Yeah. I've seen them where they're all cinder block. Yeah. Yeah. Those are structural. That's structural to the house. Yeah. Like that's holding up the house.
George El-Masri [00:37:58] Yeah. So how just out of curiosity I know we're kind of off topic but do you know how those homes, how the, the foundation is connected to the brick. Is it kind of the same thing. The two by fours built and then the brick sits on top wall.
Ken Bekendam [00:38:11] So in that case the foundation would be the stone foundations are much thicker and so they're quite out much further. So they can carry double brick on the outside and then usually on the inside with these double brick houses, it's like it's like strapping on the inside. So like a lot of these double brick homes don't have very much insulation in them because it's double brick strapping and then like laugh and plaster. Right. So there's like maybe an inch there for insulation. So these older homes don't have insulation behind those plaster walls. But do they need it
George El-Masri [00:38:41] or is it naturally insulated with the brick in the wall?
Ken Bekendam [00:38:44] The double brick does give more insulation factor doesn't nearly meet the code requirement now for for insulation. But, you know, people there's thousands and thousands, millions of homes out there that are these older double brick houses. Yeah. You know, like I have a couple of houses in my portfolio that have these older double brick homes, you know, but when people are doing is pretty substantial renovations to these older century homes, they are stripping off all the laugh and plaster. They're stripping off the the strapping and the restudying from the inside out like they're restarting those walls, spray foam insulation, the whole bit, you know. But yeah, it's getting into some pretty substantial renovation work. Right. So, again, it goes back to, you know, if you can justify it financially, if you get this house like in a market, the house is maybe worth, you know, five hundred thousand. And you bought the thing for two hundred. You know, you can afford to put. Yeah. Fifty grand into stripping the house and jacking it up and you know, to put a legal Sweden, you know, and it goes back to what the house where reappraise for. Right. The comps that you can get so you don't see it too often. I wouldn't say everybody's out there jacking up houses and stripping them. And but you do see once in a while,
George El-Masri [00:40:04] is there anything that you would look at in a home and say, OK, because of this? I'm not I'm not willing to move forward because the cost will just be ridiculous to repair.
Ken Bekendam [00:40:14] Yeah, all the time. Like, that's how that conversation weekly with investors who bring a property to me and say, hey, can what are your thoughts on this? You know, we want to legalize, we want to put the second Sweden. It's an older dated house, needs a lot of both cosmetic work, but also like pretty major infrastructure work, like electrical and plumbing and h back, you know, tell them like, look, you know, what's another similar house in the area that's fully renovated? Like, what's it selling for you? You have to justify the renovations with what you can get if your plan is to refinance and try and pull out as much money as you can. Right. There's a lot of times when, you know, we have to renovate the house regardless like it needs updating. The electrical has to be redone, you know, and sometimes it costs you more than what the market will justify on on a refinance. So depending on your strategy is long term buy and hold. No, just be prepared to have. More money tied up in the property that you can't pull out, and it will take more time for the market to catch up with what you put into the house. Right now, I'm just helping an investor. Right now, we are working on a duplex to try triplex conversion. So we did the we did two units already. But the cost to do the basement is actually quite substantial because you have to do interior waterproofing. We have to repair the concrete floor like it's an older century home. We have to install a bigger driveway, big concrete walk out for this particular house. So it was like one hundred thirty grand to do this basement conversion or the basement of this triplex. And at the time, you know, he he can't recoup that money out of the property. The money he spends on it would just be stuck in the property. So so we're actually sitting on that for now. We're not going to do the third unit just because of the cost. And he's looking at another another property like another bungalow to convert and put the money into that property instead.
George El-Masri [00:42:09] Yeah, yeah. At some point, it makes more sense for you to take that capital that you were going to invest to create a legal suite and just buy another house with it.
Ken Bekendam [00:42:17] Yeah, yeah, yeah. So it just depends on again, it goes back to comps and revise and what you can pull out and how much you're willing to have in the property, sometimes with better places to put that equity that you can get back in, that will actually produce a better return.
George El-Masri [00:42:33] Why did you have to why did you tell this person that they had to repair the concrete on the floor?
Ken Bekendam [00:42:40] So in this in this house, it was an older century home is like nineteen hundreds. The existing concrete floor was quite weedy and part of the project included interior waterproofing. So we already had to jackhammer up the perimeter of the foundation on the inside to install the the interior waterproofing system. And then because of the basement suite itself, like the new bathrooms and kitchens, we had to jackhammer up another good chunk of the floor just to install the plumbing work and the infrastructure. And then with the new concrete walkout that was being installed as well, the drain for that concrete walk out had to tie back into the sump. Well, so, again, another chunk is being jackhammered out just to tie in to drain for the water. So all things considered, three quarters of the floor is already being jackhammered up in consultation with of concrete guys. We all determined that there's no point. And just pouring on top of the existing floor, one is super wavy. And there's no way that you can guarantee that this floor is not going to continue to to move or to fracture and stuff like that. So, no, for an extra day of labor, basically to jack out the entire floor and get rid of it is really only like a fifteen hundred dollar difference. Right. Because if you have to report anyways another three or four inch slab across the entire basement, you know, what's an extra fifteen hundred bucks to just remove all the old concrete and start fresh?
George El-Masri [00:44:07] Well, that would be an interesting thing to see. It would probably have to go through a window, I guess, and just throw down all the concrete and work from.
Ken Bekendam [00:44:15] Yeah. In this particular project, like order of operations, you know, was to first get the concrete walk out, done and poured. So that was become our main access point into the basement for the duration of the renovation. And so yeah, there's a logical process that things have to be done. This particular basement did have an older concrete walkout, but it didn't meet the height requirement. It was in the crawl space and we just couldn't utilize it. So we had to make a new one.
George El-Masri [00:44:45] Yeah, cool. Very quickly, I just wanted to come back to that property that I mentioned to you, the one that I have built in nineteen twelve. It was used as a duplex at one point, except the way that it was set up is as you enter through the main entrance, there were two doors on the inside that take you to the two separate units. It's a two and a half storey home. So the attic is is a finished space and upstairs through door number one, you had a kitchen and a couple of bedrooms, and on the main floor you had another kitchen and then a bedroom and there was a bathroom downstairs. But the ceiling is really low. So I decided to just for the most to to not spend too much just to convert it to a single family. But have you seen projects like that where it is legal to have a duplex, where the entrances are from the inside?
Ken Bekendam [00:45:34] Yeah, like a lot of times we're having a common entrance to the dwelling units. So we're coming in one front door and then we're separating into two separate units. OK, so that common area, the shared exit is what we call it and the building code language, you know, there are certain requirements at that shared exit has to meet, OK, right. There's fire code, basically fire code requirements. Right. Because, you know, in case it's a fire eater dwelling unit, the other occupants have to go through that exit to get out. So that's got to be fire rated properly, you know, like most cases. Forty five minutes.
George El-Masri [00:46:10] So you're talking about drywall and doors and all that.
Ken Bekendam [00:46:13] Yeah, so the doors that lead into that stairwell or that exit and the drywall all has to meet the fire code requirements. So in most cases, it's a 45 minute fire separation, which is, you know, five it's drywall or double five eighths and a 20 minute closure like a fire door that meets the 20 minute fire rating with self-closing devices. So that's no in if we're going into a conversion project with a single family home, we have two dwelling units. They're both coming through a shared entryway. We have to fire, Rick, that
George El-Masri [00:46:49] that space right in each unit has to be a minimum of 700 square feet.
Ken Bekendam [00:46:53] That's city by city in Hamilton. Yeah. So that's like that goes to zoning bylaw. You know, some that can. Hamilton No, it's minimum. Seven hundred in other cities. There's a maximum extent. Catherines St. Katherine's house, like I think it's 640 or something like that is the max. Right. So there's in other cities it's some smaller it's like minimum. Thirty five meters squared. So whatever that is and square feet which is, which is quite small. So yeah. That, that city by city that's no. That's also an important factor when you're looking at the zoning, what's the zoning requirements for a dwelling unit, you know, and you have these minimum and maximum sizes. Right. So like, for instance, I was helping a client here in Hamilton, you know, two storey and an attic. So like three levels. But the actual building itself was only six hundred square feet. So even if we make the whole main floor unit doesn't meet the minimum unit size. So in this case, we're taking the main floor in the basement as one unit.
George El-Masri [00:47:55] But the ceiling heights were good in the basement wall.
Ken Bekendam [00:47:58] This is where there's some challenges around ceiling height down there, which is a building code thing. Right. So ceiling height is a building code. It's not a zoning bylaw thing. OK, so you can't get a minor variance for ceiling height. OK, if you can't again, if you can't meet minimum building code, you can't get a permit. Right now, some cities are starting to follow the national building code in regards to some of these requirements in order to help get more legal, affordable units into the marketplace. So, Hamilton, for instance, I don't want to put any false information out there, but they are starting to accept some lower ceiling heights than minimum building code on a case by case basis based on other factors like fire, separation and interconnected smoke detectors. And but when you're going to the planning department, the still the plan examiners still have to follow the building code. So on a new application, on a new dwelling unit, chances are you you can't get those reductions. That's an existing space that you're trying to legalize. Right. There are a bit more willing to work with you and they'll accept some lower heights because it's an existing space that they're trying to help get legalized and safe in the city. That's Hamilton. OK, other cities don't have those types of no agreements within their building departments that they're going to follow the national building code versus the Interior building code. There is talk, I think Doug Ford was talking about or the government was talking about maybe starting to get away from the Ontario building code and start to follow the national building code in an effort to ease the red tape and bureaucracy around development. Because, you know, as we all know, that's one of the biggest challenges in getting new affordable dwelling units into the marketplace, is did the red tape rate the bureaucracy surrounding development? And I see it on a little part as far as just trying to get some legal second units in in some of the the challenges that we face with that. Right. So I can imagine on a larger scale with some of these larger developers, like, you know, it takes years and years and years to get any sort of development through. Right. And it's all because of just all this, the processes that we have to go through, working with planning departments and building departments and zoning and zoning bylaws and all this kind of stuff. It just takes time. Right.
George El-Masri [00:50:25] Although you did say half an hour ago that it's easy.
Ken Bekendam [00:50:29] Well, if you know if you know the zoning bylaws and the building code like it is easy, OK, does it mean it's not can't be frustrating. It can be very frustrating. I still get frustrated sometimes dealing with the city and but it goes back to lack of knowledge. You know, there's still things that I'm learning about the building code, still things I'm learning about zoning bylaw that still catch me by surprise, you know, and it's still when you're trying to get something through and trying to get a project started and you get these constant delays from the city, it is frustrating. But every project I'm doing, every permit I'm working on, I'm learning and learning. And it is becoming. Easier, right, so for me now, like for the most part, dealing with the second unit conversion, it's relatively straightforward for the first time investor who may be doing it for the first time, maybe doing it on their own. It can be frustrating, but be prepared to be frustrated and angry. And I actually met with them. I was talking with an investor at a recent networking group, first time investor, first time conversion project, doing it on his own as far as the permit process. And he was like almost red in the face with anger, talking to me about about his frustration with the city. And I'm like, I'm like, I've been in your shoes, man. Like, I know exactly what you're feeling and the anger that you feel. And you just have to take it as a learning experience. And you have to learn from this, because if you can be an active investor and doing like a lot of renovations and buying rental properties and doing these types of things, you have to learn the process. You have to be able to learn the language of the building department and of the planning department so that you can keep your life sane, you know, and that just comes with doing more projects right in and just comes with time, you know. But yeah, like this is why these big developers have lawyers, because, you know, it's on a larger scale. Those problems are much greater.
George El-Masri [00:52:30] Right. So cool. You're you're obviously very knowledgeable. I'm sure a lot of people benefit from working with you. You know, jump into the next section here, which is the random five. I'm going to ask you five random questions and you can just tell me what first comes to mind when you hear it. All right. All right. What would you like your children to do for a living?
Ken Bekendam [00:52:51] Um, well, I've always told my wife, like, we're no, we're raising a little property manager. You know, the reality is, is, you know, he may not enjoy what we're doing, you know, and it probably won't become real for him as it did for me until he starts buying his own property, until I encourage him, hopefully, to buy his own investment property, his own bungalow, live on the main floor, rent out the basement, and maybe someday he'll appreciate what it can do. But again, like my wife and I like our son's only three years old, so we're still a long ways off. But I'd still encourage him to go to school, like whatever you want to study, study whether or not it's going to be benefit your life or not, like the life experience is going to be be crucial and just got to find something that you enjoy. It's all about like you're going to work something every single day. You have to be able to enjoy it. You know, like nothing is worse than going to a job. And you just hate it, of course.
George El-Masri [00:53:46] Yeah. Well, that's great advice for your for your son. Would you prefer pancakes or waffles, waffles. Waffles over pancakes. Why do you say that, Noah?
Ken Bekendam [00:53:58] I just find pancakes too mushy like and unless you get them like fresh and hot off the griddle and there are a little bit crunchy, like oftentimes by the time I get them, they sit in for five minutes. Yeah. And they go cold and they're mushy, OK. And they are soaked with Sarah and Lisa. Waffle holds. It's like integrity.
George El-Masri [00:54:16] OK, that's a good point. All right. What's the greatest book you've ever read?
Ken Bekendam [00:54:23] The greatest book I've ever read. Well, I know I would say it's the Bible. I would say the Bible is probably the greatest books I've ever read. Other than that, I don't really read a lot of books. I'm more of a listener.
George El-Masri [00:54:35] Have you read the in the entire Bible?
Ken Bekendam [00:54:37] No, I have not. I should, but I haven't done all right. No, no. I just I've never really been into I've I'm a bit so I can't sit down for a long time and focus and read a book. I'd much rather listen or watch, listen to a podcast, an audio book or watch a video.
George El-Masri [00:54:55] How did you get your college degree then? Did you have to sit down?
Ken Bekendam [00:54:58] No, I have no idea. I did manage to pass actually pass with decent grades. I'm like a B plus student.
George El-Masri [00:55:05] So then you are probably good at sitting down and focusing and reading.
Ken Bekendam [00:55:08] I can, yes. When I have to like I can crunch and I can focus in and read whatever I need to do, retain that knowledge for as long as I need it for.
George El-Masri [00:55:18] And you're working on your second Suy conversions and reading all of these building codes and also for sure you're capable of doing it.
Ken Bekendam [00:55:25] Oh, yeah, you know what? And it's funny. Sometimes I catch myself in the evening reading the building code, you know, and I know some people might watch Netflix. I'm on the couch on my phone, you know, reading through the building code. I have the physical building code binders that I flip through. And I do find it interesting, like if you're into that type of stuff. But I'm having an easier time understanding the building code and the language that it's written in. First, when I read through, I'm like, what the heck does this mean? You know, now now have a better understanding of it. But but yeah. Cool.
George El-Masri [00:56:03] All right. What's your favorite documentary?
Ken Bekendam [00:56:06] My favorite documentary. No, I love Dr.. And just like I watch a ton of documentaries, like if I'm going to watch anything on Netflix, it's the documentary section, you know. And so I don't have a fever. Like I watch them all. Like I love history. I love, like, the planet Earth stuff. Yeah. Animals I love, like, ancient history stuff. I watch like the ancient aliens and and the universe type stuff. I love watching Ted talks and seems
George El-Masri [00:56:34] like you really maximize your days with the farm, the animals, the building code, reading documentaries, all sorts of stuff.
Ken Bekendam [00:56:42] Yeah, I know I have a lot of various interests. I think like, like most people, like, you know, just because, you know, I'm doing second week versions and building code doesn't mean that's the only aspect of my life. Like, you know, you have to keep a balanced life. Right? So, you know, we have the farm. You know, I work in real estate during the day. I know we have a we our family has boats. So we like to spend time boating on the water. We have a boat in Hamilton Harbor, West Marina. So like going down there, you know, our family enjoys camping. So we go camping once in a while. Yes. We go to church and enjoy time with our family and stuff like that. So, you know, just trying to keep a balanced life. Right. No different than everybody else.
George El-Masri [00:57:28] Yeah, of course. Well, that's good. Good for you for for doing all the things that you love to do and living a good life. Would you spend five thousand dollars to spruce up curb appeal or would you spend that money on it on renovating a bathroom?
Ken Bekendam [00:57:42] Um, you know what? So I come from a landscaping background, so I spent a lot of years in the landscape in this industry and I can't have one of my properties that looks crappy from the outside. It just goes against my core, you know, so not that I would spend money on like big fancy gardens that are like a lot of work to maintain order on a rental property. But, um, but I would, you know, spruce up the front porch, you know, maybe, you know, build a new deck or something, resod the lawn, prune all the shrubs and bushes, make sure it's nice and neat looking clean property from the outside, you know, but I always start on the inside and then work my way out.
George El-Masri [00:58:23] OK, so out of the two, you would start with the bathroom?
Ken Bekendam [00:58:26] I would start with the
George El-Masri [00:58:27] bathroom and then focus on. But if you only had to do one, if you only had five thousand dollars and you either spent it on the curb appeal or the bathroom,
Ken Bekendam [00:58:35] I would say the curb appeal. Yeah. That's people's first impression when they walk up to the house. And, you know, if the house looks like crap from the outside, I don't think tenants will naturally want to live there either. I agree. I think they can live with day to day bathroom. But if the house is messy and overgrown and long weeds and the front steps are cracked and you don't work in, you know, you have to fix that.
George El-Masri [00:58:57] That's true. You got to think, what kind of person are you going to attract by having that curb appeal? Like you said, I think if it's clean and it's in decent shape but outdated the bathroom, then they'll probably live with that over a house that just looks terrible from the outside.
Ken Bekendam [00:59:12] Yeah, like if the windows roll, like if the caulking on the windows is all bad and there's vines growing up the house and, you know, the neighbors or your fence is like leaning over two feet, like these are things that you have to fix because you're trying to attract a good tenant. A good ten is not going to want to live in that place. You even if the insides nice. Right. So cool.
George El-Masri [00:59:38] All right. So that's it. Before we finish things off, are you interested in sharing how you can help people, what services you provide and maybe just briefly how people can reach out to you?
Ken Bekendam [00:59:48] Yeah, so basically you can you can connect with me on Facebook, just Google my name or look up on Facebook. Can it be can damn. I'm the only one in existence, so I'm fairly easy to find. I can also go to my website, Legal Second Suites Dotcom. I had put out a check list for those of you who are trying to figure out can we legalize this property or not a lot. I get a lot of questions about can we legalize? So I put together this checklist legal second tweets, dotcom checklist. You can put in your email address and that gets sent to your inbox that you can download. It is just an easy guy to kind of walk through some of these building codes and zoning issues. Yeah, my my company is King Homes Inc and we basically specialize in legal systems. We conversions and I do a lot of perma work as well as part of that, and also do some GVA partnerships too, with people who are looking to just kind of hand off all of the work that we do on to a work partner. So I'm definitely that person that can help out with that as well.
George El-Masri [01:00:51] Awesome. Great. Thank you so much for your time, Ken. Appreciate it. And best of luck to you and looking forward to seeing you at another investment event or wherever else.
Ken Bekendam [01:00:59] Awesome. Thanks for having me. Appreciate it.
George El-Masri [01:01:01] Our thanks for listening to this episode of the Law podcast. If you enjoy the show, then I'd really appreciate if you left us a review on iTunes and let us know your thoughts. In order for us to get a larger audience, it's really important to have reviews, so your support is extremely appreciated. And also don't forget to share the podcast with your friends and family. Until next time. I'm George Elmasry. Have a great day.