Tips, tricks, and insider knowledge from a successful Metro Vancouver builder and developer, Raman Hara of Hara Homes.
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Raman was born and raised in Abbotsford and Surrey, and he came to Burnaby later. He started in construction in the mid-90s with his family business. He took a break from it in the early 2000s to try different things, but still did spec homes on his own. Around 2011 he went back full-time, and opened his own construction company for spec homes. Over the last few years, he’s taken on more clients and the business has been growing.
On how to find lots in Metro Vancouver:
Generally, MLS. He researches this a lot. Raman works closely with a couple of realtors who let him know of leads, and when he’s at job sites he finds out just by talking to people in the area. He doesn’t use doorknockers or canvass people as this is hit and miss; you need to be out there a lot. Raman likes to leave it up to the experts (realtors tend to find things out before him).
On what he looks for in a team and a property:
Raman surrounds himself with people who know their field way better than he does. You need to give up control in certain areas and accept that others may know more than you. He always looks for something in a desirable area; the right location and what surrounds it is the starting point. A property in a desirable area will sell faster than something that isn’t. He might acquire properties in busier areas but needs to factor in costs; there needs to be opportunity to negotiate on a lower price. More features can be added to make the home more desirable.
On the expected profit margin:
Raman usually aims for a certain margin but estimates conservatively. What’s happening now is hard to know with the change in government. You must make money on the buying side. For example, he bought a property in North Burnaby in the summer, when properties weren’t moving. He got it for $80,000 less than a comparable property that sold two weeks earlier. Right now, there are opportunities but also risks associated with them. Get in as soon as you can with what you can afford.
On mistakes he’s made over his building career:
- Not calculating soft costs in a real estate transaction (insurance, carrying costs, etc.)
- Neglecting social media—it is so important for real estate to market this way e.g. Instagram is now more important for him than radio ads or signage.
On the most exciting neighborhoods with good buys:
North Burnaby (Capitol Hill, Burnaby Heights); East Burnaby is best for a deal right now. In the past eight months, property values have gone up. In Vancouver, Strathcona seems like the best buy; it’s being gentrified and will drastically change in the next five years.
On how increased building costs over the past decade have affected his business and model:
Nothing has changed too much; it’s all about communicating with people and telling them about increased costs. The highest costs for him have been taxes (GST) because new buyers expect builders to include tax in the price. Costs go up with inflation—the trades ask for more money; bank fees increase. It’s a cycle that can’t be mitigated.
On the expected price per square foot range:
It depends on the jurisdiction, characteristics of the property, and the neighborhood. The short answer is $150 per sq. ft. for bare bones; $200 per sq. ft. on average; and indefinitely more for above average. In White Rock, a 6,000-sq. ft. house cost $150 per sq. ft., while a smaller 3,500- sq. ft. home cost $185 per sq. ft. The bigger a home gets, the less it costs because trades pay a certain amount to get out there and then costs are incremental. The more work you give tradespeople, the lower the cost gets. Raman has worked with some for 20 years and if he calls in a new contractor, they can’t compete. It’s like any supplier: the more work you give them, the better rates you get.
On the quality of builds in Vancouver-proper related to return on investment:
It depends. In East Van, you won’t have the same finishings as in West Van. UBC is different than East Burnaby. It depends on how affluent the area is. Building permit fees for homes in Vancouver are $30,000-35,000 as compared to Burnaby where it’s $8,000-12,000—a drastic difference. You need to build for the area.
On things people absolutely love in Burnaby homes:
Income helpers i.e. the suite downstairs, walkout decks with accordion doors, high-end appliances, radiant floor heating, soaker tubs, and frameless showers.
On how many homes on the go at once:
Raman just sold one and poured a foundation for a new build. He has one under contract and is submitting plans in a week, has another breaking ground in early January, and has two more potential homes in White Rock.
On his role for these jobs:
Raman is general contractor for the jobs and sometimes, if he has time, he’ll help framers and plumbers because he likes to. His days are spent meeting with engineers, city officials, buyers, sellers, agents, and tradespeople. Every day is different.
Best piece of advice for investing in Vancouver real estate:
Get in. Don’t have grandeur thoughts of buying a 3,000-square foot house that will be cheap and make you money. Start somewhere, even if it’s a one-bedroom condo or further out east in Burnaby. It’s a continuous gain that can take 20-30 years, but don’t get discouraged. Keep trying. Make it a rental property. There are many opportunities; Vancouver is great but it’s not the be-all end-all.
- Favorite neighborhood: In Burnaby, North Burnaby/Capitol Hill; in Vancouver, Riley Park, UBC
- Favorite bar or restaurant: CRAFT in Olympic Village
- West-side mansion or downtown penthouse: downtown penthouse
- Where do you first bring someone from out of town: Gastown, Stanley Park, English Bay
- Dewalt or Makita: Dewalt
To reach Raman: