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His mom talked him into buying a house instead.

“Poor people, the first thing they do is buy depreciating items and rich people invest,” his mom, a supply teacher, told him, echoing a sentiment from a personal finance book she was reading called “Rich Dad, Poor Dad” by Robert Kiyosaki and SharonÌýLechter.

TheyÌýco-invested in a rental property in Hamilton.

Nearly 20 years later, at age 37, Parashis has bought and rented or flipped about 150 properties in Hamilton, º£½ÇÉçÇø¹ÙÍøand the U.S. He hosts a YouTube Channel called Property Hustlers that details his adventures in real estate.

Flipping is big business across the Greater º£½ÇÉçÇø¹ÙÍøArea, where nearly 30 per cent of existing housing was built in 1960 or before. Re/Max Canada flagged renovations and rebuilds as “one of the most underestimated factors” driving up the value of detached houses, which has shot up 35 per cent from 2019 to 2023.

TheÌýStar asked Parashis and one of his business partners, Andrew Cowe, to walk us through the nitty gritty of one of their newest flips, a brick semi-detached Victorian on a tree-lined street in the Junction, which they bought for less than a million late last year and sold in June for almost double.

They agreed to pull back the curtain on the challenges of flipping in one of Canada’s most expensive real estate markets, how much they really make and the one thing that drives themÌýin this high-stakes industry. Hint: It’s not money.

How they found the property

The Victorian needed help.Ìý

While Parashis and Cowe, 36, old high school friends who reconnected after the pandemic,Ìýlove finding a property that only needsÌýelbow grease and a few cosmetic upgrades to turn a quick sale, the three-bedroom, two-bath property near Annette Street and Runnymede Road, near the houses they grew up in, was not that.

Water damage from a leaking roof stained the ceiling. There were holes and cracks in the plaster walls. The original hardwood floors creaked terribly.

The owner hopedÌýto avoid a stream of nosy neighbours showing up at an open house to gossip about how far the home had fallen into disrepair, so they asked if their realtor knew of any potential buyers.

Parashis and Cowe quickly did the math and stepped up.Ìý

Semis in the Junction have jumped 23 per cent in value over the past year and 120 per cent in the past decade, according to HouseSigma, a property data platform. The medianÌýsaleÌýprice for semis in the neighbourhood was just over $1.08 millionÌýwhen the flippers purchased the home last November. They paid $950,000.

If Parashis and Cowe could gut and modernize this home on budget, the location alone — close to transit, great schools, cafes, restaurants and High Park —Ìýwould likely ensure a lucrative sale, they believed. The owner agreed to let them apply for building, plumbing and electrical permits with the city before the deal closed, allowing them to hit the ground running on renovations soon after the property changed hands.

Planning for a target buyer

Parashis and Cowe thought their buyer would be a young family trading up from a smaller house or condo and planned the project accordingly.

First they asked questions:Ìýwhat did other 2.5-storey brick semis in the area sell for? What features did those homes include? What did they leave out?

“We basically need to always look to not renovate beyond what the area commands,” explains Parashis. “In the Junction, you need to do permits, you need to be able to show that things were done safely. Nobody wants to move into a million-dollar home that somebody might feel has been hacked together.”Ìý

While Parashis often converts basements of his flips into in-law or rental suites, his homework and his realtor’s advice assured him this feature wasn’t a priority on the street.

They budgeted $350,000 on the renovation. They gutted the home to the studs, tore down non-structural walls to open up the main level, re-insulated the entire home, added new plumbing, new electrical, new windows and doors, engineered hardwood flooring, recessed lighting and new shingles. The primary bedroom got built-in wall-to-wall closets. Bathrooms got heated floors. And the kitchen got new appliances, quartz counters that look like Carrara marble and an island that seats three.

“LookÌýat what’s going on around you and don’t get too emotional about it,” Parashis says on choosing finishes and features. “We need to make something that is not going to offend somebody but is also not going to be completely unstimulating to somebody.”

Early in his career, he experimented by installing an open-concept bathroom in the primary bedroom, a design idea he borrowed from a boutique hotel.

“We got very mixed reviews,” says Parashis. “I’ll never do it again.”

Borrow money to make money

To finance the flip, they reached out to a private lender for a six-month open mortgage. While the interest rateÌýin situations like this is generally high at 10 to 15 per cent, Parashis and Cowe said they’reÌýfocused on the potential profit margin and how quickly they can reinvest into the next project.

Parashis has beenÌýpractising something called the “BRRRR method” (pronounced like brrrr, as in wow, it’s cold) since his teens: Buy, Rehab, Rent, Refinance and Repeat, though he’s skipping the rent and refinance stages on this one.

Few flippers can succeed on their own.Ìý

In this case, Parashis and Cowe relied on five friends to help provide the combined $350,000 in “hard cash” for the renovation plus an extra $85,000 in carrying costs, which includes taxes, mortgage, interest, insurance and utilities. The funds they raised through friends also covered closing costs, which amounted to about $100,000.

The friends loan the money in exchange for a projected return on their investment, says Cowe.

All in, including the original purchase price, the flip cost roughlyÌý$1.485 million.

Listing the ‘showstopper’

On May 22, they listed the three-bedroom, three-bath house for $1.449 million, pricing it under what they wanted in a potentially risky but calculated move to attract a larger pool of buyers who capped their search at a max price at $1.5 million. The real estate listing called it a “showstopper” and a “stunning back-to-the-bricks renovation.” It highlighted the renovators’ attention to detail: stair lighting, bar area with wine fridge, newly sodded and fenced yard.

The flip yielded seven offers.

After eight days on the market, the revamped Victorian sold for $1.810 million, which is about $800,000 more than the median value of a semi-detached in the neighbourhood.

The buyers turned out to not be a young family but a retired couple who wanted a nice space to host their grandchildren.

Parashis, Cowe and their partners split a profit of roughly $300,000, which they divided based on a set percentage they agreed on before the project began. The shares are weighted according to the level of risk they agree to carry and their assigned roles. This time, Cowe gets a larger cut because he acted as the project’s managing partner.

In this business, success carries a weight; it perpetuates the stereotype of the “greedy investor,” said Parashis. “For the people who do particularly well, though, there’s always an interesting driving force. It sounds very fortune cookie-like when you say it, but it really does seem more like money is a byproduct of that force.”

For Parashis, who recently got married, it’s the voice of his mom in his head. She died a few years after they started investing together.

For Cowe, who spent $30,000 on a private education to learn about real estate investing and creative financing when COVID-19 prompted him to rethink his career in the travel industry,Ìýflipping allows him to work primarily from home, to be closer to his young son and wife. Sometimes he works 12-hour days but there’s a lot of flexibility, he says.

“It’s not really about money,” Cowe said. “It’s about creating freedom. To have more time with family and friends. I just regret not doing it sooner.”