OMG! Somebody call 911

fire house 11

Would you buy this Guelph house? It was torched. One of the Blog Dogs is foaming at the mouth to snap it up under Power of Sale and breath life back into its toasted corners.

The property is listed at $98,000 and, if it were not a lump of charcoal inside, might normally sell for about $280,000. The challenge is, it has gone from being a flaming disaster to a hot property – attracting a slew of people who figure they can buy it, fix it and flip it – including our colleague.

He looked at it last week, and says he offered way over asking – $138,000 – one of four competing offers. The bank which owns the place has put off making a decision on the successful bidder until Monday (July 13), at which time there could be an even larger pack of motivated vultures.

The question is, what should he do now?

In his own words, here is the situation:

It’s just off the main highway and lovely toasted….burnt to a crisp. The bank says 198k to fix the place based on a quote.  My brother and I are in construction so we can do it ourselves and have the time.We’re planning on 3-4 months and under 50k in materials to fix it.  We figure 4k/month x 4 months x 2 people = 32k for wages (us), 30-50k materials (including taxes, insurance, closing, etc.).  The house is suspected arson – no one was killed and the house is repairable i.e. not condemned.

The question is, should we up our offer.  We’re in for 138k no conditions putting us at 220k all-in paying ourselves a wage so obviously we’ve left room for profit and the unforseen.

I’m not looking to decide IF I should buy, but advice on how tight we should get to the 280k that the house is worth leaving for profit.  I lost a similar battle 5 years ago on a termite house that went 100kover asking price (way over my limit regardless).  So now I’m thinking I should be aggressive on this one and put in a second offer at the shot of pulling in 80k or so each in 4 months.

We CAN do the work, we are able, not a question, and we are self-employed, with paid off houses and so forth and very creative and industrious/hardworking.  The challenge thrills us, but also appearssimple with our background.  If I hear back from you, I can give you a blog update as to how many offers came in and what the final sale price is as an example of the house lust if you like, but of course not until an offer is accepted! So what do you say!?!

Well, Vultch, this totally sounds like a guy thing. Burnt two-by-fours. Wrecking bars. Jackhammers. Twenty-foot bins. Awestruck neighbours in minivans. Massive destructive violation, followed by a demonstration of manly prowess.

Yeah, I dig it.

Now, given the info you have provided, this is more a project than a get-rich thing. After all, you both already have houses (and your brother would have to sell his, or rent it, in order to move in and safely claim this as a principal residence – especially now). You’ll also have to declare the income you pay yourselves, unless you claim it as profit – and it’s taxable in either instance. So how much you pay for this pile of ash of course determines the financial outcome.

I’m also assuming you guys will do this whole thing – including buying the scorcher – out of cash. So, you will be risking at least $50,000 in materials plus the purchase price, in the hope of selling it for a gain sometime in the next year. This involves more than a little thought.

For example, what will the real estate market be like next Spring when you go to unload? That’s an open question, since mortgage rates might be higher or the second leg of the financial meltdown have arrived. The current mini-bubble might have burned off pent-up demand by then, and lingering unemployment be taking a toll on consumer confidence.

And how about Guelph? The average home price is sitting at $265,000 – higher than the amount you are targeting for the fire house. The market locally has been relatively stable over the last few months, but like most areas outside of the GTA, sales and listings are flat. My real concern is for the auto sector, since Guelph has a high exposure to the parts business. Just look at the unemployment rate – a year ago it was 5.4%, and today it is over 8%, a huge increase. The question is, will higher mortgage rates in the next year combined with rising energy costs (Guelph is a commutershed city) and higher jobless numbers take a toll on house prices? Could this deflate your adventure?

Finally, will this house have a stigma? Will prospective buyers walk in, sniffing for smoke? Will this diminish its curb appeal, or force you to compensate with higher upgrades?

But, you don’t care, do ya Vultch? You’re going to do this thing anyway. I can smell the singed whiskers from here.

So, in a bidding war, you know the rules: Make your offer irresistibly clean. No conditions. Not on financing, or inspection, nothing. Just make sure you get an up-to-date survey. Offer a big, honking deposit with your offer – something impressive like $100,000. And go for the earliest closing possible. Like next week. This is stuff the bank will find attractive, in addition to the price offered.

And speaking of that, sounds like you have a little wiggle room. If you spend $50K on materials, $30K on wages and assume a realistic selling price of $260K (after commission, and factoring in a slightly softer market) then an offer of $150K leaves you with a modest $30,000 profit – fifteen a piece. And bragging rights. Better still, you could donate it here.

And we expect a full report.

Here’s his update at 6 pm EDT:

12 offers early this am and now 14 offers at closing, I’m not sure if that’s the final call or not but this is what I’ve heard. Let see what shakes out overnight. I presume the bank is closed right now and will pore over the offers sometime tomorrow. Seems like a nice group of greater fools (and one I predicted)…. now if I succeed the tale will only be told if I can get in under the wire I’ve set for myself.

Update at 8:30 pm EDT:

The house had 14 offers and sold for a final price of 151k according to my agent.  I can’t say this is 100% official, but I’m pretty sure. I have no regrets about missing this deal (as it’s not a deal any longer).  I’m always looking for the next one and this is after sitting on my hands for 7 years.  Too many fools to compete against, I’ll just keep doing renos for them in the meantime, I’m really surprised (in one sort) that so many people figured they could handle the scope of this work.  It was extensive.  Anyway, thanks for posting the POS before it closed.

Chris L.

fire11


109 comments ↓

#1 Charles T. on 07.12.09 at 8:49 pm

Unlike the United States, Canada still publishes its M3 Money Supply figures. I got the following from two releases which Statistics Canada put out on July 10, 2009.

In the 4 years from 2004 to 2008 Canada’s M3 Money Supply increased by an average of approximately 11% per year.

http://www40.statcan.gc.ca/l01/cst01/econ07-eng.htm

Over the last year Canada’s M3 Money Supply increased by 3.5%

During May 2009 Canada’s M3 Money Supply DECREASED by 0.5%

http://www40.statcan.gc.ca/l01/cst01/indi02a-eng.htm

#2 Chris L. on 07.12.09 at 9:23 pm

Dude, you were supposed to wait until tomorrow at 1 pm to post this! lol And btw I never offered 138k, it’s something a bit more reasonable than that. Only a realfool would pay that much for this trash bin. You should post the photos of the closet and hallway. I can forward those to you as well. The house needs a minimum of 100k in repairs (just materials). I’m going to go on record saying that the place fetches 180k and gets 12+ offers hands down and the actual buyer goes hard in and just barely goes bust. We picked the agents brain and she said probably more like 120k would do it on the first four offers. I bet it goes to someone thinking they can get a livable house for 220k if they put 40k in and do the work themselves living on the mainfloor (hence 180k). Greater fools turned greater vultures! In time even these amateur vultures wont be able to use solar convection to keep their wings surveying the land below!

p.s. now that you’ve broken it all down for me, I’m off to make a more powerful offer, catch you after 5 p.m. with updates!!!! Wish me luck :)

Dude: When you send me an email, and links, and your life story, I give you some creds. Spill. — Garth

#3 Grumpydawgs on 07.12.09 at 10:00 pm

” Things always cost more and take longer than you had originally planned for”.

This guy needs this deal, so that we can mock him. There is no way 50K is going to reno this dead ship. If you wonder why you are so much smarter than the banks reno quote at 200K then you need to give your head a shake. Fire insurance contractors are the stingiest guys in the business. If they say 200 than it will probaly cost you 260.

Never mind sending the 30K profit to Garth, send the 138 to me and I’ll slap you silly, just like the markets going to do. At least you won’t have to wait to be told what a fools paradise you’re living in.

You should be standing on the sidewalk with a beer on Monday cheerleading the fools on their way to destruction.

#4 Real Estate Deal or No Deal on 07.12.09 at 10:04 pm

This is property is a waste of time. Too much work for the return.

#5 Republic_of_Western_Canada on 07.12.09 at 10:04 pm

On moral and esthetic grounds they should sneak back in there tonight to torch it again and finish the job. What a fugly waste of… everything.

Let the bank or some other fool take the project risk on this one. If they’re in the construction biz, they should be able to get this job on time & materials. If they’re sneaky, they could even stretch out the labour to get 50K apiece. No headaches, lost sleep, etc.

Previous estimate was 200K just to rebuild it, not buy it and rebuild it. Only if they could get this Detroit Special for 12K tops, would it be worth a stretch.

#6 Jeremy on 07.12.09 at 10:06 pm

Why are people so committed to having Garth douse their lousy ideas with his brash brand of logic? If you want to do some crazy ass scheme, then just do it, don’t tell Garth Turner, he will probably give you some decent advice but he’s going to call you the putz that you are at some point in the discussion.

#7 miketheengineer on 07.12.09 at 10:08 pm

I bet you could find a whole bunch of old homes in Hamilton, that you could get, without the bidding war. They would be similar to the above one. Look on Kenilworth Ave, between Main St. and Barton. I saw a whole strip of old semi’s in similar condition. Could most likely get each for song….but then again what do I know.

Mike

#8 Dan in Victoria on 07.12.09 at 10:24 pm

I just scratched out some numbers here at home. Pretty close to your figures,if you do it yourself. Thing is your looking at November before its done.The only worry is like Garth says where will the market be?A friend of mine did a fire job back in the early eighties, made a good buck on it. His eyes still glaze over every time he talks about it.Tip for you,when playing poker,don’t show people your cards.

#9 Nostradamus jr. on 07.12.09 at 10:39 pm

“Vancouver gives boost to electric cars”

City has become the first in North America to require developers to put electric-car plug-ins in a percentage of new condominiums and apartments

http://www.theglobeandmail.com/news/national/vancouver-gives-boost-to-electric-cars/article1215643/

(The SkyTrain, mass transit system for this small city of 900K is also something to behold.

Vancouver will become North America’s Financial, Trade, Culture and Leisure capital of North America.)

#10 Potato on 07.12.09 at 10:53 pm

If one of you is willing to live there, and if the house/neighbourhood is comparable to where you are now, then one way to reduce the risk of the market shifting (and the stigma of a salvage) is to sell one of your places now, and move in there (preferably with a long close so you don’t have to physically move until renovations are finished).

#11 Realtor on 07.12.09 at 11:01 pm

I would strongly caution the potential buyer of the Mcfried Mansion in Guelph that he should definantely be concerned about the stigma that a repaired house that had a fire can cause. I can speak from personal experience that trying to resell a house that has had a fire in the recent past can be difficult.

That house will for quite some time now, be known by the locals in the area as the “house that the guy tried to burn down”. Just something to think about before you decide to become a greater fool and spend your Mcmillions on this Mcfried Mansion.

#12 Nostradamus jr. on 07.12.09 at 11:04 pm

<Americans swap homes for hotels as recession bites

In Massachusetts, a record number of families are being put up in motels due to high unemployment and the rising number of homes going into foreclosure, costing taxpayers $2 million per month but providing a lifeline for desperate families<

http://www.reuters.com/article/newsOne/idUSTRE5694XV20090710

#13 bigpictureguy on 07.12.09 at 11:05 pm

It would be funny if the market turns on the 2 bros when they decide to dump.

But hey! No risk. No reward. Right?

Russian Roulette is always in vogue with RE

#14 Nostradamus Jr's Analyst on 07.12.09 at 11:19 pm

And then, just when you get the burned out wreck all done and ready to sell…rats!

http://www.independent.co.uk/environment/climate-change/the-planets-future-climate-change-will-cause-civilisation-to-collapse-1742759.html

#15 nonplused on 07.12.09 at 11:20 pm

Probably going to have to goin with a hoe and take it down to the foundation. Bid land value plus foundation value minus wrecking.

#16 Alberta Ed on 07.12.09 at 11:25 pm

What would Mike Holmes say? My guess is his estimate to rebuild that place would be WAY higher…

#17 Investx on 07.12.09 at 11:34 pm

Nostradamus jr. :

“Vancouver will become North America’s Financial, Trade, Culture and Leisure capital of North America.)”

Oh boy, the annoyance starts again. Are you really an adult? LOL

#18 OttawaMike on 07.12.09 at 11:34 pm

Chris L,
As a side biz I do mechanical contracting. Last month I did some work in the basement of a burnt out Orleans home larger than your project but not dissimilar.
The house was totally gutted to the stud walls, siding, windows, everything replaced. Insurance was up to 425k$ spent on a house that might sell for high 3oo’s. Worst part was they had to go back into the finished basement and tear the new ceiling down to respray and seal the fire smell as the main floor hardwood staples had broken throught the seal and let the odour out.

Insurance guy told me you never really know what to expect until you start working on the fire damaged property. Of course contractors never inflate their prices on insurance restoration work either…

I have looked at 4 POS in the past 3 months and the bidding was silly every time. People just get auction fever. In all cases the buyers overpaid , in one case I estimate 50k$ too much considering the repairs needed. Caveat Emptor dude, is how the Romans put it I believe.

#19 ted on 07.12.09 at 11:49 pm

Always think of risk/reward. A hell of a lot of risk and hard work for very little reward. If all goes well with no hiccups you might be able to split $30000. I could imagine you making this by taking a second job at tim hortons.

#20 Jay on 07.12.09 at 11:50 pm

Don’t know if you know much about it, but look into dry ice blasting to save some the studs and kill the charred smell. It strips the charring and leaves the place smelling of sawdust and not smoke.

#21 kitchener1 on 07.12.09 at 11:52 pm

From my numbers, your quotes are doable, assuming you guys are capable of doing the labour yourself. Its one thing to to repair a house to resale, another thing to repair it for actual living.

Living in the area, manufacturing is dead in Kitchener/Guelph, I dont know were to look for numbers but I would bet that there is a net loss in terms of population. Tons of vacancy signs all over the place.

One thing to keep in mind regarding final profit numbers, Guelph is a small town, anybody local or just about every RE agent is going to know the history of that house so getting top dollar is out of the question.

Either way, good luck

#22 Ed on 07.13.09 at 12:22 am

Hey Garth, Awesome website – Just want your opinion (or anyone else) on want the banks might do next year concerning interest rate hikes. I prefer VRM however my wife wants the security of locked in mortgage

I have a $294,000 mortgage locked in at Scotiabank for 4.3% ending October 1, 2010 (the principle will be $281250 then). Other banks are offering cashback incentives for ones’ mortgage business: 2% cashback with a 3 year closed mortgage (or longer) of 3.3%. The cashback would be $294,000 x 2% = $5880. However I would have to pay a $3180 penalty to Scotiabank for breaking the mortgage. A $2700 profit for switching banks. My question to you (or anyone else) is that:

1 – Do you think banks will still have this incentive come October, 2010 when the Mortgage rates start rising? I do not have to pay the $3180 penalty after October 1, 2010 and I am hoping not to have to pay it.

2 – What rates do you think the banks will have (estimate of how much higher) after October 1, 2010?

The current posted rates are:
Prime: 2.25%
VRM: 2.75%
1 Year Closed: 3.25%
3 Year Closed: 3.75%
5 Year Closed: 4.25%

Any Idea what these rates will be in late 2010′?

3 – Come the summer of 2010 when interest rates hike, what advice can you give concerning VRM vs locked in?

Any information about any other Bank Programs and/or information would be greatly appreciated. I want to so that I use the banks to MY ADVANTAGE, not the other way around.

Ed – Vancouver BC

#23 crs on 07.13.09 at 12:31 am

I think this guy is a fool. It seems he knows his business, but he is getting sucked into the greed trap of making a profit on the flip. The best thing he can do to drum up business would be to partner with people that (think they) know the business of buying and selling houses, and handle the business of renos. He has to minimize the risk of the market turning and focus on his primary business. If he takes a look at the other bidders maybe he’ll find himself the perfect client.

One other thing he could do, although I think its too risky, is to make the offer, then try to pre-sell the house before the work is done. He won’t get as much, since there still needs to be a profit for the speculator, but speculating is a fools game. A lot can change in four months. Let someone else do it.

#24 davers on 07.13.09 at 2:13 am

I must say I am surprised this would even be repaired if assessed at 200K in damages. A complete rebuild almost seems to make more sense. Fixing absolutely all of the damage sounds very tough, and I would be hesitant to buy it from two guys who did it themselves.

#25 Munch on 07.13.09 at 3:08 am

Perceptions!

That’s the problem, and the reason why real estate still has a long, long way to go – down!

As long as people still view real estate as a way to make a quick buck, it will continue to punish them

I’m a dumb critter from South Africa and even I know that!

#26 Mike (Authentic) on 07.13.09 at 3:55 am

Taxes. That’s where it will hurt most. It’s not under the “primary residence” rule so you will be looking at a MINIMUM of:

$12,612 of your wage/profit going to tax.

That will cut your $30k profit in almost half. IF you can sell it for $260k.

I’m with the others, $50k in materials do not go far, if you want to do a proper job on it. I guess you could buy some cheap drywall from China, I hear they are giving the stuff away…

It’s a suckers reno, it will suck you in, suck you over budget and will suck to sell. “Next to main highway”? Remember, location is king! Next to a main highway is not location.

If I was the next door neighbour I’d buy it for the land, knock it down and have a real yard.

Mike

#27 Mike (Authentic) on 07.13.09 at 4:03 am

Update.

I checked out the address and location. This home’s backyard backs directly onto Highway 6 (Hanlon Parkway), a 4 wide lane job that looks like an 8 lane in the future (Which directly connects to the 401 highway, 5km south). Across from the highway from this house is a major industrial/commercial area.

Walk away. This is not a good location and a dog of one to sell.

Mike

#28 Bottoms_Up on 07.13.09 at 6:15 am

If the bank’s asking $98,000 you should be offering $75,000. Good luck.

#29 David Bakody on 07.13.09 at 6:19 am

#2 Chris L. on 07.12.09 at 9:23 pm

Lesson #1 Chris …. in the vulcher world it is dog eat dog and should you go ahead with this deal you are about to learn more lessons big time as those real professional vultures start turning the screws to make an example of those who enter their game.

I posted a story here about a good friend who tried to play with professional contracts and lost (Big Time!) Chris one thing is to play house flipper when the lions are asleep and their bellies are full …..good luck bon chance ….. but hey got for it ….. a fool (s) and their money are soon parted.

#30 David Bakody on 07.13.09 at 6:23 am

#7 miketheengineer on 07.12.09 at 10:08 pm

Barton and Catherine was my home ……nice to hear Hamilton mentioned ( walked to the ode Empire Theatre) Tigers eat em raw ….oski we we and local 1005

#31 john m on 07.13.09 at 6:59 am

Looks to me like a venture that spells disaster,i wouldn’t pay a nickel more than the value of the lot(perhaps less).The whole house needs to be gutted perhaps torn down (which puts its value at less than the going price for a lot). You can’t make a silk purse out of a pigs ear :-)

#32 OttawaMike on 07.13.09 at 7:34 am

Recently speaking with a 30 year veteran from the Ottawa Fire Service about burned out houses. He told me it is part of the fire fighter’s culture to save whatever they can of the structure and if the place burns to the foundation there will be ridicule to pay upon returning to the fire hall.
His take after years on the job, if its badly gutted by fire do the owner a favour and let it burn safely. Of course that never happens as they do everything possible to save the charred hulk.

A fire gutted repair is like a branded, accident repaired salvage car. It’s history always affects the resale price.

#33 Chris L. on 07.13.09 at 8:16 am

Here’s the bbq in action!

http://watch.ctv.ca/news/mynews/flames-engulf-home/#clip66997

#34 JT on 07.13.09 at 8:34 am

When the time comes to flip it, buyers won’t want to touch it.

The conversation would look like this:

“Did they replace the roof an trusses? Did they replace the walls…? Did they skimp out on some of the framing on the 1st level?
.. ahh forget it hunny, let’s just go see the next house on the block. Their are three for sale in this model alone”

So basically your banking on finding a very naive 1st time buyer. Apparently there are lots of those too so what do i know ;)

#35 dd on 07.13.09 at 8:35 am

Where are all the gold bugs lately?

#36 dd on 07.13.09 at 8:40 am

#9 Nostradamus jr.

…City has become the first in North America to require developers to put electric-car plug-ins in a percentage of new condominiums and apartments…

Calgary is way out in front on this one. There are electric plug-ins everywhere.

…The SkyTrain, mass transit system for this small city of 900K is also something to behold…..

Calgary can built is cheaper.

#37 David Bakody on 07.13.09 at 8:48 am

#28 Bottoms_Up on 07.13.09 at 6:15 am

Ditto man …. a few years ago y’all could take a wreck to the auto wreckers and get 50-100 Bucks to-day you have to wait/pay to have junk taken away …… so it would seem the bank should pay people to take over the house …. by the way Chris there are 3 submarines here in Dartmouth tired up at NAD that the government will unload for $1.00 (One dollar each) no takers in over 5 years!

#38 miketheengineer on 07.13.09 at 8:49 am

David #30

Hamilton is a very old and odd city. Best hiking around, lots of water falls, parks. The real estate is unbelieveable in that city. You can find what ever you want there. 100 year old homes, new ones, ranch, side splits, etc, and the price is reasonable. In Peel region, you can only find 2 story with garages in the front. Each and every one of them is the same. You have to go into the 500 to 600k range to find something with some other design.

There are some areas in the lower city that need demolition, no question. But there is opportunity there, real opportunity, if you can fix stuff. I say in GTA if you want to be like Mike Holmes, go to Hamilton, you will drool at the mouth, when you see the homes in need of repair.

The guy next to my parents home, just sold. 1950’s bungalow, ~ 1500sf, finished basement, about 50k in landscaping, 18’by30 foot garage, 20x20covered patio, parking for 8 cars, park like setting, pie shape, big garden, for ~250,000. Walking distance to water falls, and I think 4 parks. This house was in move in condition, nothing to do. In Peel region it would have sold for 500k easy. When houses go up for sale on mom’s street they go very quickly. People come and stay a life time on that street and area.

The lower city bounds with opportunity….to fix and repair.

#39 aaron on 07.13.09 at 8:50 am

#22 Ed on 07.13.09 at 12:22 am

A cash back is never free. Banks make it up by charging higher interest rates. 3.3% does seem like a low rate but 2.7% seems better. (based on 0.3% for each 1% of cashback on a 3 year term). Cashbacks get repaid with interest (around 15%) plus it increases penalties paid if you pay out early.

#40 AlbertaGuy on 07.13.09 at 8:55 am

Given my recent experience in home renovation, you should double your estimate in both time and money required. Doesn’t look like a viable project to me.

#41 Devil's Advocate on 07.13.09 at 8:58 am

Big undertaking. Renotations always have a way of growing and growing and growing. You don’t know what you are into until you open it up… especially where fire was involved. Wouldn’t be surprised if you ended up taking most, if not all, the second floor off to do it right.

In any event, I agree with previous posters that, you are going to face marketing challenges in your attempt to flip it like no other.

Also, will the location support it? Is it a great location, or is it, like has been suggested, backing onto a highway?

You may have construction experience but this is more than a lipstick and rouge reno.

All that being said… education is a bargain at any price and, should you proceed, you will, trust me, get an education.

Maybe give some thought to buying it, rebuilding it on the cheap and renting it. Renters are not so picky as buyers and if you can do it cheap the ROI might be just as attractive and more attainable.

Good luck… you’re gonna need it.

#42 Bill-Muskoka (NAM) on 07.13.09 at 9:14 am

Unbelievable. That house is structurally unsafe art this point and should be condemned and demolished. Who is allowing it to even be listed? Sounds to me like the insurance company is trying to sooth their loss.

#43 TO GIRL on 07.13.09 at 9:24 am

I AM REFINANCING MY MORTGAGE AND HAVE BEEN OFFERED A RATE OF PRIME + 1 ON A HELOC OR VARIABLE OPEN +8 FOR 5 YRS
I DONT KNOW WHICH WAY TO GO FOR THE LONG TERM ANY SUGGESTIONS

#44 Samantha on 07.13.09 at 9:29 am

Chris L –

What about permit and inspection cost?

The house is situated on a small lot in what appears to be a cookie cutter neighborhood. And, as others stated before this could turn into a Pandora’s McFried Box.

If you and your brother have these kind of skills, why not do some reno’s for people who need to stay put but want extra space? Could work for you and your bro without a lot of risk.

If you can’t afford to lose the money, don’t risk it.

#45 Herb on 07.13.09 at 10:18 am

Having had the experience of dealing with hidden fire damage in a renovation …

Forget it! It’s not just the burnt/charred studs and joists you will have to replace. There was a lot of water poured into the flames that will have affected other structural elements as well. Late in the game, but a structural engineer would be useful. The real project might consist of buying the lot, removing what’s left of the existing structure, and building a new house.

Rerun your estimates on that basis, reconsider your potential return in a down market – and find yourself other work.

#46 Nostradamus jr. on 07.13.09 at 10:34 am

Wealthy Californian citizens are selling and quietly relocating to Vancouver BC.

http://market-ticker.denninger.net/

#47 Onemorething (aka DaHKkid) on 07.13.09 at 10:43 am

Had dinner with a very seemingly wealthy West Van $1.4M Home Owner last night. House is paid for, owner 68 years old. When topic of Vancouver property, especially West Van all bets were off on any correction downward. Only blue sky!

I asked this well educated lawyer WHY? We are not like the rest of Vancouver! the owner said! I said how about the rest of the planet? No Answer!

After explaining what was going on in the rest of the world and especially the next wave of downside in the US. Dropping the makeup of GDP in Canada Issue, Unemployment figures, potential par USD CAD and export issue, Canadian CC debt etc etc.

The owner just could not absorb these real facts and conclude that RE could fall. This from a lawyer who is doing more business than usual but in areas which show the above also via CC refies, debt consolidation, and foreclosures. bla bla bla.

I concluded a bubble could just be created by West Van owners alone living in glass towers and drinking what they felt was fabulous Sauv Blanc. He only listened as A/my points could not be disputed and B/I am wealthier than he, which seemed to make all the difference.

The food and wine was nice, but was nothing spectacular, kind of like the host!

More zombie like observations coming shortly!

#48 Jimmy Gopter on 07.13.09 at 10:43 am

After watching the video of the house burning in #33 all I can say is, Man is the buyer of that burned out house every stupid.!

#49 r1200c on 07.13.09 at 10:49 am

And don’t forget the fire happened a year ago!

All documents relating to damages of the property may no longer be accurate: since deterioration, rot and freezing must have done its toll over last winter – but hey… you may even get a few free critter-tennants to chew on while banging away on this dawg.

This is also a small community – everyone on the block is going to see the two brothers trying to make a quick buck and “brand” the property in a hurry: this isn’t good.

advice: you’re better off to go to vegas, put all your money on black and have at least a 47.3 % chance of doubling up…

#50 Uncertain on 07.13.09 at 11:15 am

People like this prevent the housing market from correcting….. think about it for a moment. They are willing to pay more than asking for a house that is destoyed…. warped thinking in today’s economy.

I would never buy this house if it was only fixed. This house needs to be taken down to the foundation and completely rebuilt; otherwise it’s the house that burnt…

#51 [email protected]!t on 07.13.09 at 11:28 am

You guy want to see a greater fool? A 28 year old bachelor is paying $539K on his first home.

http://www.yourhome.ca/homes/realestate/article/663211–recession-s-bright-side-happy-new-homebuyers

#52 613 Happy where I am on 07.13.09 at 11:45 am

What is wrong with tearing the toasted building down and building something new… ????

It seems all this guy is seeing is $$$ in profit… I wouldn’t touch a place like this even if it were 12K in Detroit….

Good luck if yours is the successful offer.

#53 rory on 07.13.09 at 11:47 am

#9 Nostradamus jr. you said: “The SkyTrain, mass transit system for this small city of 900K is also something to behold.”

Nord, I call BS …your going to have post better facts …well facts period…the GVRD, which the skytrain serves has 2.2 mil + people…all these people pay for the skytrain thru Translink taxes and user fees…it was built to import worker bees who cannot afford to live in the the most expensive area in Canada …and North Van has no skytrain…just 2 rusty bridges and a people ferry…best part is that when the bus drivers strike the trains keep running (they are on auto pilot – no drivers)

The skytrain is a good thing …want to cut down on greenhouse gases & oil consumption just make mass transit use free…ridership will skyrocket …i know who pays …society is going to pay one way or the other …so yes taxes on all will go up to cover or we can charge drivers who use the roads …all kinds of ways.

As to the burnt home …if i knew (hopefully it needs to be disclosed) it was a burn job …never would buy it …you just never know what they did not fix…IMO.

#54 VOODOO on 07.13.09 at 11:55 am

Canada’s immune! Canada’s an island! Real estate prices will stay high! (not)
Check out the Canadian mattress industry below….
—————————————————–
http://www.theglobeandmail.com/report-on-business/historically-firm-mattress-sales-turn-soft/article1215640/

The recession has knocked the mattress industry – once a rare place of stability in the hypercompetitive world of consumer goods – on its back.

“I went through recessions before and people in every other sector were saying, ‘It’s terrible’ – and I just plowed through it,” said Mr. Brouwer, who has worked in mattress retailing for 21 years. “I’ve never had a problem before and I have one now.”

#55 Kelly McMae on 07.13.09 at 12:04 pm

There’s got to be a better option if you’re keen on a reno flip and split. If you’ve got the time and the experience though and don’t mind just breaking even then have fun. I’d say look around some more first, as this one sounds like a teaser that’s trying to turn your attention from something better.

#56 Future Expatriate on 07.13.09 at 12:18 pm

I say go for it, but be prepared to live there for at least two decades if you want to turn a profit on it.

If it’s not the kind of house or place you want to live in for at least that long, then wait for one to come along that is.

It won’t be a long wait.

#57 Keith in Calgary on 07.13.09 at 12:22 pm

If those guys have ever watched “Flip That House” on TV, they’ll soon realise it’s too late……they are over extended financially already with that $138K bid IMHO, and you always go over budget doing reno’s…..and as this is going to be such big one, expect to see that happen big time.

Doouuhhh.

#58 Just a Girl on 07.13.09 at 12:25 pm

Lust is not rational.

What’s missing is perspective. Make a list of at least two other options, where to risk your money. If you still pick the burned out, water logged, neglected house in the poor location, and think your money will safely return to you, well then, good luck to you.

#59 Got A Watch on 07.13.09 at 12:32 pm

“Fools rush in…” this is so 2005, isn’t it? Is “Flip This House?” still on TV in Guelph?

Yet, I hear on the radio euphoria from real estate statistics, “record sales fueled by low rates and easy affordability!”, “Vancouver real estate soars”, “Conference Board of Canada predicts 7% growth to resume in 2010, on rising commodity prices, rebound in the US housing markets, but labor market suffers weak growth, not a typical recovery that we’re used to”.

Reality dis-connect. Just because some delusional part of the populace hasn’t heard there’s a bit of an issue with the economy, does not mean it is not really happening. On TV talking heads mouth confident words. Have they gone out on the street and looked for a job, I think not.

It looks like many years yet before we see a recovery in real jobs, other than part-time casual. Welfare rolls will soar, as EI runs out. People will be angry. Government revenues will be decimated. The real world decline in GDP I see from street level is steep. We are still in deflation, and look to be stuck there for some time. The velocity of money has dropped to near standstill I suspect.

Desperate Governments can print money to devalue currency and fuel that inflation fix they crave. Propping up insolvent Banks and Banksters and dinosaur industries and bad paper, all over. Fixing the real economy, not so much.

I can see next year being much hotter than this one. Many more matchstick renovations.

#60 Mike B formerly just Mike on 07.13.09 at 12:32 pm

Talk about a waste of time and money… Better to take your cash and invest in something that has a guranteed rate of return.. This requires agents, lawyers, tours through the house and of course building permits and inspectors blah blah blah… Not to mention this backs onto a highway…

#61 Got A Watch on 07.13.09 at 12:46 pm

“Developing story on Goldman-Sachs ‘as we speak’ indicates they were sniffing trades from other co-located trading companies near the NYSE, then quickly placing their own trades in advance for a daily profit of 100 million dollars a day over this last year.”

This is legal, they get paid $ 0.25 cents per share to be a “Supplemental Liquidity Provider” by the NYSE. Inherently, in order to do this, they have to get the order-flow information as it occurs provided by the Exchange. It is perfectly fine and legal as far as the “authorities” say, you can read much more at Zerohedge Blog, they have been all over this for months. An excellent Blog for the inside dirt on today’s markets btw.

It seems program trading accounts for some 70% of NYSE volume now, and the vast majority of that is HFT or High Frequency Trading done by super-computers on very fast low-latency connections. Probably similar in most advanced financial centers.

If you thought the “Market” was out of control, yes, in fact it is, machines make decisions at the speed of light, based on “assumptions”, which is where the rubber meets the road. It’s machine vs machine. Humans have become irrelevant in some ways, the machines trade on unless shut-off.

Yet they are really just reflections of their programmers assumptions. When so many follow the same sets of assumptions, they can create the same herd behavior as a group of human traders.

Humans can make their brain hurt pondering all this.

#62 Nostradamus jr. on 07.13.09 at 12:48 pm

#47 Onemorething (aka DaHKkid)

…So now you posted your views twice about the North Shore…West Van and Deep Cove (North Van).

Perhaps if you attached a few pictures of both areas, people on this blog can compare and might understand why $$$ Real Estate prices may not really be expensive compared to other similar priced neighbourhoods across Canada.

Living on the North Shore “combines” both City and Weekend Retreat Lifestyle.

Here are some URL’s.

http://www.deepcovebc.com/deepcovebcimages.html

The North Shore is the Paradise of Canada.

#63 Alex on 07.13.09 at 1:08 pm

Regardless of the damage caused by the fire, the City will likely will want to cover its neck and will require the letter from the Structural Engineer on house integrity. Also, there will be cost associated with the Partial Demolition Permit and the Building permit as well as Engineer’s and Architect’s fee. This will add to the re-construction cost another $10,000-15,000 minimum.

#64 Uncertain on 07.13.09 at 1:18 pm

Garth and blog dogs,

Please read the following article form Rolling Stone, I promise you will find this interesting…..

http://www.rollingstone.com/politics/story/28816321/the_great_american_bubble_machine

I await your take on the article

#65 dd on 07.13.09 at 1:20 pm

#46 Nostradamus jr.

…Wealthy Californian citizens are selling and quietly relocating to Vancouver BC….

The majority of this movement happened in 2005 and 2006 when the US prices were at the highs. U are behind in your reading Njr.

#66 Bill-Muskoka (NAM) on 07.13.09 at 1:23 pm

I’d love to read the liability exclusions the RE firm is insisting on. ‘As is’ doesn’t even begin to wipe those issues away. How could it even pass a home inspection?

Mould Palace perhaps?

Saw another POS for sale in Thornhill this weekend. The prior owners were going to build a two-storey home, did, complete with swimming pool, BUT, the home was NEVER APPROVED as only single story homes are allowed in the neighborhood. The pool remains but the house was TORN DOWN. Nice weeds though and no listing available.

#67 pjwlk on 07.13.09 at 1:23 pm

#27 Mike (Authentic) “Walk away. This is not a good location and a dog of one to sell.”

I agree, I guess that’s why it burned to begin with… lol

#68 Brainsail on 07.13.09 at 2:00 pm

I do not understand this situation. If the original owners had a mortgage the bank would have required that they maintain house insurance for the duration. Why didn’t the bank or the owners get the insurance company to cover the fire damage costs?

Last year one of our neighbors had a small fire and it took about 14 months for the repairs to be completed. It was a very complex process because of the many different trades required and the city building inspectors inspected each phase very, very carefully. It is a 25 year old house and because of the water damage all of the drywall had to be removed first then all of the wiring and plumbing was redone. The city inspectors will require that the entire house meets all present day codes. A very lengthy and costly exercise. These guys will never recover their expenses.

I am an X Canadian that left Alberta in ’83. I am an Architect that couldn’t find a job in Canada, family would not help, house value dropped to half of what the mortgage was and then my X filed for divorce. I presently live in Central Texas and happily remarried to a Canadian. We have been talking about returning to Canada but thanks to all of the information from this site we will never return…nada. Thank all of you very much.

#69 Grumpydawgs on 07.13.09 at 2:37 pm

Mayhem in the Maui market. Big trouble in paradise. On Oahu the poor ‘condotel’ investors take a real spanking. All the right reasons not to buy into this market hype. Unemployment rising, economy sinking, intrest rates have no where to go but up.

Are the prime spots the ‘canary in the coal mine’?

http://www.mauinews.com/page/content.detail/id/520909.html?nav=10

#70 D from London, ON on 07.13.09 at 2:38 pm

When I am figuring on the odds of doing some great deal (aka “money-making scheme”), I always ask myself a version of: “Why isn’t someone else doing this already?”.

If there was a profit to be made on this house someone in the biz (contractor, banker, real estate agent, etc., etc.) would have already done the work and turned the profit. The fact that it’s been sitting there so long and no one who is smarter or faster than you has picked it up yet is a sure sign that this deal is a dog.

#71 MenWithHats on 07.13.09 at 2:38 pm

I can’t believe someone this dumb,actually,owns their own home .
Some will look at it as pre-disaster,thus fire proof, others will look at it as another accident(arson) waiting to happen .
Basically all they are buying is the lot and a scorched basement .
The only value is the soil beneath this pile of rubbish .

#72 Dawn in Calgary on 07.13.09 at 2:44 pm

$265k. I wish. There are some places in Calgary a cool half mil still only gets you the lot. They’re not making any more land, you know.

http://calgary.en.craigslist.ca/reb/1267708888.html

Actually, on second thought, I DON’T wish. We’re going to continue renting indefinitely. We’re paying $1,600 for a place that to buy would be at least $2,400 and banking the difference. Screw the banks.

#73 ottawa pete on 07.13.09 at 2:56 pm

“Ban on 100% home loans dropped”

http://www.guardian.co.uk/money/2009/jul/12/ban-100-home-loans-dropped

#74 ottawa pete on 07.13.09 at 2:58 pm

“Nationwide offers 125% mortgagesNationwide says ‘negative equity’ mortgage will only be available in special circumstances”

http://www.guardian.co.uk/money/2009/jul/08/125-per-cent-mortgage-nationwide

#75 Nostradamus jr. on 07.13.09 at 3:02 pm

…Three Mountains overlook the North Shore…

http://www.cypressmountain.com/index.asp

http://www.grousemountain.com/Summer/

http://www.env.gov.bc.ca/bcparks/explore/parkpgs/mt_seymour/

West Van’s Deep Cove….Horseshoe Bay

http://www.horseshoebaybc.ca/

Lighthouse Park

http://www.seethenorthshore.com/light/light.htm

…You actually would save $$$ because if you live on the North Shore of Vancouver you won’t need a weekend retreat…it’s all here.

#76 Nostradamus Le Mad Vlad on 07.13.09 at 3:04 pm

#59 Got A Watch at 12:32 pm — “It looks like many years yet before we see a recovery in real jobs, other than part-time casual. Welfare rolls will soar, as EI runs out. People will be angry (happening already). Government revenues will be decimated. The real world decline in GDP I see from street level is steep. We are still in deflation, and look to be stuck there for some time. The velocity of money has dropped to near standstill I suspect.

“Desperate Governments can print money to devalue currency and fuel that inflation fix they crave. Propping up insolvent Banks and Banksters and dinosaur industries and bad paper, all over.”

Looking at this site today — http://www.uncommonwisdomdaily.com/the-truth-2/ — gives a little more clarity. Excerpts:

“The United States is now the most indebted civilization in the history of the world and ground zero for the financial crisis.

“Foreign investors are growing very tired of the United States government’s national debt, which has now hit $11.5 TRILLION and is growing at the rate of about $3.88 billion a day. That’s $2.7 million per minute, and $44,000 per second!

“We all see the Federal Reserve (Bernanke, Paulson, Carney up here, etc), the steward of the nation’s dollar, also in hock up to its eyeballs, its balance sheet having ballooned from $860 billion in liabilities in September 2008 to more than $2 trillion today, and likely to rocket even higher as the Fed continues to print money out of thin air like there’s no tomorrow.

“Not to mention the unfunded government IOUs coming due for Social Security, Medicare, and Federal pension payments — totaling an estimated $104 TRILLION.”

For those who can see clearly, it is quite obvious why Harper, Flaherty etc. are letting the debt / deficit balloon, as there is no way it will ever be paid back. To whom it would be paid back, no one seems to know.

This leads to the clip where Harper clearly speaks of a “global govt.” at the G8 meeting last week. The one thing that could happen is when this whole grand ponzi scheme unravels shortly, it may all come down at once, including the elite.

As far as Obama’s new health care bill — http://globaleconomicanalysis.blogspot.com/2009/07/health-care-bill-will-raise-taxes-then.html — that does a fat lot of good for average consumers, most of whom are seeing less and less in their disposable incomes (deflation).

But it does raise an interesting point. Now that the US and UK have said vaccinations are mandatory for this daft pig / bird / human flu crap, what on earth is the point in bringing in a new health care system, as most of us will have been conveniently killed off anyway?

Don’t forget, the 1976 swine flu pandemic had a ratio of 50:1 — i.e., 50 deaths caused by the vaccines, one by the flu.

So it is nothing more than a great way to contribute to the downfall of the american empire.

To another point, I recall reading somewhere of one Home Depot store that opened with great fanfare about three or four years ago. Now it’s closed and being dismantled. For the rest —

http://www.inquisitr.com/16485/home-depot-layoffs-2009-expo-centers-closing/

#77 Republic_of_Western_Canada on 07.13.09 at 3:08 pm

#72 Dawn in Calgary –

That would be the hillside stabilization that bankrupted ‘Fancy Shacks’ no?

#78 malbadon on 07.13.09 at 3:38 pm

Dawn, That lot is overlooking the Bow on a street with 800-1k houses, that puts it on level with Lynx Ridge as far as hoity-toity. The rest of Cougar Ridge looks to be in the “average” range for CGY houses (as average as one can consider an insane overinflated market).

I do agree with you on the rent versus buy, 1600/month to rent a 450-500k house is a no-brainer.

#79 Homeless in the North Shore on 07.13.09 at 4:00 pm

#62

Nostra’s continuous RE pumping is in keeping with the spirit of BC’s most arrogant license plate motto, “Best Place on Earth.” As a Vancouverite, the North Shore is indeed a gem in the rough. It has the following redeeming qualities: the highest percentage of rainfall in the lower mainland (after all, you are hugging the mountains) which is a coup for Raincouver where it rains 9 months of the year; a hidden but growing homeless population amidst a false sea of wealth; and a inferiority complex, as the area was the “poor man’s West Vancouver” whose “wealthy” roots are traced to an industrial, blue collar population (which is still a good percentage of the population).

Quick, everybody migrate to the soon to be “The Best of the Best Place on Earth” so that Nostra can sell to a greater fool!

#80 MenWithHats on 07.13.09 at 4:09 pm

http://www.synergenconsulting.com/cost-estimating.html

Cost estimate .

#81 dd on 07.13.09 at 4:11 pm

#72 Dawn in Calgary

…We’re going to continue renting indefinitely. We’re paying $1,600 for a place that to buy would be at least $2,400 and banking the difference…

Same here. Living downtown for same for a 2 bed and 2 bath. The place is around $350-400K … what ever!

#82 timbo on 07.13.09 at 5:00 pm

#69 Grump,

great link, never thought it was hitting out there as bad as that shows.

As to the house, Stigma, water damage and smoke ,in that order. One thing to sell a house in a recession but another with an ugly history. Water damage would come to mind if I was there. Squeaky floors and mold. Better bud if it became a tear down to sub -floor on 1st floor and then build, unless basement was developed then just rip everything and bring your own creation to life.

#83 Chris L. on 07.13.09 at 5:08 pm

Update: 12 offers early this am and now 14 offers at closing, I’m not sure if that’s the final call or not but this is what I’ve heard. Let see what shakes out overnight. I presume the bank is closed right now and will pore over the offers sometime tomorrow. Seems like a nice group of greater fools (and one I predicted)…. now if I succeed the tale will only be told if I can get in under the wire I’ve set for myself.

#84 timbo on 07.13.09 at 5:11 pm

Renting now is a great way to keep the budget straight. In Calgary rental prices are trying to increase but the norm for housing is $1600-$1900.00 per month. Easy math to keep you savings.

Example
http://calgary.kijiji.ca/c-housing-house-rental-Beautiful-copperfield-home-for-rent-or-rent-to-own-W0QQAdIdZ141599898

New housing $300-$400k is moving now but $500k has fallen flat. For a good idea on out of town check out Langdon by the golf course. Housing died last year and still is very slow with some construction being started over the last 2 months.

I figure this winter will be just as quiet as last.

#85 Dave on 07.13.09 at 5:23 pm

People like this prevent the housing market from correcting….. think about it for a moment. They are willing to pay more than asking for a house that is destoyed…. warped thinking in today’s economy.

———————————————-

nah, they actually make the drop much more dramatic. More morons are required to cause a bigger collapse which will result in more fear and panic selling at all costs.

Buy the place guys, it’s a gold mine. Hopefully you don’t have young children

#86 eddy on 07.13.09 at 5:33 pm

walk from multiple offers. don’t seek real estate advice, regarding offering price over the internet form people who have not seen the house. if you insist on offering, don’t be influenced by the multiple offers, most of the others will be crap, just like the house, no one falls in love with or Has to have a piece of crap

#87 Dan in Victoria on 07.13.09 at 5:35 pm

So whats the outcome?Did Burn Brothers Construction get it?

#88 eddy on 07.13.09 at 5:39 pm

one more tip for the guy from Guelph. Remember, you’re Just buying yourself a job, nothing more.

#89 Kevin L on 07.13.09 at 6:22 pm

SOLD $151k I guess I don’t get to fix it.

#90 catamaran guy on 07.13.09 at 6:22 pm

OH yeah sunless North Van…I always used to laugh when while sitting in the sun in Richmond,I could look north and see just cloud over the North shore.

I’d think,who the hell would want to live up there?

#91 Nostradamus jr. on 07.13.09 at 6:42 pm

China continues w/ its building boom!

…What else can they do?

They can’t allow it to stop…so the govt banks keep lending $$$.

1/
They’re stocked to the rafters w/ copper, steel and commodities.

2/
If they did slow or stop the building boom, suddenly 200 million chinese citizens would be unemployed.

It is not going to end well in China…mark my words.

79 Homeless in the North Shore

#92 Nostradamus jr. on 07.13.09 at 6:43 pm

China continues w/ its building boom!

…What else can they do?

They can’t allow it to stop…so the govt banks keep lending $$$.

1/
They’re stocked to the rafters w/ copper, steel and commodities.

2/
If they did slow or stop the building boom, suddenly 200 million chinese citizens would be unemployed.

It is not going to end well in China…mark my words.

…#79 Homeless in the North Shore…

You have no credibility my friend.

Who is gonna believe anything from a poster who lives in tent, a cave or a shelter?

#93 Nostradamus jr. on 07.13.09 at 6:46 pm

…#79 Homeless in the North Shore…

You have no credibility mon ami.

…Maybe we will listen only after you get a job and move out of your tent.

#94 Sail1 on 07.13.09 at 6:54 pm

#25 Munch

Perceptions!

That’s the problem, and the reason why real estate still has a long, long way to go – down!

Wishful thinking, how many years have you been waiting?

http://www.yourhome.ca/homes/article/665245

#95 MenWithHats on 07.13.09 at 7:04 pm

#83 Chris L. on 07.13.09 at 5:08 pm
Yawn . Who cares ?

#96 Repatriated Expat on 07.13.09 at 7:24 pm

Just a couple of simple observations.

Dinner on a Saturday night in my neighborhood at any restaurant used to require a 30 minute wait. As a result I generally stopped eating out but last weekend we went out for dinner and the restaurant was less than 10% full. It was actually quite eerie, I wonder how long they can keep it up.

On another note, a 20-ish coworker mentioned that she wouldn’t be in on Friday because she had a meeting at the bank. I jokingly asked if she was refinancing the mortgage. It turns out that the family needed a new car, and the couple was concerned for their jobs. They thought it was more prudent to add debt through mortgage refi rather than get a car loan.

All this can’t end well.

#97 Chris L. on 07.13.09 at 7:28 pm

quote: If there was a profit to be made on this house someone in the biz (contractor, banker, real estate agent, etc., etc.) would have already done the work and turned the profit. The fact that it’s been sitting there so long and no one who is smarter or faster than you has picked it up yet is a sure sign that this deal is a dog.

The house was sitting because it was probably torched and the insurance wouldn’t cover the repairs (obviously). It’s been a year in legals. Now how’s that for stigma! Off to find another deal! By the way, someone has to do it, else it wont get done, if you wait for someone else to do it, you never profit, you’re always on the sidelines. I’ve watched thousands and thousands of homes go up for sale, none were right to profit, or they all were, depending on how you look at things. Guelph is very tight and there are very few renos or fixer-uppers. So now we wait to see what shakes out.

#98 Homeless in the North Shore on 07.13.09 at 7:32 pm

Notra – #90-92

I believe posting essentially the same message 3 times not only erodes your credibility, but more importantly demonstrates that a nerve was hit! Lol…

It is easy to promote a grandiose image of the North Shore to faceless bloggers 3000 km away, but when confronted by counter perceptions and/or facts, you go on a diversionary tangent and pump China instead.

How classically Vancouver – denial in the face of alternative perceptions and facts….don’t change a bit! :)

PS – The avatar was a reference to the homeless situation in the North Shore. Sorry mate, but I am gainfully employed in a near recession proof position, and I am simply sitting back on my six figure war chest, watching the Vancouver RE drama unfold. Yes, one of the lucky and fortunate ones out here…

#99 jess on 07.13.09 at 7:46 pm

good eye opener on income vs. housing

http://www.youtube.com/watch?v=nSH9KEF8Rso&eurl=http%3A%2F%2Fzerohedge%2Eblogspot%2Ecom%2F2009%2F07%2Fhousing%2Dtunes%2Dacme%2Dcheap%2Dcredit%2Dvs%2Dwile%2Ehtml&feature=player_embedded

#100 Dan in Victoria on 07.13.09 at 8:39 pm

Post#96 Hey Chris were the floor joists and floor sheathing burnt through or just the front of the house?What’s a building lot worth there?Just trying to run that 151,000 through my head.Thanks in advance.

#101 joel brico on 07.13.09 at 9:15 pm

#84 Timbo

You are right on. Also, you don’t have to live way out there in the burbs and fight traffic.
I have a great inner city house rented 10 min to downtown Calgary. I get an extra two hours a day because my commute to work is so short. I factor that in in the rent vs buy equation.
The great thing about Calgary is that people get transferred and you get to rent a real nice place for cheap. The owner in the house we rent has been transferred to England with Nexen for 5 years and we rent his house worth $800,000 for $1800 a month. The last best had a full city view and worth $1.2 million (2006) for $1500.00 a month

If you credit score is 816 and you have a nice amount or cash in the bank (from our 2005 RE sale) with solid references you get a super place and a long term lease.

#102 D from London, ON on 07.13.09 at 10:17 pm

# 97 – Chris L.

I understand when you say “someone has to do it”. Obviously many think they can, with so many offers. I would be interested in seeing an update in 6 months to see if this house makes it to market, and if so, what it finally sells for (according to the blog dogs, that ought to be more than 6 months out…).

I am sorry that you don”t have the work that this would generate though. I understand that Guelph is tight. Maybe you have to cast your net a little further, like maybe Cambridge or Kitchener?

#103 Chris L. on 07.13.09 at 10:23 pm

“Post#96 Hey Chris were the floor joists and floor sheathing burnt through or just the front of the house?What’s a building lot worth there?Just trying to run that 151,000 through my head.Thanks in advance.”

The fire was focused in the main room at the front. View the link to the video to see it best. The roof was sort of intact and most of the trusses were okay, but I’d say 25-50% would need replacing from char and smoke damage. The floor was plywood replaced in the front room. There was smoke damage and soot on all the upstairs walls so would need to be taken back to studs and even some replaced. The bank allowed showings and was not condemned meaning it was structurally sound. The mainfloor was basically unscathed and the kitchen was fine as was the tile floor and hardwood. The house basically had no windows to speak off, smashed to put out the fire. The basement was a mold zone, wet, still from a year ago so I imagine it would be a complete gut and redo. It did have a basement walkout and apartment that would be okay after restuding and re-drywall. The electrical needed redoing on the upper level only for the most part. Might be some hidden stuff here and there and plenty of demo and no shortage of work. If you knew us, this job was in our scope. We’ve done it all. Maybe Garth can hire us for his next POS. I’ll be sure to put the bolts to him with a dandy quote :)

Lots go from 75k-125k in Guelph, but you can’t really get a lot except through a builder. Say this one was worth 100k and foundation 10k, 25k for existing structure, 5k for the kitchen, 5k for mainfloor flooring, etc. you get at 150k in value fairly quickly. I don’t see it that way, but the buyer obviously did. He also doesn’t read this blog either because he’s focused on 280k as his target value. Most people here see values coming down. I fully expect to see avg. houses in Guelph coming to 260k so for the hassle this wasn’t worth it. If you take on this much risk, you need to have the rewards. The buyer will be okay as Garth said, but he’ll make hardly any money to speak of and if he screws up or hires one person, will go bust. I watched the termite house owner do the same thing. 200k in to start from 125k and he’s hasn’t finished the front porch. I guess he gave up.

#104 Future Expatriate on 07.13.09 at 11:45 pm

#35 – Monitoring the media-blackout story that will cause total collapse of all financial markets… where else?

FRONT-RUNNING GOLDMAN SACHS DISASTER

Where else would goldbugs be? Bugs go to the light. Not all get burned.

#105 Chris no longer in England on 07.14.09 at 1:05 pm

Nostradamus Jr. “The North Shore is the Paradise of Canada.”

Doesn’t every lake in Canada look like this? It does to me!

#106 Chris no longer in England on 07.14.09 at 1:24 pm

And before you start predicting that I am an idiot that doesn’t know the difference between lakes and seas … it’s all water.

#107 Chris no longer in England on 07.14.09 at 1:29 pm

Recession receding?? http://news.bbc.co.uk/2/hi/business/8149762.stm

You heard it here first!

#108 Dan in Victoria on 07.14.09 at 2:35 pm

Post#103 Chris, Thanks for that update, pretty much what I thought when I first saw the pictures.Don’t be too hard on Garth he may have saved your ass.I always figure let the idiots do stuff for nothing, keeps them entertained and out of the way, so I can make a better living doing profitable work.That whole story from the beginining to the end was very interesting,and I had more than a chuckle or two reading what some people had to say,very obvious in some cases they had never swung a hammer or used a saw.

#109 Jon Boyd Ann Arbor guy on 07.21.09 at 11:35 pm

I’m with Garth. That is too risky with too little return.

What if one of the team gets sick?

Stigmatized?

Negative market changes?

I’d sure pass.