Toy Factory Lofts: one of Toronto’s few true loft conversions. The developer took the old Irwin Toy Factory building and converted it into work/live condo units. We bought two pre-construction units, over 3 years ago, but not before we did a ton of research.

We put our limited cash resources into this project because we had the opportunity to buy the units at a slight discount before they went on sale to the public , the builder/developer involved in the project has a very strong reputation, the King West Liberty Village area of Toronto was clearly an up and coming area at the time with a very close proximity to the downtown core (a planned community that has converted a huge industrial plot of land into a massive young professionals haven), and the price gave us the strong, positive numbers we needed for us to take on the risk.

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It should come as no surprise that the housing construction sector is in the tank right now. Yet, another tank, The Online Think Tank, estimates that it will be well into 2010 until things return to normal. Currently, housing construction is at a 14-year low. New Housing starts are about as low as they have ever been seen when you compare the new homes being built against the total number of homes.

Can things get any worse? Well it just so happens that the answer is yes, but do recall that 14-years ago it was 1995, which was a pretty dismal year in the housing sector and interest rates were very high to boot. With more and more foreclosures hitting the already existing unsold housing markets, there is virtually no one in the market for a new home at all.

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Seasons that revolve around the construction industry have been a source of concern for contractors and sub contractors since the beginning of time. Construction factoring offers these companies and individuals a feasible solution to gain working capital immediately. Many companies that specialize in factoring have even gone as far as to completely revamp the system to cater to the construction industry’s specific financial needs. Where banks are skeptical to lend to construction companies, factoring generates more than a billion dollars of business a year by catering to them.

With that said, its easy to see the attractive aspect of offering factoring to these construction contractors and sub contractors. Typically, traditional lending institutions consider construction to be a risky business. This goes against the very nature of these financial institutions because they are taught to only invest in safe business prospects. Construction is a tough business and unless a contractor can present proof over several years of positive cash flow, traditional lending companies will not even look at the prospective client.

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Although having the exact home you want is an outstanding benefit, financing home construction can be a different matter. If you’re working with a custom builder, you will need to assume something known as a “construction loan”. This is the loan that pays off the builder while they build your home. Construction loans are typically short term loans that pack a higher interest rate than your traditional mortgage.

If you’re purchasing a starter home, this might thankfully not apply to you. Builders of “starter homes” understand that a lot of their potential buyers are not able to qualify for a high rate construction loan nor do they understand or care to acquire a short term loan then a long term loan. For this reason, entry-level homes are frequently financed by the builder or else the builder merely builds the homes out of pocket, handling the lot and all of the construction costs of the house. If this is the case with your builder, you will need nothing more than a traditional loan.

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Customers have certain expectations about the finished state of their new homes. They paint pictures in their heads that may or may not accurately reflect the homes you’re building for them. As a result, it’s important that a homebuilder’s representatives, typically a site supervisor and a sales representative, properly manage customer expectations during the construction process.

One of the best ways to manage expectations is through construction meetings, which are held between the builder’s representatives and the customers while the home is being built. Most builders hold three such meetings: one that occurs before construction begins, one that occurs before drywall is installed, and one that occurs right before closing. They take place at key milestones during the home’s construction and give you the time to thoroughly explain the homebuilding process to educate customers and shape their expectations. In addition, if these meetings are successful, they lead to a friendly working relationship and higher customer satisfaction ratings. Infrequent or unclear communication usually leads to unwanted surprises later in the process, such as someone upset over a missing upgrade or a misunderstanding about the floor covering.

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Accounting systems form an integral part of any successful business. Proper accounting not only helps the organization know its monitory worth, but also works as leverage to climb the ladders of growth. A construction company is like any other company and has many responsibilities towards their employees, customers, vendors, investors and government. They are bound to answer questions or queries that are raised time to time. Unless, they maintain a sound accounting procedure and proper reporting systems they can not fulfill these requirements.

The construction industry has some specific accounting requirements. Apart from routine receivable and payable accounts, they need systems for project estimating, job costing, overhead expenses, project schedules and contracts, project billing, vendor tracking and invoicing, customer management, etc. A typical construction accounting system includes accounts payable, job cost management, accounts receivable, payroll, detailed job budgets, time and material billing, general ledger, AIA billing, subcontract status, custom job reports, certified payroll, over and under billings, purchase orders, union reports, inventory, equipment tracking, work in progress, etc.

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When building in clay soil, you have a few things to worry about. Most important, you will need to adjust for the actions of the soil. You don’t want to have your foundation and basement walls cracked during the first year due to moisture changes. As moisture in the soil changes expansive soil will move. During wetter seasons clay grows, during dry seasons clay shrinks. This can be seen in the soil itself if you watch the ground you will notice the cracks and shrunken appearance the ground has, especially in areas that may have had a pond or a creek.

When you build a basement, you want to build on solid ground, or as solid of ground as possible. If you are working in an area that is made up of clay or other expansive soils, you may want to consider stabilizing the ground with lime. Treating the ground with lime gives a much more stable surface to work with.

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Sub-grade:

As with many home improvement construction projects, what you don’t see is more important to the finished project than what you do see. The preparation of the sub-grade when pouring a concrete driveway is critical, without it, the life of the driveway will be decreased dramatically.

The first phase is to clear the area to be concreted of all grass, tree roots, and topsoil. If you are putting a driveway in a new area of your property or if your property has been recently graded the underlying earth must be compacted. Once the earth is compacted, you can add the layer of sub-grade material, crushed rock. A standard sub-grade thickness for a driveway is 4 inches (consult a soil engineer in your area to obtain the optimum thickness) and it is key that the sub-grade maintains an even thickness throughout the width and length. A sub-grade that varies from 3.5 to 4.5 inches will create long-term problems. Do not use the sub-grade material as filler for any low spots.

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