skip to Main Content

episode # 147

From One Presale Condo to Full Time Real Estate Investing with Cole Skelly and Elizabeth Milder

Have you ever fantasized about quitting your day job to pursue real estate investing full time? So did Cole Skelly and Elizabeth Milder – except they have actually done it! Cole and Elizabeth sit down with Adam and Matt to discuss how they went from a single presale condo to managing an enviable real estate portfolio full time. This episode is chock full of useful information, including how to create cash-flowing properties in a red hot real estate market, how to manage finances, tenants, and the trades, how to choose the right renovations, and how to time the market. You don’t want to miss this one!

Vancouver Real Estate News, Market Updates, Insider Tips, Stats, & Analysis

Sign up for insider real estate news & tips from our podcasting team.

Are you a realtor? Click here
Selling Your Home? Click here

  • Reload
  • Should be Empty:

Episode Summary


About real estate investors, Cole Skelly and Elizabeth Milder

Cole was born and raised on Vancouver Island, in Shawnigan Lake, and moved to Victoria 15 years ago. For 14 years, he worked in the oilfield while doing real estate on the side. He quit the oilfield last January to focus on real estate full-time.

A dual citizen originally from California, Elizabeth moved to Canada in 2003 and went to the University of Victoria. She lived in Scotland and Ireland at different points. She tried living in California again but moved to Victoria in 2011 when it didn’t work out. She met and started dating Cole, and they invested in real estate together—things have taken off over the last five years.

On why they chose to invest in real estate:

You can self-educate. The information is free and easily available, such as with podcasts like this one. A lot of it is a matter of understanding your market. There is so much opportunity and many avenues to explore. Both Elizabeth and Cole like to have different options, which real estate offers. And regular people can do it—you don’t need to have a lot of money to start. Projects just get bigger as you go.

On the first condo purchase they made:

Cole bought his first condo when he was 21. It was a pre-sale condo that he lived in for about six months. He made about $70,000 in appreciation over the year it was built, which he put into a single-family home. He added a suite to the house and lived in it up until he started investing with Elizabeth, five to six years ago. They still own the house today.

Projects kept getting bigger; their current home had foundation issues and they added a full basement suite. Then, they did a flip with friends of theirs in Fairfield (Victoria). This turned into the last couple of character conversions. Cole got things off the ground with the condo purchase by learning the skillset and potential in doing renovations. In the past few years, they’ve learned how to make the renos lucrative and have identified the best way to do this is by adding square footage. Their focus is cash flow—they strongly believe that is the fundamental piece to real estate investing. Appreciation is extra and does not factor into their investment decisions; the properties need to cash flow. If they don’t, it could prevent moving on to the next property.

On how to create cash flow in a market like Victoria, their process, and what they look for:

It’s hard to find a cash-flowing, turnkey property in Victoria. You can create or build your own, however. This is a niche as a lot of people won’t do the renovations Cole and Elizabeth do. Their first was three housekeeping units with an illegal, 5’ high basement suite. They paid $700,000 and gutted the whole thing, dug out the basement, and added about 1,000 square feet. It became a legal triplex which was rented out.

They look for properties with potential to add square footage—it’s an immediate equity gain. For rentals, they have dug out basements. The flip with friends was a similar character conversion but they had to lift the house to add space. They build units in such a way that they’re completely separate, independent suites, which adds value. As well, they added dens to two of the two-bedroom units—these were the first to rent and have not seen any turnover. People love having the flex-space. If you can’t increase square footage but can add a wall to make another room or bathroom, this will still create huge value.

On how they approach the renovation work itself:

They use a general contractor now, but in the beginning did more work themselves. More and more, they are learning the process to remove themselves in order to scale and do more renovations. However, they still project manage and put the pieces together. They also have excavators and still do this work for the basements (local contractors are expensive). In one case, they had already dug out half the basement and the excavator wanted $80,000 to finish it. In the end, they spent about $25,000. Not realizing at first how inflated some contractors’ prices are, their decisions are now informed by this experience.

So far, they have done one project at a time, since both Elizabeth and Cole were working full time and only had so much extra time. However, they would now like to have multiple projects. They’re building two new homes right now, and in an ideal world they’d have a character conversion at the same time. Hopefully another project will get going by the end of the year. Ideally, they would invest in character conversions with the buy and hold strategy, along with new construction at the same time in order to generate more capital. Right now, they have an up-and-down duplex and a triplex, and just finished a fourplex. They renovated and sold a flip, along with another house.

On tips for people with financing challenges:

Have a good handle on what your financial situation is. Many people have no idea what it takes. Another thing that’s helped is financing renovations with construction mortgages. Many people don’t know about these and they can be complicated at first. You need budgets, floorplans, after-repair value, market rents – lots of research goes into this. Find a mortgage broker who has done them—it helps immensely. Find properties to add value and pull your money out at the end of the project.

Badass Women Investors breaks the process down. Justify improvement costs to the bank by submitting a budget. You need some cash up front to start the construction process, and the bank looks at percentage to completion and allows you to draw money out in that proportion. Cole and Elizabeth have been able to pull out most of their cash investment by refinancing. This process demands that you requalify for the refinancing afterwards. It has helped Elizabeth and Cole as they have high-paying jobs—they’ve been lucky. If that’s not you, look at creative financing; find partners if needed.

On some of their mistakes along the way:

A big one is knowing who to trust. Trades can take advantage very easily. They did not have a good contract in place with people they thought were friends, and they lost $10,000-20,000. They now have a great team of trades and build the relationships, using the same people to mitigate risks. To make sure pricing is correct, they compare three or four prices, especially on large projects. Victoria is in a bit of a labour shortage, but it’s still easy to spot an outlier.

Cole and Elizabeth have refined the whole budgeting process. This can be hard, but they’ve found ways to build in contingencies for protection—they’re now getting much closer to the actual cost. You never know what issues you’ll run into; 90% of the time something happens after you start. They add extra cash for this and also an additional 10% buffer. After their first big project they had a baseline, so you could see where quotes should be. Some trades are so busy that they will quote 100% more on a job than a competitor—they don’t really want the work but if you take it at this inflated cost, it’s worth their while to squeeze the job in.

On whether their development due diligence process has changed before removing conditions:

The due diligence model hasn’t changed, but with today’s market you’re often under the gun when putting in an offer. Cole and Elizabeth use their model and what they’re looking for at the outset and have been committed to that. Even when removing conditions is strenuous, they would rather let something go and walk away than make a knee-jerk decision and suffer the consequences. Don’t let emotion get involved. In the beginning, they would be more disappointed and now they just take it in stride—in the past month, they’ve put in six offers which haven’t come through, but it’s no longer discouraging. Real estate investing has a lot to do with numbers and volume of offers before something is viable.

The environment right now is not too landlord-friendly, and landlords will often be lenient on standards or tell tenants things to attract them but, in the end, this only hurts themselves. The same goes for due diligence: you may want to inflate numbers or showcase an investment as great, but it will only cost you.

On property management:

So far, they have looked after the units themselves. They could easily double their tenant profile and still manage the properties. This comes from a solid tenant screening process (called Naborly). It’s a credit and criminal record check, and it includes artificial intelligence. It provides a great risk analysis of prospective tenants, which has been tremendously helpful. Cole and Elizabeth did this on their own before, but it was very time consuming. However, they have held onto their own reference checking and use their own worksheets and questions. They set standards and don’t deviate regardless of circumstances – which they learned the hard way, unfortunately.  They put a lot of value in their units and go above and beyond (even too much, according to some people). This attracts great tenants.

Front-loading on every effort in real estate is great advice.

Yes. You save so much by doing this—they have really happy tenants and almost zero turnover. They don’t get many maintenance calls, and this has allowed them to save costs and time.

During their last project, Cole and Elizabeth went to dig out the basement. Contractors said there might be rock underneath. They dug out test holes and guessed there was about 10% rock. After digging into about 30% of the basement, it turned out to be all bedrock! On this 2,000 square-foot house they wanted to add units to, many people would have thrown the towel in, which they considered. But, they talked to the engineer and blasting company and bought an excavator with a jackhammer. They got around the problem—you can’t give up. Cole is very level-headed, and Elizabeth is more high-strung, so she relies on him for grounding, which is huge. To be successful, you need a sounding board and balanced partnership with different skillsets and strengths.

On their approach to timing markets:

They don’t and think this seems crazy. This is why finding cash flow properties is so important. Timing doesn’t drive your investment decision per se. The two single-family homes currently being built are on spec, and they were worried about the market. There was a side-by-side duplex, so they considered not building the homes out. In the worst-case scenario, they move into one and rent one out. You need backup plans and you will always run into issues.

On favourite resources for prospective investors:

This podcast really is great. Another favourite is the Breakthrough Real Estate Investing Podcast. They both follow many blogs, including Investopedia, which gives a broad understanding of economics and its influence on the real estate market. This has been instrumental for Elizabeth. Cole watches what other people are doing—this is how they got into digging basements and lifting houses. Look what’s happening around your city. Surround yourself with those who know how to construct and change what you need to. Build the right relationships and don’t stand on the sidelines. Get into the trenches and learn—especially when starting out, this is very beneficial and can be brought into your next projects.

On what’s next:

Their goal this year was to build two new single-family homes. The next goal is to build six new homes (not necessarily single-family). Now, they’re looking for land on which to build townhomes. Victoria has a huge opportunity for this—the middle segment is lacking supply.


This Post Has One Comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Back To Top