Cut it out

On the same day a new bank survey finds half of people have absolutely no savings, Jessica wrote me. She doesn’t, either. In fact the newly-minted, soon-to-be-married, renting dentist has $120,000 in debt. But she does own two houses.

Ever wonder what happens when you mix cheap credit, slaphappy bankers, investment ignorance and HGTV-inspired house lust? Yup. Amateur landlords. And risk. Oh, so much risk.

My fiancee and I (we are both 28 years old) moved from Winnipeg only several months ago where we currently own and rent out two homes.  One was purchased for $300 000 only last year and the other for $130 000 three years ago.  We make about $150/month from the 300G home and $315/month from the 130G home.  We were flip flopping between selling or renting before moving to Vancouver and because of our hope that the properties would appreciate in value, we kept them to rent out.

I am a newly graduated dentist wracked with $120 000 worth of debt on my credit line.  I made 130K last year in Winnipeg but my income is not quite the same here in Vancouver.  It is difficult to tell just yet how much my annual income will be here but I am hoping to have made 90-100K by the end of this year.  My fiancee is self employed, having just started his own stucco company here.  Work is good so far but he is far from feeling secure, especially knowing about this impending recession.

We have no savings.  We are currently renting here in Vancouver, paying about $1645 a month.   We have no children but hope to have a family and a home here in Vancouver in about 4 years.

Our question is, should we try to sell our Winnipeg homes to cut losses?  One of my concerns is that we only started renting to a family in March (the 300k home) and they have signed a 1 year lease.  We would feel terrible selling the home when we had initially told them we were interested in renting it out long term, and they have young children. I would love to be told that we could keep these homes and continue to rent them out and be okay but I am prepared to be told the opposite and chastised for making such poor financial decisions.  Anyways, what do you think?

By writing to this pathetic blog, Jess, most people already know they’ve lost it. Some look for sympathy, which is laughable. Others seek approval, which is completely hopeless. A few lost souls think they can atone for their financial sins, but end up being ridiculed. Still others are just morally confused. I like them best. Includes you.

Let’s do some math. You have $430,000 in equity and debt in two houses in dreary Winnipeg, making $465 a month in positive cash flow (until a toilet blows up). That’s a return of 1.2% on the total exposure, and it’s taxable. When you were earning $130,000, your marginal tax rate in Manitoba was 43.4%, which means your actual after-tax yield on this rental income was 0.56%. Inflation is 2.6%, and bank preferred shares pay 5.2% with half the tax. Strike one.

Now you’re in Vancouver, where your income has plunged by 30% and BF the Stucco Guy is self-employed and feeling insecure. No wonder. The real estate market is toppling, at the same time he’s trying to break into the construction business. Smart. You have no savings, a relatively staggering amount of personal, non-deductible debt on a floating-rate line of credit, and it sounds like you are getting urges to have kids. (BTW, why doesn’t he marry you?) This is not the profile of someone who can afford to carry around two non-performing real estate assets. Strike two.

Finally, look around you. Real estate throughout BC is croaking, just as predicted and pretty much on schedule. Price gains exceeded income growth, creating the most indebted society in the nation. The savings rate is negative and debt-service costs are double the Canadian average. The local economy lost 15,000 jobs last month and the NDP’s about to win. All that’s missing are locusts.

Do you think Winnipeg is immune from this? Prices there have also soared in the past decade while wages have not. If it were not for a tight rental market, the cracks would now be fissures. But the Peg is not immune from all those changes manifested by F & the peckerettes, which I detailed here in the last boring post. So what happens if the prairies see a relatively modest 15% decline in valuations? I’m sure that whatever equity you might have would be wiped out. Or, if you own the properties outright, you’d be $65,000 poorer – enough to pay off half your loan. Strike three.

Worse, you have a conscience. A moral compass. Ethics.

These are the most useless attributes possible for landlords. They cloud rational judgment. They make you think of stuff other than cap rates and overhead – like social responsibility and compassion. Man, start going down the road, Jessica, and you’re finished. Families. Babies. Puppies. What the hell’s the matter with you?

Get out, Jess. The sooner you can turn into a materialistic, blasé, valueless, vacuous, West Coast babe, the better.

Lease a Lexus. It really helps.

193 comments ↓

#1 TurnerNation on 08.13.12 at 9:50 pm

A custom meme for this weblog.

Meet Anthony. Aka Tony the flipper.

Sum total of his knowledge:

http://qkme.me/3qgumd

#2 Nodebt on 08.13.12 at 9:51 pm

Garth Rocks! First!!!!!

#3 Smoking Man on 08.13.12 at 9:55 pm

CERN and it’s effects on The Toronto Condo Market

Acronyms
PhD’s = Paddle heads
RS = Rocket Scientist
ASS = Atom Smasher
BS = Dark Energy

The ASS smasher machine in CERN. Staffed with the most brilliant Paddle Head minds the educational industrial complex has created, computing power second to NSA 1.2 billion Utah data center currently being built the new supercomputing center to spy on everyone. That’s why I developed http://www.keysme.org for free. I hate the machine, how is this for a wrench in the gear box.

The RS were dumb founded few months ago when a little partial they shot appeared to be faster than light. Perhaps it wasn’t faster than light but the speed of light slowed down due to universal shrinkage, less mass means speed of light is slower, Mc2 smaller, and E is greater.

The RS uniformly believe that galaxies are being pushed away from each other, and in some cases at the speed of light. Did any one of these dudes ever consider how much a fking planet actually weighs. And the amount of energy it would take to even move it one billionth of a cm off an orbit. Now let’s factor in the sun, the planets in our solar system, hell let’s do the entire milky way. Lets move it 1 Trillionth, billionth of a cm. We all pushing yet.

The Paddle Heads explanation is there is this invisible stuff we can’t see, that comes from nowhere they call it: Dark Energy. I Call it BS (Dark Energy really means “I need more funding from tax farm slaves.”) E=mc2 or Mc2=E same thing.

Universal Shrinkage For the rocket scientist
formula here: http://dyslexicsmokingman.blogspot.ca/

Now the Nuke Bomb proves we can convert Mass to Energy, A nuke uses highly enriched fuel fast ass electrons that react quickly so, boom, light, then mushroom cloud , the shows over.
And we know that the big bang created mass out of energy. How did the energy of all the mass in the universe start off as the size of an atom? Come on PHD’s did that thought ever make it into your coconut. Or is it just something you expect cause you read in a text book.

Bubble Heads what do you think is more probable?

A: An Invisible nothing we can’t see that no one knows how it’s created, while pushing galaxies that are heavy as shit away from each other at the speed of light.. Ba hahahahahaha is all I have to say.

B: Like the A bomb but much slower, regular mass is slowly being converted to energy naturally. This energy is being sucked into the black hole within each universe’s centre, mass is shrinking , the observer looking at the nearest galaxies thinks it moving away when in fact it’s shrinking. The further out the faster it appears to be moving away. Scale effect.An optical illusion of epic proportions. And as this happens the density of the black hole increases, the black holes in each galaxy are slowly being attracted to each other. Until one day way off into the future with no mass left to suck, all the black holes attracted to each other via increasing gravity collide and eat each other till there is only one, their can be only one,(Highlander) which condenses smaller and smaller down to the size of an atom, then just as its about to become nothing, BA BOOM, BIG BANG number 278903838.

Kind of like condo market, Expansion, Contraction Expansion, Contraction.
I know one thing for sure much better chance of B than A

Dark Energy, Please

#4 Tim on 08.13.12 at 9:57 pm

to turn into a west coast babe, she’d have to be miserable and scowl every time a guy would look at herl and then complain that men never approach her

#5 Sockeyemoon on 08.13.12 at 9:58 pm

Go North!

#6 Suede on 08.13.12 at 9:59 pm

West coast babes!

Don’t forget to get a lot of Lululemon gear in the closet and join several Hot Yoga classes. Brag to your friends how you went to Kits Beach and hit up Cactus Club for drinks after on a weekly basis.

You’ll fit right in.

There’s a reason the Real Housewives show decided on Vancouver and not the Centre of the Universe – and it’s not because of BC’s Carbon Tax to help ease global warming makes them look good to small social movements.

#7 Scott on 08.13.12 at 10:01 pm

first

#8 Prepmonkey on 08.13.12 at 10:01 pm

They are thinking of evicting a family with small kids. Just heard of a local story of a realtor needing to sell a rental same situation. Awesome… People who were wreckles get to force families to move. It might get difficult for speakers to rent out their flips if this continues…

#9 Scott on 08.13.12 at 10:02 pm

What are the rules concerning signing a tenant to a 1 year lease and then selling a house?

#10 Bananarama on 08.13.12 at 10:03 pm

So much debt, so little brains.
Pulling teeth is easier than crunching numbers. Who knew…

#11 JRH on 08.13.12 at 10:05 pm

BOO !!

#12 The Man in Toronto on 08.13.12 at 10:06 pm

Really? I have a sore tooth……..and am going to pull it myself now.

#13 Larry on 08.13.12 at 10:07 pm

In early for brother Rawd.

Garth, interested for your article on preferred shares when that’s ready to be posted. I’m also interested to read more on the projection of financial assets to increase in value while other assets (such as RE) decrease in value – I think I read this correctly on a previous entry.

Do you think the big six banks are poised to make larger profits once interest rates start to rise? As a long term hold (including the reinvestment of dividends, even in DRIP) do you think common stock will provide strong returns? The value of preferred shares will drop once interest rates start to rise so going the pref route, one should be aware of interest rates and set a time limit for themselves, no?

#14 Can it be? on 08.13.12 at 10:08 pm

Omg tonight’s post is hilarious! I could have written this story for a number of people I know. It really is the same everywhere in Canada.

#15 Little_bit_bent on 08.13.12 at 10:08 pm

I actually have tears (of laughter) rolling down my face! Best skewering ever!

#16 V on 08.13.12 at 10:08 pm

Maybe?

#17 TRT on 08.13.12 at 10:09 pm

Was just on Realtor.ca … In the Surrey area of king george/88 ave, prices over the last year or so have gone up by $75,000 dollars on a typical home ($550,000 last year). These are asking prices and not sold.

What gives? Is this a local phenomena? As all south asians want to build that huge mega-home to house all the extended family??

#18 Sebee on 08.13.12 at 10:10 pm

Garth,

You’re like a Real Estate Priest – taking sinner’s confessions out of good will. I fear the public scolding is not enough. We must come up with a version of the Virgin Real Estate Mary. After the letters you can tell them how many times they have to say it to be absolved of their Real Estate sins.

#19 TRT on 08.13.12 at 10:10 pm

Oh, Phaila!

#20 Dan in Victoria on 08.13.12 at 10:11 pm

Sounds like a
Financial root canal
To me

#21 Devore on 08.13.12 at 10:11 pm

Lease a Lexus. It really helps.

Don’t forget the Lululemon to really fit in.

#22 Cash is King on 08.13.12 at 10:13 pm

Jessica,

The 3 worst traits to possess as a landlord are a conscience, moral compass and ethics. If you cannot sell the property out from under them, you will never be able to evict them. I can almost see your tears flowing for them as they tell you that they cannot pay the rent due to a layoff, car payment, casino loss or “food for the kids”.

Get out and leave the renting to professionals….and see a preacher.

#23 Sparky55 on 08.13.12 at 10:14 pm

Yesterday’s pic – apparently it is real! They had to move the sidewalk to make it remotely useable. See link to discussion below. They even have a Google map link showing the actual houses.

http://www.cyburbia.org/forums/showthread.php?25606-Maximum-residential-driveway-slope

#24 siddelly on 08.13.12 at 10:16 pm

Since moving to Japan and renting a local Kodan for a family of 4 for 600 CDN a month, I tend to feel sorry for Vancouverites who are paying $1645 a month in that crazy market. First of all, Jessica should be setting up her office in Point Grey where all the UBC training dentists are retiring, and have been pulling in $250,000 + per annum. There’s gold in that thar hill up on 10th street.
My Brother in Law had some trouble finding a good old world stucco guy recently as he is building his new million dollar dream home on Capital Hill, and so I am not too worried about hubby if he is any good. There will always be renovations for good tradespeople.

In Michael Lewis’ book “Panic”, it is pointed out that the tipping point comes when too many people, who don’t have any more skin in the game due to declining asset equity, walk away from their debts to leave someone else to pay(in Canada’s case CMHC-us) ala Jinge mail.

Those who forget the past are condemned to repeat it.

#25 BigBear on 08.13.12 at 10:16 pm

Telling it like it is, but will she listen? Nope! She and many others can’t handle the truth. We are doomed by the dumbed down.

#26 donald trump on 08.13.12 at 10:17 pm

donald trump is master here sorry garf!!!!!

#27 Bottoms_Up on 08.13.12 at 10:18 pm

#56 Sask Girl on 08.13.12 at 12:23 am
——————————————–
Let’s do some math.

Population of Regina approximately 200,000.

“They” say 15,000 homes/yr needed due to population growth.

How many people live in a home? Perhaps an average of slightly over 3?

So according to “them”, 50,000 people are moving to Regina every year?

Was the population of Regina 150,000 last year? Is it going to be 300,000 in 2014?

Methinks 15,000 new homes in Regina is overestimated by, perhaps, 100 fold?

#28 Mean Gene on 08.13.12 at 10:19 pm

A degree in dentistry is a ticket to travel the world and work just about anywhere!!!!! Soar like an eagle and forget the Vancouver turkeys.

#29 Bottoms_Up on 08.13.12 at 10:19 pm

#9 Scott on 08.13.12 at 10:02 pm
—————————————
In Ontario I believe you can sell the house, and the new owners are allowed to kick them out.

#30 Devore on 08.13.12 at 10:23 pm

#9 Scott

What are the rules concerning signing a tenant to a 1 year lease and then selling a house?

You sell the house with the tenants, unless they agree to leave.

#31 Suede on 08.13.12 at 10:24 pm

#9 Scott

check out: http://www.rto.gov.bc.ca/

#32 Julia on 08.13.12 at 10:27 pm

You couldn’t be more right. I was a landlord for 15 years and by far the most stressful times for me involved emotions related to the relationships i developed with my tenants, going out of my way to be fair and a good person. Donald Trump I will never be! So glad to have sold and rent now.

#33 John in Mtl on 08.13.12 at 10:29 pm

Nostradamus Le Mad Vlad on 08.13.12 (yesterday) wrote:

“Syd Barrett, the original founder showed up at the studio wanting to re-join the band when they recorded WYWH. He was completely bald, no eye-lashes, nothing but the band was enormously successful by then, and didn’t need him (he was more of a visual artist). Shine On was dedicated to him.”

You are right on all counts except one: According to M Rick Wright who saw him downstairs in the studio at Abbey Road on that fateful day, no one recognized Syd; “here was this weird acting, fatty, bald guy jumping up and down on a couch and brushing his teeth. He mumbled something, then just left. I mean, it was awful. And this had a great influence on us.” When they discovered it was Syd, everyone’s heart just sank. And it certainly had a great emotional impact on the recording session of that day – they were getting ready to record SOYCD. Talk about fate or invisible energy forces at work, they hadn’t seen or heard of Syd for years.

Yep, they don’t make good music like this any more. I miss Mr Wright immensely, knowing he and M. Gilmour wll never make music together again. They were a magical pair with no equal today.

John

#34 Dan from Richmond Hill on 08.13.12 at 10:30 pm

Jessica, ein mann ein wort!

#35 Nodebt on 08.13.12 at 10:30 pm

Hey gartho! You never mention kamloops? Is that a good thing? How much do u figure houses prices will drop in kamloops? Thanks buddy!

Why? — Garth

#36 Soylent Green is People on 08.13.12 at 10:33 pm

Ditch the stucco contractor stat

You can do way better trade up much higher

.
.
.

#37 Foggy on 08.13.12 at 10:37 pm

At 23 Sparky:

Yes the picture is real, as that’s how it was FIRST constructed. Then sense prevailed and the driveways were extended much farther out front, thus lowering the slope. The homes are in Fayatteville, Arkansas.

#38 acp on 08.13.12 at 10:37 pm

#17 TRT – Dude, 88th and the George is PRIME RE! It’s the intersection at Bear Creek Park. And there’s, like, a gas station on the corner. You can get chips! And a convenience store at 140th. It doesn’t get better than that. It’s soooo central to the Patullo Bridge, the Alex Fraser, The Wheelhouse, the SkyTrain. EVERYONE wants to live at 88th and the George! It’s THE BEST PLACE ON EARTH!

#39 martin on 08.13.12 at 10:39 pm

lease a lexus?!?!

A Benz better

#40 Mark W on 08.13.12 at 10:39 pm

“dreary Winnipeg” …. ouch!

:-(

#41 Ethical_Ethel on 08.13.12 at 10:42 pm

Me, too! Me, too! I got ethics, too!!

I feel sooo terrible for our landlord, whom got stuck with a huge expense from this year’s rain. Insurance doesn’t cover water seepage and she (single Mom) is out $2400 just from the clean up… We are confident the total will be well over 10 grand as there is a significant drainage prob on this fairly new house.

Sometimes it’s more than toilets and how does one uphold the landlord/tenant legal contract from a distance? More specifically, the maintenance?

I agree – leave landlording to professionals. And, as any professional knows; a lease contract is bound by law – sell or don’t sell – the lease will be upheld.

#42 Inglorious Investor on 08.13.12 at 10:58 pm

#3 Smoking Man on 08.13.12 at 9:55 pm

I haven’t kept on this subject for a while, but the idea of a recycled universe is a natural extrapolation of the Big Bang/Big Crunch theory. To my mind it has a certain cyclical, poetic elegance that’s in tune with nature. Dark Energy comes along and says (I think) the universe will end in an empty, deep freeze due to accelerating expansion. Entropy forever. I totally agree that any “fill in the gap” concept must, by definition, be regarded with suspicion. My thinking on dark matter is that maybe it doesn’t really exist. Maybe the problem is we simply don’t fully understand gravity. As for the weight of planets, stars and other stuff, it is dangerous to measure these on a “human” scale. Remember, it’s all relative. Or maybe the Higgs will change all that? Some ambitious minds are already gleefully rubbing their hands together as they salivate over concepts of warp drive. But the real question is: would Captain Picard by a SFH in North York today?

#43 Frank on 08.13.12 at 11:04 pm

Hey Garth, You never mention Peterborough? Is that a bad thing?

#44 TimV on 08.13.12 at 11:04 pm

I guess staying in Winnipeg is too cold a calculus.

#45 Grim Reaper/Crypt Speculator on 08.13.12 at 11:05 pm

Smoking Man:

I can’t understand you when you try to be coherent….shape-shift back to your old form/format.

#46 disciple on 08.13.12 at 11:06 pm

Gartholomew, that was mean of you… for subjecting the rest of us to yet another head-in-the-clouds “professional”.

And now for something completely different… and this time that phrase has a double meaning… John Cleese of Monty Python plays Mariano Rajoy, PM of Spain…

#47 randman on 08.13.12 at 11:08 pm

Overheard in Whistler

A realtor on the phone to a friend….
asking him to put a deposit down on a couple lots..
So as to give impression they were selling..
Promised his friend his deposits back no problem…

Disgusting!

Randman out

#48 disciple on 08.13.12 at 11:13 pm

Wait, Nostra, I just read your post from earlier today, and you say that Floyd bankrolled Monty Python? Considering the revelation on Cleese today, you have forced me to look into that and I may not like what I find…

#49 disciple on 08.13.12 at 11:15 pm

#29…. Bottoms… Not if there is a written contract. Even if it is month to month, at least two months notice are required… You’re probably not a renter like me so you wouldn’t know…

#50 Grim Reaper/Crypt Speculator on 08.13.12 at 11:16 pm

Dentistry?

I remember a time when Barbers combined their quasi -PhD skill with” mastication – based” enamel.

WTF happened?

Dentists focus on an amalgam of various “TOP 32” calcium deposits between the lips and the uvulva.

MD’s spend about the same amount of time in school learning abou the other 99% of the human body….learning about enemas…fart jokes….STD’s…Trophy wife plastic surgery….which Wizard of Oz character does Smoking Man resemble the most….y’know…..Nobel Prize eligible stuff.

I think we should have an Occupy your Mouth Movement, and take back control of our orifices !

#51 Inglorious Investor on 08.13.12 at 11:19 pm

No one should own more RE than they can handle, either physically or financially.

HOWEVER…
The basic calculations used to measure the relative ROR on RE do not factor in inflation. During normal economic times, a typical rate of inflation is beneficial to the property owner with a mortgage. Inflation reduces the real value of your mortgage over time, while your property increases in value (usually).

During periods of very high inflation, the effect is magnified. In fact, as long as a property owner can manage to hold on and make it through the turmoil, a short period of hyperinflation is the property owner’s best friend. Your mortgage will cost you zilch and your property will retain it’s real value (barring disasters, such as war).

Given the current knife’s edge instability in the system today, it’s not a bad idea to have a good chunk of your wealth in real stuff. Because the denominator may change, but the real value will remain, whether it’s measured in dollars, euros, ameros, or goats.

#52 Nodebt on 08.13.12 at 11:19 pm

Hey gartho! Why? You mention house prices declining in other places of bc, and kelowna is only 2 hours away, just wondering if I should sell my brand new McMansion I just built, it’s worth roughly 800k in this market, I’m 38 and it’s paid for. Then again it’s paid for and if it does go down to 500k my net worth will go down but I’m only 38, and Overtime it will most likely go up, so what do u figure buddy? Thanks

#53 T.C. on 08.13.12 at 11:21 pm

These are the worst kind of dentists to deal with because it’s just “drill, baby drill” as they loot your blue cross to pay their debts.

I had someone like this who talked me into a root canal and a crown. She had a large real estate debt to pay off.

A decade later – after 40 days of antibiotics and a CT scan of my sinus, I discovered that she had only done three of the four roots. In the meantime the nieghboring tooth had been infected (root canal and later apicoectomy) and the orginal root canal had developed a cyst bursting through to my sinuses. The endodontist and another dentist that I went to see for help were useless – a lot of hand waving, bleats of reassurance and inability to track down the problem, although they were happy to charge $200 for X-rays on ancient equipment that showed nothing (I imagine they too had real estate debts to pay).

In desperation I went to see a clinic doctor (retired, no debts, house paid for) who set me up for a CT scan and who recomended a (American trained) dentist. On my first visit it became obviouse this dentist practised dentistry as a profession instead of as a money generator. He had also re-invested his money into his business (instead of real estate), and featured some state-of-the art imaging equipment. He had the problem tracked down pretty quickly and the CT scan confirmed the diagnosis. He charged me $1 for half-a-dozen Xrays.

Now, after three root-canal proceedures, one crown, subsequent loss of two teeth, an implant, another crown and damage to my sinuses that will never quite be the same, I figure I will have lost about $7,000 in dental payments on top of the blue cross. Probably covered one mortgage payment each for the dentist and endontist who screwed everything up in the first place.

Number one rule for dentists / endodontists: get them talking about their investments. If that’s all their interested in, go find someone else because they don’t give a rat’s ass about you as a patient. The only thing they are interested in is money. Find someone who likes to talk about dentistry – passionately. Because they care about doing a good job. The money is seconaday to good work.

Sorry – that just kind of burst out… but the real estate angle is key.

This is not a tooth blog. — Garth

#54 T.C. on 08.13.12 at 11:23 pm

“seconaday” = secondary

#55 Not 1st on 08.13.12 at 11:25 pm

Garth, you didn’t get the vancouver lifestyle quite right.

First its live at home with your parents until 35, get a lame job waiting tables or tending bar, take p/t university classes forever, keep a little weed on hand to smoke at all public events and then rent out a lexus and drive around downtown on the weekends like a douchbag.

#56 Snowboid on 08.13.12 at 11:33 pm

Siberia attacking the Okanagan…

With the tourist season winding down (only every second plate is from Alberta), and the RE market BS at full-swing on the local city forum
http://tinyurl.com/RE-Bear-Kelowna

all we needed now was some smoke to go with the mirrors.

Apparently an arrangement was made by OMREB to import Russian smoke to hide all the reduced stickers posted on local RE signs.

Air quality is expected to improve from deadly to barely liveable tomorrow.

Welcome to the Smokynagan!

#57 Inglorious Investor on 08.13.12 at 11:34 pm

#24 siddelly on 08.13.12 at 10:16 pm

“[…] the tipping point comes when too many people, who don’t have any more skin in the game due to declining asset equity, walk away from their debts […]”

I predict that intentional, personal bankruptcy will become part of the typical financial plan of large numbers of young people.

#58 Honus Wagner on 08.13.12 at 11:41 pm

Dentist with stucco guy? While I do respect the trades, I’m not sure how that’s going to work out for you over the long haul. What do I know though, maybe he’s a stud in the sack.
Ditch the houses, get on with life on the left coast. Rent, be merry, pray for housing price declines, and maybe one day soon bambino/bambina time will come.

Are you twelve? — Garth

#59 Elmer on 08.13.12 at 11:48 pm

I drive a manual. Real men shift their own gears.

#60 the Phantom on 08.13.12 at 11:50 pm

Evening All (hi Garth):

VERY interesting post today. When I read this person’s situation, I have to shake my head. I believe in the long run, this woman will do well because a DDS or DMD is more or less one of those degrees that equate to printing money (although less so perhaps than 25 years ago).

In the short run however, I have to wonder how someone with the intellect, the aptitude and the perseverance to become a dentist could find themselves in such a state. Smoking Man…you may be correct about more items than some give you credit for. If we ever meet, the first big Gagger is on me!!!

I disagree though with the one who said “trade up” in terms of the husband dept. Granted this relationship is an unusual one inasmuch as she has the job with the prestige, the high income potential and the security. More often than not, it is the men who hold such degrees when their spouse does not, or if she does have a degree, it is a one that commands less prestige and income potential (I am not implying here that I endorse this, I am merely stating a fact). It is not entirely common for a woman with a professional designation to align themselves with someone who works with his hands and labours for a living but this too, has become more prevalent during the last two decades.

In any event, I would discourage her from trading up. I WOULD suggest that she consider supporting him while he upgrades his skills to become more employable in a field where there is more security; but that’s just me.
I have been married almost 25 years to the same woman and while I can say that I have made MANY errors and mistakes in my life, deciding to propose to my wife was certainly not one of them. I believe that I kinda won the lottery when she acquiesced to marry me. People told us when we were going out that we were “the perfect match” and I was always quick to remind them that it was a better match for me than it was for her. There were a few times I confess when I considered walking away…I decided to stop and look at what it was that caused me to fall in love with her when we first got to know one another. With these rocky times behind me, I can categorically state that I am SO glad I made loving her a matter of the will instead of an emotion when the emotion was fading.

So here’s to perseverance and fidelity; choosing to love when it is more of the matter of the will and not an emotion (tough times will pass with dialogue and compromise) and resisting the temptation to “trade up” when the one you chose to love loses some of that initial gleam and the relationship becomes a little less lyrical. Patience and some work will replace those attributes with stability and deeper connection than many would have thought impossible in the early stages of the romance.

Jeez and Valentine’s Day is still fully 6 months away!!!

the Phantom

Tissue? — Garth

#61 Honus Wagner on 08.13.12 at 11:54 pm

@#41, re: uploading the lease, that depends. In Ontario at least, if an owner wishes to occupy the dwelling, he can send notice (minimum 60 days) of intent to occupy. He can do the same on behalf of the purchaser if he sells the property. This is allowed even in the midst of a lease.

49. (1) A landlord of a residential complex that contains no more than three residential units who has entered into an agreement of purchase and sale of the residential complex may, on behalf of the purchaser, give the tenant of a unit in the residential complex a notice terminating the tenancy, if the purchaser in good faith requires possession of the residential complex or the unit for the purpose of residential occupation by,

(a) the purchaser;
(b) the purchaser’s spouse;
(c) a child or parent of the purchaser or the purchaser’s spouse; or
(d) a person who provides or will provide care services to the purchaser

#62 squidly77 on 08.14.12 at 12:00 am

Remember…. Jim_s, is this guy dangerous. Can’t wait to watch you lie in court. The verdict will be swift after the judge reads that.

#63 Djb on 08.14.12 at 12:00 am

Garth, when you finally arrive in Vancouver take a moment to realize that only HAM’ s drive a Lexus. If you really want to be the hot babe in Vancouver you have to have a Range Rover.. get with it will ya!

#64 Patiently Waiting on 08.14.12 at 12:05 am

17 TRT

You need to read my posts from the last blog where I left links to well over 150 homes in the White Rock / South Surrey area that have already ready had price reductions – most over $100,000. The link below also shows homes in the same hood that all have 2 (or more) mortgages on title . . . no White Rock is not different as we will see in the near future who has been swimming without shorts on . . .

http://mlslink.mlxchange.com/DotNet/Pub/EmailView.aspx?r=858626959&s=BRC&t=BRC

#65 Djb on 08.14.12 at 12:07 am

#52 Nodebt

Please stop reading this blog, obviously you are not getting the message and are effectively wasting an hour of you day by being here..

You mention house prices declining in other places of bc, and kelowna is only 2 hours away, just wondering if I should sell my brand new McMansion I just built, it’s worth roughly 800k in this market, I’m 38 and it’s paid for. Then again it’s paid for and if it does go down to 500k my net worth will go down but I’m only 38, and Overtime it will most likely go up.

You are willing to watch 38% of you equity disappear only to hope it returns one magical day?

There are RIM shareholders at $50.00 saying the samething as you.

#66 Devore on 08.14.12 at 12:13 am

#59 Honus Wagner

@#41, re: uploading the lease, that depends. In Ontario at least, if an owner wishes to occupy the dwelling, he can send notice (minimum 60 days) of intent to occupy. He can do the same on behalf of the purchaser if he sells the property. This is allowed even in the midst of a lease.

Keep reading.

Period of notice

(3) The date for termination specified in a notice given under subsection (1) or (2) shall be at least 60 days after the notice is given and shall be the day a period of the tenancy ends or, where the tenancy is for a fixed term, the end of the term. 2006, c. 17, s. 49 (3).

Also,

Period of notice, tenancy for fixed term

(4) A notice under section 47, 58 or 144 to terminate a tenancy for a fixed term shall be given at least 60 days before the expiration date specified in the tenancy agreement, to be effective on that expiration date. 2006, c. 17, s. 44 (4).

Know your rights, which you clearly do not. A lease is a contract with set terms, governed by the provincial Residential Tenancies Act. You don’t get to kick anyone out just because you happen to sell it or feel like living there.

Stop spreading misinformation.

#67 WalterlooResident on 08.14.12 at 12:17 am

She’s a dentist, and he’s got his own Stucco Company: Both are literally licenses to PRINT MONEY !

I would say go ahead and buy 4 more houses and rent them out, before you know it the both of you will be earning $500,000 each per year and living on cloud-9.

#68 Zerodown on 08.14.12 at 12:18 am

#53 TC The bar is set low, but that was a great comment. Thanks.

#69 Nodebt on 08.14.12 at 12:30 am

Djb, is ur name Garth? Thanks for answering for him but I think Garth’s man enough to answer himself, Garth I have never heard u mention kamloops before and where we’re situated in bc is a great place, I’ve never been unemployed in 20 years, and with the new mine opening and another one opening in the future and theres always a fair bit of building going on. Just wondered what u would say about kamloops! Djb since you know so much should I sell my commercial building also? It’s worth 600k and paid for to!

#70 Carpe Diem on 08.14.12 at 12:30 am

#3Smoking Man

so what the difference of this with PGP?

Carp

#71 Carpe Diem on 08.14.12 at 12:46 am

Ottawa … it’s the place to be if you want a family.

– Less crime & less grime.
– Plenty of water for Kayaking, Sailing, beaching or whatever.
– Ski hills 30 mins for quick fun or 2 hours to awesome hills.
– Moutain biking all over the place.
– Great public schools …
– Property prices stable (I think they will go down but not as much as TO or Vancouver)
– Folks here have more education and on average larger incomes than in Vancouver.

Vancouver sucks for family.

– Plenty of street crime.
– Schools sucks
– You can’t afford much more than a mortgage in Vancouver at your wage level.

#72 Grim Reaper/Crypt Speculator on 08.14.12 at 1:00 am

Whats wrong with you nimrods…

Dentistry and Stucco are complimentary professions

Check this out…..

http://www.youtube.com/watch?v=KJ-6TCPdbl0

#73 Davey Boy on 08.14.12 at 1:16 am

Check list for Jessica (this is Vancouver after all)

-license plate with ” best place on earth” emblazenedon it.
-spandex pants (no matter your weight class)
-Victoria Beckham facial expression.
-ski poles for walks around the seawall (haven’t figured that one out yet)
-anti-gravity boots
-retro touring bicycle
-small dog to put in basket of retro touring bicycle.

That’s a good start so you don’t feel too left out. I’m sure others from Vancouver can add nicely to this list.

#74 Nostradamus Le Mad Vlad on 08.14.12 at 1:17 am


“But she does own two houses. All that’s missing are locusts. Worse, you have a conscience. A moral compass. Ethics.”

Jess could offer to sell the house to the family renting at fair market value if they are interested. If so, one down. Sell the other ASAP, not so much for profit, but to loosen the millstone around your neck. Then stay liquid and rent.
*
#170 Smoking Man on 08.13.12 at 9:47 pm and #172 bill on 08.13.12 at 9:54 pm — Great memories. Saw them at BC Place in 1994 (sans Waters) on The Division Bell tour. Took about a week to get my hearing back! #33 John in Mtl — Thanks for the info. “I miss Mr Wright immensely, knowing he and M. Gilmour wll never make music together again.” — The last song on David Gilmour’s Live in Gdansk album was Echoes, done with a 40-piece classical orchestra. Apparently, Wright titled the song and penned the lyrics. Shortly after, he passed away, so it was a nice way to exit stage left. — Vlad. #48 disciple — Eric Idle is the musician in the Pythons, so he was the one who asked a friend in the industry if there was anyone who could help fund the film, and as far as I remember, the groups were Black Sabbath, Deep Purple, Led Zeppelin, Iron Maiden (?) and the Floyd. BTW, this is Monty’s cousin!

#56 Snowboid — “Siberia attacking the Okanagan…” — On CHBC-TV earlier, they said the smoke drifts all the way down into SoCal, so it appears the Russkies are trying to fumigate us!
*
John Mauldin Random acts of Europe; Germany Now is a good time for the Greeks to demand all those billions for WW2; Saving Can’t win for losing; Jamie Dimon Classy as always, and 10:14 clip Jon Corzine in the same boat; France So much for honeymoons; 5:31 clip Gary Shilling’s predictor; State Pensions someone’s cleaning up; EZone banks buying back debt; Auto Bailouts Cost more than expected, but it’s only money; Japan’s (anc China’s) economies slowing in tandem; The Carlyle Group dubya and cronies heading into China?

Comfort Zones Get outta them; Fort Mac. uncensored; UBS US$ reserve currency for next half century (unless something happens in between); Owelimpix Back to austerity and riots; Identity Theft Good point; Surprises for Retailers; Sears and JCPenney Not doing so well.
*
One Map shows world’s water shortages; Electric Car — the Tesla S Rocketcar Silence is golden; Iran ‘quakes HAARP involved? Beer is a great all-round breakfast cereal, for man and beast; Reverse GeoEngineering Don’t understand this, but it is a curious aspect; Paul Ryan “Key is gutting vital programs millions of Americans rely on. Ryan wants Medicare privatized as well as Medicaid, food stamps, and and other entitlement programs ended.” — That’s what the CPC is doing here as well; New Shipping Route Wouldn’t the US be better to concentrate on their own own problems? Great White attack Good pix, and Shark Week; X-51 Waverider Test flight Tuesday; Egyptian dark age; Super Soldier Genetically modified humans; Scientists playing God.

#75 Miller on 08.14.12 at 1:27 am

I love it ….stucco…. In the west coast rainforest…. The absolute worst envelope to put on a building there…. $120000 in debt…. And they moved to Vancouver to earn less money??? How did you get into dental school in the first place and graduate?????

#76 Bob on 08.14.12 at 1:36 am

I usually agree with Garth
But this one, we just don’t have enough information.

As a dental profession, I’m sure her income will be much higher than what she states. Further, they can incorporate, saving a load of taxes. He’s self employed… if they manage their finances, they’ll never have to pay marginal tax bracket until they retire.

The property has positive cash flow, so that’s good. I don’t know anything about Winnipeg real estate… but if we’re talking Vancouver 40% crash, then for that reason alone, sell. But if you’re thinking 10-15% over a couple of years and stagnate… why need to sell and lose out?

If the positive cash flow accounts for vacancy and property management (e.g. they’re paying someone), I say keep it. If not, SELL! (namely, because if you didn’t include this, your math sucks)

#77 An Cat Dubh on 08.14.12 at 1:39 am

to turn into a west coast babe, she’d have to be miserable and scowl every time a guy would look at herl and then complain that men never approach her

Same as in Kelowna. :). They are miserable me thinks because they are caught in a “keep up with the Jones” arms race.

The real estate news in Vernon BC is excited that home sales are up from last year. I’m sure alot of it has to do with lower and falling prices, plus many foreclosures.
Starting a stucco business in Vancouver is about as sensible these days as selling sand in the Sahara.

#78 My Head Hurts on 08.14.12 at 1:52 am

First!!!

#79 TaxHaven on 08.14.12 at 2:06 am

Funny… are the wheels falling off?

Didn’t these bank preferred shares pay @6% recently – and 7%+/- a year or so ago?

#80 Oceanside on 08.14.12 at 2:15 am

Four bedroom house on 5 acres in Qualicum Beach, BC , last year for sale for $1,250,000…Dropped to $988,000 and now on the market for $647,000 and no takers. 672 Hemsworth road…It’s different here……

#81 zoronqueen on 08.14.12 at 2:41 am

For steep driveways, take a look at 474 river crescent, coquitlam, they need stairs to go up their driveway…..

#82 lotuslander on 08.14.12 at 3:14 am

I can tell you what happens in Vancouver when a rental sells … the tenants are included as “assets”. The big problem is that the new landlord can’t raise the rents more than the legal “by an amount equal to the inflation rate plus two percent plus a proportional amount”. They resort what’s known as “Renoviction” so they can triple the rates. It’s happened to me twice in the past 10 years. The last place I lived in was a stable rental for 50 years and was a “referral only” building. Great people, reasonable house rules, wonderful landlord. He sold it at the height of the Vancouver bubble …

When the new landlord took over it was a few days from Christmas and suddenly there were workman ripping out walls in the common areas at 6 in the morning. This was illegal but it was only the beginning. Workers brought up from Oregon began framing walls and running electrical wiring. No permits were displayed and when they were asked what they were doing they lied and said they were just “cleaning up”. Notices began appearing stating that everyone had to move their belongings out of the storage areas and that lockers would be provided. The lockers turned out to be less than a third of the previous storage. Requests for compensation were laughed at.

Light bulbs in the common areas were not replaced when they burned out, laundry machines were disconnected, parking was revoked. The landlord began harassing the tenant living next to the “secret renovations” to move out. When requests to sign voluntary termination of tenancy forms (a favorite document with these types of landlords) failed, each tenant found an eviction notice pinned to their door … for different reasons, all questionable. To dispute these tactics in the Residential Tenancy Office is a long, frustrating experience that most people don’t have the time or knowledge to go through with and these landlords know it.

When disputes were eventually filed over these eviction notices, the landlord began a campaign of harassment choosing 24 hour notice suite inspections and intrusive invasions of privacy.

They cut down a beautiful old privacy/shade tree in the backyard. It’s easy to get a permit for that, all you have to do is pay a fly-by-night arborist. They wanted to make an extra parking space. When the old landlord learned of that, he was shocked.

It worked … everyone moved … the rents went up, the permit-less construction was revealed to be 2 more bedrooms for one of the suites and the extensive renovations that had been the reason for needing the rest of the evictions were never completed.

A “materialistic, blasé, valueless, vacuous, West Coast babe” was responsible for all this.

#83 Dividend Yield Investor on 08.14.12 at 4:45 am

#57Inglorious Investor on 08.13.12 at 11:34 pm
#24 siddelly on 08.13.12 at 10:16 pm

“[…] the tipping point comes when too many people, who don’t have any more skin in the game due to declining asset equity, walk away from their debts […]”

I predict that intentional, personal bankruptcy will become part of the typical financial plan of large numbers of young people.

Bingo! You hit the nail on the head! Direct Hit!!

Just as we are experiencing strategic defaults here in the States, Canada will have a rash of strategic bankruptcies as those with negative equity and over indebted citizens throw in the towel!

Dividend Man
Atlanta GA

#84 Aussie Roy on 08.14.12 at 7:14 am

Aussie Headlines

The new “normal” – increasing rental vacancy rates equals RE RECOVERY

Property market shows signs of recovery with rental listings on the rise

MORE than 1000 properties were advertised for rent last month compared with the same time last year.

Investors returning to the property market – and, at times, frustrated vendors unable to sell – have pushed the number of properties advertised for rent to 7057, up from 5732 in July 2011, the latest figures from RP Data reveal.

New rental listings are also up, with 3403 new listings compared with 2619 new listings for the same time last year.

Around the nation, the combined capital cities figures show an increase of 10.4 per cent in rental listings compared with the same time last year.

http://www.adelaidenow.com.au/news/south-australia/property-market-shows-signs-of-recovery-with-rental-listings-on-the-rise/story-e6frea83-1226449527576

Tax breaks for home loan borrowers need to be cut to tackle homelessness, Australia’s peak welfare group says.

In a bid to combat soaring house prices, the Australian Council of Social Service (ACOSS) says the federal government needs to cut negative gearing, a tax break for mortgaged landlords.

“We do need the political parties to be having a stronger focus on what needs to be done to address poverty and inequality in Australia,” ACOSS chief executive Cassandra Goldie told reporters on Monday.

“The experts tell us, we also know, that negative gearing does need to be addressed.”

http://theage.domain.com.au/real-estate-news/acoss-cut-negative-gearing-to-help-poor-20120814-245gh.html

#85 eddy on 08.14.12 at 7:23 am

sepeculation is buy hold sell, sometimes infill builders do ‘spec build’, but the process is more akin to manufacturing than – buy hold sell

here is a 2 hr doc on money banks etc-

“97% Owned – Monetary Reform documentary – Directors Cut ”

https://www.youtube.com/watch?v=XcGh1Dex4Yo

#86 45north on 08.14.12 at 7:39 am

lotuslander: A materialistic, blasé, valueless, vacuous, West Coast babe was responsible for all this.

great post lotuslander

[email protected]

#87 John on 08.14.12 at 7:53 am

The Phantom wrote:

“More often than not, it is the men who hold such degrees when their spouse does not, or if she does have a degree, it is a one that commands less prestige and income potential (I am not implying here that I endorse this, I am merely stating a fact).”
———-

Ahhhh ( or ohhhh) Canada, eggshell country. And an eggshell walker to spread more of the good news.

You know, the “relationship” advice given in the post is really very good: Learning how to partner up. To man-down. And to disappear like a ghost..er..phantom.

That’s the Canadian “steel” women have to deal with. Men being tamed into a negotiating house pet, briming with emotion coming from a place where the man is supposed to be.

People might think it’s over the top, but it’s not. Men are talking about “romance” and then doing whatever it takes to “hang in there” ( avoid abandonment) and not be alone.

A desexualized man has no polarity and no female market, so the very earth he stands on is made of the thinest of eggshells. So he “creates a partnership”.

The partnership described above is woman to woman and a Canadian icon. The machine just rolls right over that.

A large part of the credit bubble is driven by the man as a “lay down hand” for power brokers.

If they’ve got the man ( collectively), much of the purchases will be made from a more feminine standpoint: Emotional. Sound right?

As usual, it’s about balance. Each being themselves.

The post by phantom is heartfelt, based on experience and human. And it is also a disaster.

#88 Guan-Di on 08.14.12 at 8:21 am

#1 Turner Nation:

http://www.quickmeme.com/meme/35x6cy/

#89 Smoking Man on 08.14.12 at 8:23 am

#70. Carpe

PGP compromized.

Keysme. Allows for Plosable deniability. And the counter party need to know the keys.

Did you know algos exist to I’d a person based on writing style. Speeling and Grammer. What will they think of next

#90 █ ♣ █ RENTER - REDEMPTION on 08.14.12 at 8:30 am

# 53 T.C.

I agree with you 100%.
Similar experience, less drastic than yours but cost me tooth #8 upper right.

I got really mad at DENTIST who see their profession as money generator for further personal enrichment.

Yet all of them swore in medical schools that their job will be saving life and healing people…

That is why Doctors licenses should be revoked more often and easier!

Garth this is Tooth – Real Estate blog !

Are you Anti Dentite too, like Jerry Sinfield , T.C. and me?

#91 Rob on 08.14.12 at 8:33 am

Garth,

How do we pig’s benefit from the coming collapse? I’m thinking shorting the Cdn housing and going long US housing but how would you accomplish this with “liquid” assets?

Rob

#92 CrowdedElevatorfartz on 08.14.12 at 9:00 am

Garth’s Comment ….
“The sooner you can turn into a materialistic, blasé, valueless, vacuous, West Coast babe……”

Nail. Head. Smite.

#93 sid on 08.14.12 at 9:01 am

You are being a tad harsh. Yes buying properties with all that student debt is foolish, however the properties themselves might not be a bad idea. The $130K one has an excellent cash flow for a poperty of that price. The $300K one is a loser for sure, but there might be some other factors involved. For example, there might be a short amortization period , which yes affects cash flow but does build equity fast.

#94 young & foolish on 08.14.12 at 9:02 am

The wider implication seems to be that holding rental real-estate is for suckers.

Long live REITs! Long live cash-flow!

#95 Astute Poverty on 08.14.12 at 9:09 am

#9 Scott on 08.13.12 at 10:02 pm

What are the rules concerning signing a tenant to a 1 year lease and then selling a house?

Three month notice to vacate

#96 Toronto_CA on 08.14.12 at 9:29 am

#79 TaxHaven on 08.14.12 at 2:06 am

No, Garth has explained this before. To get the after tax equivalent returns from income taxed at the regular rate, the returns would have to be higher than the 5.6% yielding dividends (somewhere above 6.5% or so, tax rate depending).

So rental income or interest income of ~7% is equivalent after taxes to the dividend return of those preferreds, due to the dividend tax credit.

Hope that helps.

#97 joe_blown_away_by_high_housing_costs on 08.14.12 at 9:38 am

@82 Lotus Lander

I went through the same renoviction ordeal too. All tenants had to be out by Dec. 31, including those with leases. Thisn is a way of jacking up rents to the new tenants. It was such a traumatic experience. People who lived there 40 years were forced out. And absolutely the new landlord did everything they could to make things uncomfortable for the tenants. Turned the furnace way down so we had to use our ovens for heating in the winter (which was a cold one that year). I’ve seen it happen to my friends too. I was just at a friend’s rental building and there are notices that prospective buyers will be looking at suites. I told her to prepare for renoviction because that is how it started with me.

This is why I can’t wait for the RE crash to really take hold and be very severe. This bubble is personal — the way it displaces renters from their homes and communities. I don’t care if the crash takes the whole economy down with it. I’ve been poor all my life anyways so I’ll survive. Renters in Vancouver have been feeling a whole lot of pain through this bubble. Now it’s going to be the homeowners turn to feel some pain. They deserve it. I can’t wait to watch.

#98 Toronto_CA on 08.14.12 at 9:41 am

Uh oh..even the CMHC is on to us now:

http://www.thestar.com/business/article/1241556–sales-of-houses-condos-expected-to-slow-across-southern-ontario

That’s probably a sign to sell.

#99 questioning on 08.14.12 at 9:58 am

frankly speaking, a dentist with 120k in debt is nothing!

#100 cramar on 08.14.12 at 10:05 am

#3 Smoking Man

Well I’ll be… Smoking Man has turned into a theoretical physicist! That PhD has finally produced some fruit. But I wouldn’t quit your day job just yet.

———————————-

#53 T.C.

Great post on dentists and their investments.

This is not a tooth blog. — Garth

Yeah, and it is not a cosmology blog either, but you let SM pass without comment.

———————————–

Speaking of dentistry… last week I was in to the dentist and after got into a lengthy conversation with his receptionist who is a boomer and been there for about 30 years. We were talking about moving and RE when she stated, “Working in a dental office I have no pension. Our house IS our pension!”

Oh, oh! Read about that on a pathetic blog!

#101 jess on 08.14.12 at 10:26 am

24 siddelly

Shape shifters

“Those who forget the past are condemned to repeat it.”

With each decade > losses
the 80’s -150b savings and loan disaster , the 90’s (professional gatekeepers managerial fraud? earning restatements?, enron market cap 6- 7 b .) This decade housing -11t. (Bill Black)

Why has there been an apparent failure in the market for gatekeeping services?

(1) the Supreme Courts Lampf, Pleva decision in 1991, shortened the
statute of limitations applicable to securities fraud
(2) the Supreme Courts Central Bank of Denver decision, 1994 eliminated
private “aiding and abetting” liability in securities fraud cases
(3) the Private Securities Litigation Reform Act of 1995 (PSLRA), which (a) raised the
pleading standards for securities class actions to a level well above that applicable to fraud
actions generally; (b) substituted proportionate liability for “joint and several” liability; (c) restricted the sweep of the RICO statute so that it could no longer convert securities fraud class aiding and abetting” liability in securities fraud cases;

http://www.gao.gov/assets/330/321617.html

…”In order to bring a successful case for securities fraud, a private party must prove six basic elements. These elements have been developed by the courts over the years, and some aspects have been
affected by the requirements of the Private Securities Litigation Reform Act of 1995 (PSLRA).[Footnote 16]

elements
(1) a material misrepresentation or omission;
(2) fraudulent conduct “in connection with” the purchase or sale of a security;
(3) a wrongful state of mind, known as “scienter,” when making the misrepresentation or omission;
(4) reliance upon the fraudulent conduct;
(5) measurable monetary damages
(6) a causal connection between the
misrepresentation or omission and the economic loss.

Each of these elements has been extensively interpreted by the courts, and because these elements are not defined by statute, court decisions continue to shape how they are applied.

#102 Djb on 08.14.12 at 10:27 am

#69 Nodebt

What is the current cap rate that the commercial property is flowing at?

Who are the tenants and how long are the leases for?

A cap rate above 5% is acceptable anything below you might as well own a REIT

There is nothing wrong with a property that cash flows at a rate that outpaces inflation.

#103 IM in C on 08.14.12 at 10:27 am

For all those amateur speccers and flippers who think that renting their overpriced property will solve their problems:

http://news.nationalpost.com/2012/08/14/judge-calls-on-province-to-plug-loopholes-after-hearing-couple-lived-rent-free-in-3600-a-month-apartment/

The first clue should have been, believing anybody in this time and place would pay 3600/month for an apartment, when the going rate in Toronto for a 2 bedroom apartment in a high rise is 1500 – 2000 /month

#104 disciple on 08.14.12 at 10:35 am

#59 Elmer… Do you also hunt wild oar for your bacon? Pump your own well water for drinking? Use a washboard for your clothes? GM invented the automatic transmission for you a while back, maybe it’s time, old feller…

#105 Inglorious Investor on 08.14.12 at 10:43 am

#84 Aussie Roy on 08.14.12 at 7:14 am

“Property market shows signs of recovery with rental listings on the rise”

I am seeing clear (if anecdotal) signs of how, by distorting the housing market in Canada with lax lending standards, the government has hurt the rental market (for property owners at least).

With home ownership rates at historic highs, vacancies seem to be rising. I know that CMHC reports the latest rental apartment availability rate in Toronto is 3.1%, but around parts of Toronto I am seeing an increase in the number of For Rent signs everywhere.

The latest trend taking hold is people renting out second homes or their own basements, which only adds to supply. I imagine the number of people who will rent out part of their home will explode as many boomers who are desperate for cash, but don’t want to sell their homes, turn to renters for extra income.

Then there is the explosion of condo units that are sure to come onto the market as rentals. Further increasing supply.

If the correction in housing is such that it does not result in large numbers of foreclosures or people selling their homes to rent instead, then the rental market market in Toronto should be very good for renters. The supply and variety of units will be high. You will have your pick of renting any number of SFHs, walk-up apartments, or more posh high-rise condo units in the neighbourhood of your choice.

As for property owners, it’s very difficult to find a decent rental property. Was looking at a tri-plex recently. The asking price was high enough that any standard ROI calculation showed a solidly negative cash flow. Yet someone paid 109% above list.

#106 Buy? Curious? on 08.14.12 at 10:47 am

Some of the hesitation and self doubt in buying a house, choosing a Life Mate, or any big, major decision can be eased if there is proper research. Understand what you want and finding it will become easier.

http://www.youtube.com/watch?v=5K1RcKJVbHA

#107 kothar on 08.14.12 at 10:53 am

This shows what goes through the mind of a woman. Somehow at some point they just settle for any bum that comes around! How can a dentist, a supposedly “smart” person, end up with a Stucco dude? Makes me wonder what my issue is to hook up with one of these catches?

#108 Johnny D on 08.14.12 at 10:56 am

Everything is still peachy in Regina Saskatchewan!!!

Tons of new houses being built!!!
http://www.leaderpost.com/business/Regina+housing+starts+nearly+double+from+2011/7067571/story.html

House prices reaching for the moon!!!
http://regina.ctvnews.ca/house-prices-keep-rising-in-regina-1.906812

And people spending money like it’s going out of style!!!
http://www.leaderpost.com/business/Sask+retail+sales+record/6985110/story.html

Nothing can go wrong here… We’re all rich!!! I think.

#109 jess on 08.14.12 at 10:57 am

American investment banker:
There are huge benefits to size,” he says. “We bank Caterpillar in like 40 countries. We can do a $20 billion bridge loan overnight for a company that’s about to do a major acquisition. Size lets us build a $500 million data center that speeds up transactions and invest billions of dollars in products like ATMs and apps that allow your iPhone to deposit checks. We move $2 trillion a day, and you can see it by account, by company. These aren’t, like, little things. And they accrue to the customer. That’s what capitalism is.”
http://nymag.com/news/intelligencer/encounter/jamie-dimon-2012-8/
=============
Irish Perspectives
Forgive the ‘legacy debts’ and save the economy
November 8, 2010
capitalist economy, an entrepreneurial society is all about. Isn’t that what we are supposed to be?
http://www.davidmcwilliams.ie/2010/11/08/forgive-the-%E2%80%98legacy-debts%E2%80%99-and-save-the-economy/comment-page-2

Professor Morgan Kelly writes:
“People are going to extraordinary lengths – not paying other bills and borrowing heavily from their parents – to meet mortgage repayments, both out of fear of losing their homes and to avoid the stigma of admitting that they are broke. In a society like ours, where a person’s moral worth is judged – by themselves as much as by others – by the car they drive and the house they own, the idea of admitting that you cannot afford your mortgage is unspeakably shameful.”

#110 Mrs. Riveriew in Winnipeg on 08.14.12 at 11:09 am

On the $300,000 home: Does it have an assumable mortgage? Ask the tenants if they want to purchase it for the outstanding mortgage. Then you don’t have to give the Real Estate agents 6% plus GST! That would be cutting your losses.

The $130,000 house, with a tenant in it, and the positive cash flow, would sell very fast on Kijiji. Another 6% plus GST saved.

#111 Deliverator on 08.14.12 at 11:10 am

Hey Smoking Man,

Physics is ‘spoken’ in math. So write it up that way and see if it ‘makes sense’. Good luck.

#112 Nodebt on 08.14.12 at 11:18 am

I don’t see a problem with a dentist charging as much as he can! If I was a dentist I’d most likely do the same! I know lots of multi millionaires and they describe it best, we’re in business to make money not friends! If people would just get off their lazy asses there’s lots of money to be made out there, I work 70-100 hours a week! Most people can’t handle 35, oh and brush ur teeth twice a day so ur dentist doesn’t milk you !

#113 Gunboat Denier on 08.14.12 at 11:32 am

64 Patiently Waiting – how do you know there is more than one mortgage on the property?

80 Oceanside – you and I both know the property was never worth 1.2. No idea why they would list at such a price. The $650ish is much more realistic in todays market and is probably only slightly off the true peak from a few years back.

87 John – so you wouldnt marry a dentist?

#114 Smoking Man on 08.14.12 at 11:39 am

There it is Bubble Heads. From CMHC. Sales to slow prices to rise.

Sorry LaughingCon. You I feel sorryest for your entire identity hinges a nasty crash.

Rooting for ya mabey a condo crash so you get something out of this

#115 DM in C on 08.14.12 at 11:59 am

…..and don’t forget, it’s different in Calgary (comments not allowed)

:-/

http://www.calgaryherald.com/business/Average+house+prices+Calgary+region+jump+20000+next+years/7087793/story.html

#116 Glen on 08.14.12 at 12:14 pm

Jessica: I think you already know the answer here.

Your rental properties appear to be slightly cash flow positive, but are not netting enough to be viable. As Garth states you are a broken toilet (or furnace, or roof, or tenant who trashes the place, or a couple months vacancy) away from bleeding cash. Plus you are now too far away to properly manage your properties so you will have to hire others to do it, further whittling away at the meager cash flow.

I can’t speak too much to the Winnipeg market but property values generally appear to be headed lower, perhaps not dramatically so but hoping for some kind of a windfall here is a pipe dream.

IF the renters live up to their end of the lease agreements they get to stay with the properties for the duration of the term of the agreement – so don’t feel bad there. They can negotiate with the new landlord if they want to stay. Don’t get tied up in knots here as chances are good that the family is going to bail on you in any event.

My 2 bits,
Glen

#117 Sathington Willoby on 08.14.12 at 12:19 pm

Oh look, it’s different in Calgary! CMHC says prices in the Calgary region will increase by $20K in the next two years. They must know something we don’t….

http://www.calgaryherald.com/business/Average+house+prices+Calgary+region+jump+20000+next+years/7087793/story.html

#118 Inglorious Investor on 08.14.12 at 12:20 pm

#103 IM in C on 08.14.12 at 10:27 am

Any small landlord will tell you the law heavily favours the tenants. Having many family and friends who are landlords, I know of case after case after case where wily tenants who are simply trying to screw their landlord abuse the protections afforded them under the law to live rent-free as long as possible. There are rarely any consequences for their immoral acts to them, but the landlord usually faces heavy costs and losses.

In my experience, the typical tenant thinks that all landlords are rolling in cash and any rent they collect is simply gravy. The reality is that any small-time landlord with a mortgage on his rental property needs every rent payment to pay the mortgage and operating costs. Most rental properties are, at best, cash-flow neutral in the early years. Add in major repairs and upgrades and you’re easily in the hole. That’s why anyone who wants to buy a rental property, especially a multi-family property, is always advised to have a healthy cash reserve after forking over the initial investment.

#119 zeeman1 on 08.14.12 at 12:41 pm

# 3 Smoking Man.

Good post.

the RS tell us that visible mass (planets, etc) only account for 10-20% of the estimated measured mass of the universe, so “Dark Matter” is a clumsy way to explain our lack of knowledge about our own universe.

You can’t see “Dark Matter” yet it, but we can’t see a lot of things that we know surround us.

We don’t know enough yet but we’re still only in our infancy in this universe.

The theory of continued Big Bangs after universal contraction does have merit and has been discussed many times.

#120 Just Park It on 08.14.12 at 12:54 pm

I am envious of her income – I realize she currently sits on a large debt load – but in short order she’ll be able to pay off the student loan and life will be sweet.

I remember years ago a story in my hood, a dentist who lived life very frugal, worked 40+ years in his profession. Probably stuffed some nice coin in the mattress over those years. Anyways, the story was after retirement – I guess he lost focus on his lean ways and bet the farm on Nortel Stock when it was in the $100 range. Guess he felt he had the inside track on a big score – and as we all know – the stock never recovered besides a few false starts.

Realizing he lost most if not all his hard earned savings – he hung himself at his cottage.

The moral of the story – even those who have highly successful careers can make disasterous decisions which none of us can explain.

The Dentist should be so fortunate to have a career that will bring riches that most can only dream about.

Cheers!!

#121 Canadian Watchdog on 08.14.12 at 12:57 pm

#114 Smoking Man

“There it is Bubble Heads. From CMHC. Sales to slow prices to rise.”

What do you expect them to say? Prices are going to decline? You will never find any CMHC report forecasting prices to decline since price discovery is determined by buyers and sellers, not CMHC.

#122 Babblemaster on 08.14.12 at 1:00 pm

#112 Nodebt

You seem to think that you’re virtuous for working 100 hours a week. That’s your choice but keep in mind that donkeys also work long, hard hours. At least they do until old age, when they no longer can. We all know what happens to them at that point. I believe that humans should work smarter, not harder.

With regards to dentists “charging as much as they,” in fact, they can’t charge more than the schedule says they can for any given procedure. They problem is that a number of dentists get too aggressive with unnecessary treatment and are too focused on making money. This many times results in them doing harm. The reasons this is undesirable in a health care professional should be obvious, but, apparently, it is not to you. I suggest you seek out these enterprising dentists you admire and help them become rich. Perhaps you should get some gold implants as a testament to your exemplary work ethic.

#123 truth hammer on 08.14.12 at 1:06 pm

The dentist could move to Toronoto and get free rent for years under the lax RTA

http://news.nationalpost.com/2012/08/14/judge-calls-on-province-to-plug-loopholes-after-hearing-couple-lived-rent-free-in-3600-a-month-apartment/

In all my investment years I have never met a group as stupid as dentists generally when it comes to wild speculation….lay off the laughing gas people.

#124 VanRenter on 08.14.12 at 1:14 pm

@ #4 Tim

So True my friend, So True.

#125 Stupesing in Cabbagetown on 08.14.12 at 1:32 pm

#107 kothar – “How can a dentist, a supposedly “smart” person, end up with a Stucco dude?”

How can you make judgements about this couple based on the scanty information provided? Maybe Stucco dude has a Ph.D. in late medieval art and can’t pay the bills with those qualifications. There is no dishonor in earning an honest living.

Did they stucco then? — Garth

#126 truth hammer on 08.14.12 at 1:32 pm

#77 An Cat….funny you should mention the ‘wet coast scowl’ this is an increasing frequent topic of converstation that people are talking and blogging about.

People worldwide are noting how miserable, depressed, anxious, bitchy, lonely, anti-social, nasty, covetous, greedy, jealous and materialistic the general population of Vancouver has become. Tourists report that locals are impolite, unfriendly, shopkeepers and restauranteurs are boorish unsmiling cretins.

There was a CBC mini reportage and a newspaper expose on this topic recently. The reporters concluded that Vanc is the worst place to try and socialize or gain friendships of any community surveyed.

So…..why has Vancouver become the ass face capital of North America? Does anyone want to weigh in on this topic?

I travel quite a bit and can say that Vanc has it’s distinct culture. The first thing people ask you is ‘what do you do’….’does it pay well’….’what kind of house do you own’……’ they’ll instantly start talking about what kind of car, investments, memberships etc they might have….before even mentioning the lousy weather. I have met people who basically began to list their possessions after ‘hello’….quite bizarre.

I live primarily in the Asian culture……digging for someones personal information or asking these intrusive questions would be considered the apex of bad manners…..rude to the extreme.

It seems that all these questions are all about trying to qualify your income status before wanting to know who you are. The only culture where social and economic status is the first issue in initial conversation is India ( done for religious reasons to determine caste). The only other place I have encountered this social culture is Germany…..where people define themselves by possession, position and pretense to the extreme…..but Vancouver? Why has Vancouver become become so ‘weenie’? Is it the debt…the pretense…..the stress…..the disonance of having to wear a lie every time you leave your concrete litterbox and slog out into the rain?

Personally I think that greed has sucked out people hearts and the Lexus lease just doesn’t fill the hole.

#127 Bill on 08.14.12 at 1:36 pm

ReMax is giving free hot air balloon rides in Halifax to drum up business.

http://www.openfile.ca/halifax/blog/2012/take-free-hot-air-balloon-ride-over-commons

#128 Inglorious Investor on 08.14.12 at 1:40 pm

#124 truth hammer on 08.14.12 at 1:32 pm

Interesting observations. I can tell you that smart people with money don’t brag about their wealth. People that do are either stupid and naive, or in debt up to their eyeballs.

#129 City that smells like it sounds on 08.14.12 at 1:45 pm

#108 Johnny D

Everything is still peachy in Regina Saskatchewan!!!

Tons of new houses being built!!!
http://www.leaderpost.com/business/Regina+housing+starts+nearly+double+from+2011/7067571/story.html

House prices reaching for the moon!!!
http://regina.ctvnews.ca/house-prices-keep-rising-in-regina-1.906812

And people spending money like it’s going out of style!!!
http://www.leaderpost.com/business/Sask+retail+sales+record/6985110/story.html

Nothing can go wrong here… We’re all rich!!! I think.
—————————————————————-

And also the reason why Garth won’t be stopping in Regina any time soon. He also knows its different here. Regina/Saskatoon are just catching up finally.

#130 Stupesing in Cabbagetown on 08.14.12 at 1:46 pm

Did they stucco then? — Garth

Apparently so.

#131 Guan-Di on 08.14.12 at 1:51 pm

#4 Tim

They don’t scowl at the good looking guys… just saying maybe the problem isn’t with them…

#132 Dorf on 08.14.12 at 1:53 pm

The start of “mharmony”……
I am…45/d/m french canadian. I have zero debt, own my meagre residence, owned a $180k property by a lake that I gave to the ex for her and the 2 kids to live in. Starting to save, own everything that I have (approx. value 70k) make 65k per year with the ability to make about 90 to 95. Hard working, self sufficient, tall and very strong. I can fix and repair anything and have all the tools to do it.
I live well within my means so that I can have things I want and pay for them quickly. All I need a woman for is companionship and cuddles.

Are there any single/divorced women in central BC with the same kind of moxy and have their finances together ?

Respond right here. (shy girls can email: [email protected])

(If I can’t find a suitable woman, then I’m going gay because lots of gay dudes have their house in order) :-)

#133 truth hammer on 08.14.12 at 1:58 pm

Did anyone notice that Canada’s one gold medal winner has disappeaered from media view? Instead the bronze medal soccer team has been ordained as Canadian hero’s……..is it politically incorrect for a woman to win?

I would have thought that the one gold medal for Canada would have been given more presence……apparently not in Canada….where winners aren’t welcome. We’d have to change the country cheer…”We’re #4…we’re #4″.

Think about it…..where’s the winner….bronze is nice but gold is where the Olympic rubber hits the road.

Is this like the Canadian education sytem mentality that has been part of the Liberal propaganda where nobody gets a blue ribbon……every one instead is congradulated for particapation?

#134 Canadian Watchdog on 08.14.12 at 2:02 pm

[GTA] Fence-sitters in no rush to buy: http://www.mortgagebrokernews.ca/news/breaking-news/fencesitters-in-no-rush-to-buy/124131/

“At least 25 to 35 per cent of my clients have put their decisions to purchase on hold,” said Deepak Bansal, a GTA broker at Dominion Lending Centres. “They took a pre-approval and hope to revisit their purchase options again in November or December.”

He’s not the only broker waiting with a growing number reporting that more and more clients are sitting on the fence waiting for the market to cool down. They’re also influenced by the media buzz of a market correction of at least 10 per cent over the next couple of years.

That little word “wait” is precisely what accelerates the downturn, because after all, why would buyers step in the market when sitting on the fence only assures them a lower future price?

BTW, remember those bidding wars in Toronto’s Riverdale area? They’re being listed again, only this time with a power of sale and no bidders.

#135 TorontoBull on 08.14.12 at 2:28 pm

she is underpaid as a dentist – 20k (after expenses, before taxes) per month should be more like it… and her debt as someone coming out of dentist school is ok. It is not uncommon to graduate with 400k debt..but then again it is manageable @20-30k per month

#136 Steve on 08.14.12 at 2:28 pm

Convenient way to get out of your RE obligations…

A major fire that damaged three homes on Thornhill Place in Waterloo last Thursday was caused by arson and police are investigating.

http://news.sympatico.ctvnews.ca/local/on/waterloo_fire_was_result_of_arson_report/b011f632

#137 Mister Obvious on 08.14.12 at 2:28 pm

#125truth hammer

“I live primarily in the Asian culture……digging for someones personal information or asking these intrusive questions would be considered the apex of bad manners…..rude to the extreme.”
———————

In the Asian culture it is far more acceptable to wear one’s wealth conspicuously so that no one need ask about worth and status. This is the concept of having a “big face” in the community.

For example, its quite acceptable and even encouraged to announce to everyone just who gave the bride and groom the most money or the most valuable wedding gifts.

That’s something the we find hard to understand in western culture.

#138 Canada Disaster Story on 08.14.12 at 2:30 pm

Being a landlord is not all it is cracked up to be and some would rather not go through some of the inconveniences. Some stories from co-workers/friends:
– found out his tenant had made his house into a small engine repair shop.
– tenant not paying the bills long term and went to court and ending up just cutting his loss in the end.
– landlord paid for utilities and there was an extremely high bill at end of month. Basically just cut his loss on the incident.
– issues with people not able to pay the rent short term.
– issues with fixing and maintenance.
– issues if landlord is living in another location. However a workable situation can be created.

I know some people if don’t need the money just have a vacant home as don’t want the hassle. However, that is not the best situation as house will usually start to deteriate.

That being said there are good tenants probably 95 plus percent and no issues.

#139 Nodebt on 08.14.12 at 2:34 pm

Gold implants? I guess I could babble master but my teeth are mint! I guess I am a donkey, ask my amazon and she will say yay from the waist down, as for working my ass of since 92′ it has got me to be a 1 percenter! 17 more months and I can go be a Walmart greeter and dont have to worry! It amazes me when people tell me im lucky to have such a nice house and then I tell them how much I work and they can’t believe it! The problem with society is most people want everything for free! And are to lazy to go out and work hard! I love being a donkey !

#140 triplenet on 08.14.12 at 2:35 pm

#80 Oceanside

You’re confused.
Try not to be wrong all the time.

#141 John on 08.14.12 at 2:38 pm

Gunboat Denier wrote:

“87 John – so you wouldnt marry a dentist?”
——–

Something tells me to stay clear at this moment…the experience would probably be like pulling teeth.

#142 patiently waiting on 08.14.12 at 2:39 pm

Gunboat Denier on 08.14.12 at 11:32 am
64 Patiently Waiting – how do you know there is more than one mortgage on the property?
—————————————————————-
Easy, every property listed in the Fraser Valley Real Estate Board has an automatic title search completed for the new listing. All the title searches are visible (along with all of the other listing information) to all board members. The title lists all charges including mortgages.
PW

#143 Hoof - Hearted on 08.14.12 at 2:43 pm

Facebook stock anyone?

Facebook stock ‘lock-up’ to expire, allowing insiders to sell shares

http://www.thestar.com/business/sciencetech/article/1241712–facebook-stock-lock-up-to-expire-allowing-insiders-to-sell-shares

MENLO PARK, CALIF. — Facebook’s early investors and a handful of top executives become eligible on Thursday to sell stock they own in the social networking company. It marks the beginning of a time-honoured process for public companies, which will culminate in the fall, when many Facebook employees receive the same right to sell their shares.

It’s conceivable none of them will sell. But if they do, up to 1.91 billion more shares could flood the stock market, joining the 421 million that have been trading since Facebook’s initial public offering in May. So-called “lock-up” periods, which prevent insiders from unloading shares too close to an IPO, generally start to expire 90 days after a stock makes its public debut.

Lock-ups are designed to prevent a stock from experiencing the kind of volatility that might be caused if too many shareholders decide to sell a newly-traded stock all at once. The progressive phasing-in of various shareholders allows early owners to shed their stock and make way for new investors, says Peter Zaleski, a professor economics at the Villanova School of Business in Pennsylvania. But there’s risk involved too. If too many people sell, Facebook’s stock price could decline.

That’s a problem the company can’t afford. On Monday, the stock closed at $21.60, down 43 per cent from its initial public offering price of $38.

etc.etc.
================================

I say this turkeys done…..people will bail and cash out.

#144 Confused59 on 08.14.12 at 2:47 pm

http://www.calgaryherald.com/touch/business/story.html?id=7087793&rel=841484

Why are we getting mixed reports???

#145 Smoking Man on 08.14.12 at 2:50 pm

100 cramar. I’d. Eqations on my blog click on my name to see it.

120. Watch dog
So when a story comes out re enforcing you postion. Wo hoooo and when it dosent its all BS

Truth is I care not about RE anymore I’m into scence. Next post will deal with destonology. A theroy that’s says u aint contol of nothin. Atoms and electrons have it pre determind.

Its going to be epic

#146 Country Girl on 08.14.12 at 3:23 pm

Tips for Jess:
1. Choose a man who will make a good father for your children. His career vocation doesn’t matter (he can always change careers if needed) as long as he’s of good character and responsible.
2. Choose wisely when deciding where to practice your profession. Some professionals such as pharmacists and dentists may do better in more rural cities/towns where there’s unmet demand for services and also lower business and living expenses.

#147 BPOE's BrainFart on 08.14.12 at 3:33 pm

@#125 Truth Hammer
Your Comment
“Vanc is the worst place to try and socialize or gain friendships of any community surveyed.

So…..why has Vancouver become the ass face capital of North America? Does anyone want to weigh in on this topic?

I travel quite a bit and can say that Vanc has it’s distinct culture. The first thing people ask you is ‘what do you do’….’does it pay well’….’what kind of house do you own’……’ they’ll instantly start talking about what kind of car, investments, memberships etc they might have….before even mentioning the lousy weather……”

Is bang on.

I was travelling on the East Coast and when I mentioned that Vancouver is a pretty place with zero personality……a social shit hole if you will……………..
The people looked at me like i was crazy.

So be it, let them figure it out for themselves.

#148 Amazing on 08.14.12 at 3:45 pm

CMHC calling to do surveys… nothing changing on MLS… a few price drops but everyone is hanging on. Looks like Sep/Oct will be far more interesting.
The Lexus, Mercedes, BMW… super fun to drive…. but definitely will not make you a happier person if you haven’t achieved that already. As evidenced by many people that I know. Having said that… I definitely enjoy driving a nice car… lol! I think you could describe many people in the GTA in a similar way to Vancouverites as Truth Hammer does. Everyone I socialize with is doing fine financially but everyone is looking for the investment that will bring them riches. Investment properties and renters are the key they feel. Everyone seems to be pretty jealous of the next person. Interesting times..
Someone mentioned the other day that now your only option is to live on credit. I don’t agree with that… I think your best option is to live within your means. Something this entitlement generation just doesn’t get. Everyone has a HELOC to vacation. 3 weeks in cuba, 2 weeks in cuba… overheard another person discussing that they are buying a fixer-uper to flip in the next two years. I just smile and keep walking… no point being debbie-downer :)
I look at MLS as a sport… how low will prices go. I’ve been saying for years prices are ridiculous.. found this blog by fluke and have enjoyed watching the conversation and events unfold. It’s nice to be on the sidelines and just watch the whole thing play out.

#149 Spiltbongwater on 08.14.12 at 3:45 pm

Finally, look around you. Real estate throughout BC is croaking, just as predicted and pretty much on schedule.-Garth

The last 3 springs you have mentioned first sales slow, then listings swell, then prices fall. All of a sudden things are pretty much on schedule. Which schedule? Sounds like the politicians in B.C. that estimated the convention centre at $450 million, revised the cost to $900 million and when the final bill came in at $852 million, used the $48 million “savings” to pay for part of the new roof at the iconicly named B.C. Place.

#150 tkid on 08.14.12 at 3:46 pm

Jessica,

sell. Let the tenants know you are selling, then get’r done.

You are living too far away now to maintain two rental properties. This is a primary consideration apart from how cash-positive you are, or if housing prices will go up/down in the future.

With luck, the tenants in each home may wish to purchase the home. No need to evict either set of tenants – their fate will be decided by the new landlord. But do give them a heads up.

#151 tkid on 08.14.12 at 3:49 pm

Did they stucco then? — Garth

Mud and plaster have been around for a very long time.

#152 Country Girl on 08.14.12 at 4:00 pm

Tips for Jess, cont…
And, of course, listen to Garth — sell the Winnipeg properties, and invest the proceeds.

#153 Jen on 08.14.12 at 4:18 pm

#125 truth hammer
I can think of the few reasons why Vancouver is the way it is:
– greed and snobbishness that grew exponentially after HAM showed up. Suddenly, if you had a grey ugly shack in Kits you are a millionaire! Who knew, right? Snobbishness is the direct result of the above.
– crappiest climate on Earth. Lousy rain for straight 10 months, low gray clouds, no real summer to speak of. And no, 4 weeks of 25C don’t count.

Notice how open and fun southern cultures are? Well Vancouver is the exact opposite of all that.

– This is British Columbia – a place that originally had many Brits and inherited the passive aggressive, polite in your face (but stab in the back) mentality.

Place all these together and you have the unfriendliest place on Earth.

#154 Nodebt on 08.14.12 at 4:27 pm

102 Djb

2500/month plus triple net
No lease month to month
Great tenants, that have money, they have yet to miss or be late on a single payment, stress free for me, people ask me all the time to buy my building
Cap rate I believe is 5 percent, I could get more for rent but have a great tenant !

#155 Canadian Watchdog on 08.14.12 at 4:30 pm

CMHC MBS Issuance Down 0.9% m/m ($3.5bn) in July. http://postimage.org/image/cc4vnzkjf/

Yet again proving who controls housing demand when nobody has savings. If lenders can’t insure or sell risk, they won’t lend. Period.

#156 Babblemaster on 08.14.12 at 5:09 pm

#138 Nodebt

A donkey from the waist down? Ha. Ha. I will take your word on that.

Granted, many people in this mixed-up society do have a sense of entitlement and subscribe to that notion of “something for nothing.” And lots of them are jealous of other’s accomplishments. However, another related problem, with this society, is that people think you need lots of material crap in the first place. They lust after it and go deep in hock for it. Or, as in your case, they may work really hard to acquire it and, in the process, may miss out on life and later regret it. The marketers have trained many of us very well.

My point is simply that hard working donkeys don’t have a good quality of life.

#157 harden on 08.14.12 at 5:19 pm

Check it out! A realtor by the name of James Louie Chung has kindly made sense of “the 3 most commonly misunderstood RE statistics in the media” for greater fools everywhere:

1) Housing starts don’t matter
2) A drop in sales velocity might not be a sign of a slowing market
3) Averages are a terrible metric to measure house prices.

He concludes that in Vancouver “the average price has dropped by 13.3% year over year, but the typical home price is actually higher.”

http://bit.ly/QqIIUl

#158 jess on 08.14.12 at 5:41 pm

First NYT’s Sorkin & Now Reuters’ Felix Salmon Battle
rebuttle to reuters and nytimes writers felix and andrew
regarding hft etc
Better Markets
Aug 7 2012 – 7:08pm

http://bettermarkets.com/blogs/first-nyts-sorkin-now-reuters-felix-salmon-battle-better-markets

#159 smartalox on 08.14.12 at 5:51 pm

@146
Why are Vancouverites so cagey? After a decade in this coty, I can tell you that many in this city are good, down to earth people, but usually people like this are quite reserved, and keep to themselves. I have many rich friendships with people who are quietly at ease in their own skins, but you’ll rarely hear from people like this in social situations.

The Vancouverites that put the ass in assertive are those that (in my experience at least) may display the trappings of privilage, but have done little to earn them. Because they never earned what they have, they live in fear of losing everything. From the weather and the surroundings, to the city’s world-class status, to the positions that they hold, and the money that they make. If you can’t be sure that you’ve earned these things, you can never have the confidence that you can replace them if they’re lost – so you eschew risk. You cling to the things you have, defend them, and promote them as if your life depended on them.

But if you earn your rewards, you gain confidence in your ability to succeed, to triumph over adversity. This allows you to take risks, to take or leave new people, and new ideas, instead of assessing strangers as threats, or always having to express your worth in terms of your possessions.

It’s a great feeling, but extremely rare in this city.

#160 truth hammer on 08.14.12 at 6:14 pm

#136….MO….I have spent many a pleasent afternoon within conversational groups never knowing what a person did or doesn’t do while living in the Orient….never the case in Vanc-ass-face. The subject of posessions or position never comes up in polite Asian society.

I can tell you a story to exemplify this point. I was having lunch at a house one day and a woman was invited in to join the table. She was traditionally dressed and had ‘sunshine skin’…..but at no time was she uncomfortable and at all times she was treated as an equal. Several days later as I was exiting a mall I spied her selling boiled peanuts from a wickerbasket on the sidewalk. It turns out…that even though she was not rich…she was a welcome and valued member of the community and welcome as ‘auntie’ in any home……try that at a Vancouver luncheon of buisnessmen, professionals and their wives.. I’ve got to tell you….that sort of politesse is genuinely refreshing compared to the ass faced ‘wanna be’s’ of Vanc-ass-face.

30 years ago the big gold watch and chain was a sign of wealth….such things are quite out of fashion today and rarely seen in public anymore.

Asian culture is far more egalitarian. The rich kid in the neighbourhood grows up knowing his place but is never treated as ‘special’. Your ‘gift value announcement’ is recognition of a privelaged person doing their job….it is not vainglory. Privelage is accepted as dharma……not ‘privelage’.

#161 cramar on 08.14.12 at 6:23 pm

#124 Stupesing in Cabbagetown

Maybe Stucco dude has a Ph.D. in late medieval art and can’t pay the bills with those qualifications. There is no dishonor in earning an honest living.

Did they stucco then? — Garth

Garth I think this one went over your head! The great Leonardo used stucco. That round goes to Stupesing. Nice!

——————–

#135 Steve
Convenient way to get out of your RE obligations…

A major fire that damaged three homes on Thornhill Place in Waterloo last Thursday was caused by arson and police are investigating.

Happen to drive by there the day after. I figure some envious loser who will never be able to own a house.

——————–

#144 Smoking Man

Truth is I care not about RE anymore I’m into scence. Next post will deal with destonology. A theroy that’s says u aint contol of nothin. Atoms and electrons have it pre determind.

Its going to be epic

Oh, pleeeeze! I cannot wait. After you get cosmology and dysentery out of your system, I hope you will get into spelling! If one is going to do science and theory one should learn to spell them.

#162 Mithan on 08.14.12 at 6:36 pm

Just in:
CMHC says there wont be a crash.

http://business.financialpost.com/2012/08/14/housing-market-crash-not-in-cards-for-canada-cmhc/

#163 jess on 08.14.12 at 6:36 pm

cost benefit to whom?
Cost-Benefit Analysis Report and Wall Street’s attempts to undermine financial reform is available here:

remember 700b. tarp just one program
e.g. for fed bailed out the foreign exchange markets at 2.9 t rillion in month oct 2009 alone , bailed 5.4t swaps three months following lehman bankruptcy yet crisis deepened
…40 % and i just 2 decades american wealth reduced
http://bettermarkets.com/reform-news/better-markets-report-cost-benefit-analysis-and-financial-reform-pie
http://www.youtube.com/watch?v=817zClyyNoM&feature=player_embedded

#164 Devore on 08.14.12 at 6:42 pm

#129 Stupesing in Cabbagetown

Did they stucco then? — Garth

Apparently so.

What’s old is new again.

There are many things we’re discovering that ancient (and not so ancient) builders were doing, that we’re just rediscovering today, like, say, rainscreen. As old houses are being torn down, you can see they’re still in excellent condition under the stucco or siding, even though they were clad with paper and had no insulation, when new houses built today with the latest technologies are leaking and taking on massive hidden water damage months after completion.

Part of it is that some of the materials used, like hard wood framing, are either not available or too cost prohibitive, but a lot of it has to do with centuries of experience and wisdom passed down from craftsman to craftsman. As the construction industry became, well, an industry, lots of that knowledge was lost and replaced with modern cost cutting, technology and hubris.

#165 new-era on 08.14.12 at 6:42 pm

http://online.wsj.com/article/BT-CO-20120814-708977.html

Looks like Canada Mortgage trust funds need to raise money. Wonder how much interest they will pay for such a high risk item.

#166 Nostradamus Le Mad Vlad on 08.14.12 at 6:46 pm


#142 Hoof – Hearted — “I say this turkeys done…..people will bail and cash out.”

Say “NortelBre-XBre-XNortel” exceptionally quickly for the next seven seconds. You will be handsomely rewarded with a BPOE Enjoyable Enema!
*
China launching a new gold backed currency, which could to this, and EZone Collapses seem so de rigeur these days; Chinese companies pulling out of US stock markets; SS That’s why people have to put more in, so less is taken out, and Rethuglokrats Same diff; UK inflation Extra nine hundred pounds needed by families; Carclays Credit Unions are looking better every day; Romney A great role model, moving jobs to China while boosting campaign funds from outside the US, which is a felony; Seven min. clip TPTB (1%) vs. us (99%); Virus, Banks and Money; Feeding hungry kids and being fined US$600 / day for it.
*
1:14 clip Oops! Chose the wrong diner (humor); Syria collapsing “Can you say bribe? I knew you could!” wrh.com and Syria “Syria is at war with the axis of evil whose centers are in Tel Aviv and in Washington,” Syria’s Ambassador to Iran Hamed Hassan said Monday.”; WW2 in Colditz (new pix) “Not quite the image of the Nazi camps that Hollywood has been giving us, is it!” wrh.com; Obummer Eliminating ‘burbs to pay for cities? The Toilet Branches Out Wasn’t ObL a card-carrying member when they were our enemies? Sony didn’t play by the rules, so being sued; Belgium Nuke reactor stays down; Obesity epidemic Diabetes prescriptions soar. Gee, I wonder who benefits from that?

#167 Devore on 08.14.12 at 7:00 pm

#84 Aussie Roy

“The experts tell us, we also know, that negative gearing does need to be addressed.”

That’s cute.

Negative gearing, which also exists in Canada, needs to be eliminated, not “addressed”. It is a barely veiled subsidy to speculators. In a market where speculation decidedly unwanted and socially harmful, there is no room for this kind of handout.

#168 brainsail on 08.14.12 at 7:17 pm

“US v Canada border battle… at Costco?”

http://www.cnn.com/video/#/video/bestoftv/2012/08/14/nr-shopping-war-costco.cbc-news

#169 Daisy Mae on 08.14.12 at 7:23 pm

Prepmonkey on 08.13.12 at 10:01 pm
“They are thinking of evicting a family with small kids.”

***********

Well, harsh as it may seem…business is business and ‘nice guys finish last’.

#170 Gunboat Denier on 08.14.12 at 7:27 pm

141 – Thanks PW. But you have to be a board member to view the title search? I can get them thru BC Online but you have to be a registered user and they cost a few bucks each. They are easy to download (text file of a couple of Kb). You can also get them from any BC “access centre” as the info is supposed to be of a public nature.

You can also get the document themselves and see the principal, interest rate, any co-signors and mortage
terms. One caution though is that sometimes old
mortgages are not discharged even when paid out. Some
institutions and their lawyers have bad housekeeping
habits and let them pile up before discharging them. The new electronic filing should help minimize this.

140 John – Ha! Good one!

#171 Bill Gable on 08.14.12 at 7:50 pm

In times of depreciation financial assets do a lot better than, for instance, Real Estate. That is one of Mr. Turners’s cornerstones.

I get that – but what I don’t understand is our herd BLINDNESS to a stark reality – that a TON of people we both know are FINITO> Cooked > Done. And that scares me.
I don’t scare easily. I lived in Mexico and well, I survived – shall we say.

But now? I am scared for a lot of people, that are used to walking to Safeway and using the magic card and collected Air miles (*Two years saved – I had enough to fly from Vancouver to Seattle). But I digress.

A LOT of folks have saved BOPKES – and we are going to see a (some call it a fourth turning) societal shift to have NOTS.

Time waits for no man and it goes fast, bruddah’ – and too many yuppies spent their HELOC’d stuccod, firetrap, that they now won’t be able to sell and ‘ retire’ on.

Try catfood and KD on OAP. It’s scary.

What does that mean for everyday life in lovely places like, oh, Vancouver?

No jobs and enough grow ops to keep Austria high for a Century. But who can afford to live here? Few – most have to head to Bellingham to buy milk, already!

#172 Don on 08.14.12 at 7:55 pm

The economy will hit the dentist also. Less budget for miscellaneous – whitening etc. Move to Vancouver and loose your shirt. Rush hour is now 4 hours long and bridges everywhere.

This is not directed at Jess but I wonder if universities will start to teach – How to be greedy and stupid 101.

Come on folks anyone with critical thinking skills saw this coming, we even had real live case studies to follow. The famous quote of the day is “No one could have seen this coming, no one.” Really! Smart folks saw this coming as history repeats especially when stupid is at the helm.

I guess it is time to start screening professionals for real smarts. It really does amaze how many ill-informed people there are out there especially in the age of the internet. DUM DUM DUM.

#173 Gunboat Denier on 08.14.12 at 8:28 pm

Re 152 (or what shows as 152 for me) – for clarification –
on the mortage document you can see the amount
borrowed but not the amount owing.

#174 TaxHaven on 08.14.12 at 8:39 pm

@#134 Toronto Bull

“She is underpaid as a dentist”.

That determination should be left to her customers. All I know is that dentists on Vancouver Island now have to advertise furiously for more customers…and it’s no wonder. I was quoted nearly $250 for a filling – after actually paying $49 for an “inital consultation”.

These prices are not going to be sustainable in the coming real world. I just waited until I was back outside the country and went to an excellent local dentist who did it for a fraction of the Canadian price…

#175 DonDWest on 08.14.12 at 9:15 pm

Why does a dentist need to live in Vancouver? Doesn’t that job have demand EVERYWHERE? Why doesn’t she live in rural Nova Scotia or PEI? Better climate than Vancouver at one tenth the cost. She would most likely get paid around the same wage as well.

#176 greed on 08.14.12 at 9:44 pm

#159

Truth Hammer

You may want to live in Asia for awhile before you starting creating your concrete jail.

#177 Jonno on 08.14.12 at 9:55 pm

#59 You have it all wrong real men drive automatics they are not afraid to let the car do the shifting for them…besides it leaves your arm free for more important things.

#178 Ex-Edmonton Mortgage Broker on 08.14.12 at 9:58 pm

#134 TorontoBull on 08.14.12 at 2:28 pm.
dentist pay is highly dependant on geography. $20-30k/month routinely here in Alberta. not as easy in Toronto to hit those numbers anymore due to stiff competition. and Vancouver? forget it. Some hygenist in Alberta make more than the dentists in vancouver. Vancouver is the absolute worst market to be a dentist in Canada. similarly, places like California are also terrible places to try to make it as a dentist.

#179 aggie on 08.14.12 at 10:00 pm

The offer that was to come in on the weekend has not yet transpired. Another showing tomorrow, so at least a steady dribble of interest in my humble condo.

Now, if a person may still dream in these difficult times… this might be the dream: A friend and beautiful, intelligent soul is offering her paradise for sale: https://www.youtube.com/watch?feature=player_embedded&v=PgiS4DnAO0o

What is the prognosis for this type of real estate in BC?

#180 JSS on 08.14.12 at 10:13 pm

where is this evening’s update?

#181 vatoDETH on 08.14.12 at 10:21 pm

#175

greed

what are you talking about? you make no sense…

#182 Djb on 08.14.12 at 10:35 pm

#153 Nodebt

The cap rate is acceptable although it would be good to nail tem down to a 3 year term..

There will always be a demand for small commercial properties that cash flow, your expensive custom built home is another story

#183 the joke-anagan on 08.14.12 at 10:37 pm

i dropped the price on our two by four jail cell and it looks like its attracting fools! yay! if this works my wife and i wll be debt free till we die. i hate debt but we had to tango with it because of being homeowners. never again!

#184 dradak1 on 08.14.12 at 11:28 pm

#74 Nostradamus Le Mad Vlad on 08.14.12 at 1:17 am

” … Jess could offer to sell the house to the family renting at fair market value if they are interested. If so, one down. Sell the other ASAP, not so much for profit, but to loosen the millstone around your neck. Then stay liquid and rent. …”
U loosing your age – Ur point is just excuse – same as some intelligent person said “U can’t be almost pregnant.”

#185 truth hammer on 08.14.12 at 11:29 pm

#157.G…Typical canadian suckhole envious lashback from the ‘..he’s got more than me’ mentality of the average Vansucks crowd…eh? Bwahahahahahahahaaa !!! what a turd.

Why hate someone for having a better life than you……maybe it’s a sign from the comos that it is you that has to change…..

Don’t pray for the world to fall to your level……that is exactly the problem with Van ass face that everyone else here and around the world is describing …..people are so jealous of everyone who has anything they don’t it’s turned the entire city into a covetous envious crap hole.

#152…Jen…..bang on……you are in synch with what the rest of the world is saying about Van-ass face. Only from the Vancouver media zombies will you hear the ‘best place on earth’ b.s.

#186 dradak1 on 08.14.12 at 11:44 pm

“#165 Nostradamus Le Mad Vlad

… 1:14 clip Oops! Chose the wrong diner (humor); Syria collapsing “Can you say bribe? …”

It’s easy to spit in other people backyard but what about Martin Brian Mulroney & Friedrich Karlheinz Hermann Schreiber?!?
Maybe we have enough garbage to clean in our backyard – before we start to lecture others?

God help us all

#187 Can it be? on 08.14.12 at 11:52 pm

Tonight’s post?

#188 Heinz Skitzvelvett on 08.14.12 at 11:55 pm

Vancouver: come for the affordable housing, stay for the approachable women.

#189 Dan7 on 08.15.12 at 12:19 am

(BTW, why doesn’t he marry you?)

Garth why buy the cow when you can get the milk for free.

#190 Dorf on 08.15.12 at 2:10 am

Facebook is going to tank. Many users have already migrated to twitter, but their abandoned facebook account remains active even though they haven’t used it in years, because they didn’t delete it. In effect, inflating the numbers and selling based on “ghost users” who are of no value to paying advertisers. At best, Facebook will be an incomplete Fonebook with pictures.

#191 cynically on 08.15.12 at 3:22 am

I’m partially with you # 153 Jen, but not all the way but to #159 Smartalox, cut the World Class crap about Vancouver. Vancouver is not and never will be, in our lifetimes, a world class city. First, it’s too young a city. Second, it’s not big enough, population-wise. Third, although it has become fairly cosmopolitan, it most certainly is not sophisticated. There is only one really first class city in all of North America and that’s the Big Apple. Galleries, museums. theatres, arts and headquarters for finance, advertising, fashion, publishing, professional sports in every field, great restaurants, etc. etc. etc. You get my point but unfortunately there are two groups in Vancouver who are constantly using that term – the tourist bureau and our good friends, the realtors. With the latter it is World Class everything in the many new condos that have sprung up. Read their blurbs .

#192 jess on 08.15.12 at 2:58 pm

169 Daisy Mae
… when nature forecloses it not like one can hand back the keys to the heavens .

complexity and diminishing returns
CG : Archive : May 2009

How Rome got it wrong
A failed empire offers lessons for modern times
by Geoff Olson
http://www.commonground.ca/iss/214/cg214_olson.shtml

#193 jess on 08.15.12 at 3:18 pm

186 dradak1

…offshoring vehicles and shells for the rich whoops can’t use the word rich it has been supplanted by the word wealthy

the Guinness Affair, http://www.latimes.com/news/nationworld/nation/la-na-bain-creation-20120719,0,5698366,full.story

http://en.wikipedia.org/wiki/Guinness_share-trading_fraud
…”The best-known stock market scandal in Britain was the Guinness affair of the 1980s, in which four men were accused of acting to inflate the price of Guinness shares in order to make possible a takeover bid for rival drinks company Distillers. Gerald Ronson (above left), Ernest Saunders (right), Jack Lyons and Anthony Parnes were all convicted of false accounting and theft. Saunders successfully had his jail sentence halved after claiming to have Alzheimer’s, which he then became the first person in medical history to recover from’