When Paul joined the dearly departed he left the house to his three kids, Jimmy, Bev and Trish. Bev had a husband, two kids and a high degree of house horniness so she persuaded the younger two she should live there, with all three of them being on title. “You’ll always have the equity here,” she chirped, “and because we’ll pay the upkeep and all the bills, and the house will gain in value, it’s a great deal for you.”
Ten years later the place is worth a ton more. Jimmy, now 31, wants to start a micro-brewery and could use the $300,000 he figures his share is worth. Trish is happy to let things ride until she finishes university. Bev? She’s come to think of the place as hers. When Jim told his sisters he wanted out, Bev was stark. “I’m not selling, and there’s no way we’re taking on a giant mortgage so you and your buddies can piss it away on some stupid beer project,” she said. “Seriously. Just get a job.”
Families. What a great invention.
Jimmy came to see me which was pointless, since he has a legal problem, not a financial one. Being on title for the house doesn’t mean he can force a sale of the property, nor can he force the evil Beverly from living for free inside his equity by demanding she mortgage and pay him out. “So how the hell did this happen,” he asked?
And I told him: the lawyer handing the estate and the transfer of ownership of his father’s house screwed up. He didn’t act in the best interests of the siblings by failing to draft a co-ownership agreement, for foreseeing B would become a bitchy princes. Such a document would clearly set out the rights and obligations of each kid, plus a mechanism for them to monetize their equity or otherwise benefit from being an owner.
So what now?
Jimmy has to take action against sis. That involves hiring a lawyer, forking over a big retainer, and filing an application under the Partition Act (the place is in Ontario, but each province has similar statues). In essence Jimbo is asking the court to force a sale of the house, so the proceeds can be distributed among the children (who will also have to pay capital gains tax). Likely Bev will oppose the application (after she hires a lawyer and cuts a big retainer cheque), claiming there was a mutual understanding at the time of Paul’s death, and that Jimmy’s a hophead anyway.
She’ll argue there was a fundamental understanding she could live there, and absolutely no defined moment in time that occupancy had to end. By leaving her there for a decade, she’ll say the other children tacitly expressed their consent. So there. Suck it up.
Who will win? Jim, likely. That’s because the law is clear: all joint tenants can be forced to sell the property if ordered to do so by a court. That happens when a co-owner, not being malicious, obtains legal approval in the absence of a co-ownership agreement covering such events. That court can also decide to not even give Bev the right of first refusal in buying the property from her siblings, forcing her to bid for it on the open market under a court-supervised sale.
This is obviously worth knowing if, say, you’re part-owner (with a family member) in a cottage, or if parents decide to add their kids to the deed before they kick. Because people’s lives and circumstances can change at a rapid clip, any co-ownership situation can turn into a legal battlefield and an emotional swamp, when the proper protection isn’t there.
So you can only imagine the pain that might be in store in Vancouver.
Various wingnuts at the big credit union, VanCity, have created a co-ownership mortgage. It got some media exposure this week when CBC profiled two families who teamed up to buy an $800,000 house using what’s being called a ‘mixer mortgage.’ One family lives on the top, the other in the basement, and they share the kitchen and dining room, along with cooking, cleaning, monthly bills and the mortgage payment.
Says one of the hapless owners: “You have to take risks and sometimes you have to do things that are uncomfortable, but the payoff is huge.” See what house lust does to you? It can put you into a situation far less dignified and private than renting, make you absorb $400,000 in debt, while being responsible for everything a landlord should worry about. Worse, if the housing market should correct in Vancouver (hello?) you can lose whatever equity existed and end up owing more than you own. Tell me again about the ‘huge payoff.’
But that’s just the start. What happens if a co-owner loses his job and can’t pay the monthly? Or the other couple divorce and want to sell? Or they accept an offer from a biker gang that cements in the front windows?
VanCity acknowledges there are issues and dangers, and to its credit says mixer mortgage people need a co-ownership agreement, which starts out as a checklist between the parties and even includes garbage duties. They also need a damn fine lawyer. Plus a sanity test.
Mostly, every co-owner in the land needs to follow Garth Rule #7: Never buy real estate with anyone you have not slept with.
182 comments ↓
And think carefully about buying real estate with the ones you have slept with…
A mixer mortgage. Gee, what other idiotic ideas can a lender come up with to keep an old RE bull market alive, and cure house horniness as well?
This has to be a FIRST!!
Shouldn’t prospective co-owners each have their OWN lawyer, instead of one acting on behalf of both? Even a damn fine one?
Never buy real estate with anyone you have not slept with. – Garth
Shouldn’t this say Never buy real estate with anyone you are not currently sleeping with? I could buy with my ex wife under your stated rule #7, but I don’t think that would turn out as well as our marriage did.
> in fact one guy (forget his name) is one of the richest traders in history and he relies purely on math.
James Simons ?
I’ve used Vancity before… and bailed on them when they wouldn’t play ball in the 90’s when rates were 12%
Good luck to them is this implodes!!!
Garth what do you think about ING Direct Streetwise portfolios ? They don’t look to bad for new small potato investors and cost about 1% year.
Link to full Garth list?
Thanks for writing this post Garth. This is such an important topic and I think there are a lot of boomers out there who would like to leave their homes to their children but don’t want the kids to fall out with each other down the road. Seems a lovely idea to keep the house in the family in theory, but it often fails in practice.
Jimmy, hold your ground and sue her. If she wants the house so badly, she can buy you out at market.
Why don’t they just start selling larger dog houses with 99 year lease parked at provincial parks so that once again an affordable housing market can be claimed in van city.
Second largest country in the world with virtually no people in it and some of the highest home prices.
Good lord, this stupidity just doesn’t want to end.
> Never buy real estate with anyone you have not slept with …
who knows? maybe they … …
My dad’s will is currently a similar disaster. He’s alive and well, a healthy 60, which i’m thankful for. But his will stipulates that the family cottage is to be left in equal shares to my 3 siblings and myself, AND grandchildren, born and unborn.
WTF?
I’ve never taken the issue up with him but that scenario will end up a nightmare. Dad’s reasoning is that he wants it to be his legacy, a family gathering place we can all get together and enjoy, and this set up is specifically designed to make it impossible to sell. Basically, the ones who use it the most gets the most out of it, as nobody will ever ‘profit’ from its value, only it’s use.
But cottages aren’t static assets. It will need upkeep and maintenance, as well as have a utility bill to be paid. So again, nightmare.
Not to mention, I don’t really like my siblings, and don’t need a place to meet and enjoy their company. Seriously, I drink to get through Christmas with the family.
I guess my question is, if you get willed something, can you just say no thank-you. And should I in this case?
Would love some opinions on this, thanks in advance.
Hey Smoky, what think you of my dog-house idea?
We could line em up at high park’s beach all the way to Oshawa and make a loot of canadian proportion….LOL
Just be careful. Garth’s rule #7 can have you paying the bills after you get shipped out.
My rule is anything I hand over to family I never expect back. I’m sure that’s what sis expects. Family situations are tough.
And nice guys always pay lawyers. Sounds like the $3000 standard to begin with.
At least it’s in CAD. But so is the payout.
This blog should really be required reading.
Did a bit of buying today. Let’s hope everyone blown out of currency carries is done selling. Worst case is buy lower.
It sounds like at least one and maybe both of the younger siblings were minors at the time of the agreement and if so would not legally be able to enter into a contract.
It will still probably take getting a lawyer involved to sort things out.
I’d rather own half a duplex than share a detached (I’ll never own half a duplex). I hate this city sometimes.
You asked, i think it was yesterday, if people listened to you about the coming dollar correction when you made your initial prediction. Yes, I did, although it wasn’t based soley on your advice.
Inheritance, for most it’s that once in a lifetime opportunity to live it up on someone else’s dime.
Old people should blow the lot and leave nothing but moths behind.
Wow! Co-ownership mortgage… Nuts! Don’t even think about it.
#2 Retired Boomer – WI on 01.29.14 at 7:16 pm…
How about Japan, where our friends have a multi-generational 100 year mortgage?
They built their place in 1991 – with their eldest son 19 years old. He will likely take over around 2030, with 61 years still left on the original mortgage!
Not only that, he also gets to look after his parents as the first-born son.
No wonder the two younger siblings are always smiling!
This is a good piece.
I sent it to a friend with a Muskoka cottage that is about to enter a similar situation..
Mixer mortgages make Vancouver home ownership possible
http://www.cbc.ca/news/canada/british-columbia/mixer-mortgages-make-vancouver-home-ownership-possible-1.2514737
Today Fed announced another $10 billion taper
As predicted. Five more to come. — Garth
Hey baby lets have whale wars so we can go get a death pact
So, the CND dollar is dropping, does that mean your RE is now worth 10% less than a couple of months ago?
Hey Jimmy, your sister thinks that you are stewpit and spineless. How does that sound? So much for family when there is a dollar on the table. This is news?
She wants to show the other sister who the boss is so that she won’t dare get up on her hind legs either.
Lawyer up man. Pay for some capable talent in your corner. This isn’t the time to cheap out on representation. There is a lot on the line here and she knows it. You can bet that she’ll get top flight talent too.
Sis needs a legal reality check. Don’t let her play the settlement game with you. She’s a serious player for sure and the games will never end. All of her offers for settlement, if any, can be sent to your lawyer for your consideration with counsel.
The place has to be sold. Time to play a little hardball. Hopefully, with strong legal representation, she will never ever speak to you again.
I’ve been saying to my friends for a long time, by the time the RE collapse is all said and done in Canada, the credit union movement will be but a mere fraction of its current size. Locally, its pretty obvious that they’re vastly over-extended. Months after the brakes were put on zero-down mortgages through the CMHC, the local credit union was still advertising and offering them.
What effect will todays news about the taper have on canadian reits?
Pimpco says a Cnd. housing correction to begin in 2014:
https://businessincanada.com/2014/01/29/pimco-canada-housing-market-correction-no-crash-2014/
I say lots of hydrogen still left to add to the Hindenburg.
I wish every person in the world could read this post today Garth! I have seen everything you described happen to people I have known, or to people known by people I know, excluding myself. I have always been very careful where I put my gonads, never wanting them to be in a vise where someone could crush them. Assuming anything is for fools. Knowledge: priceless, and only with much knowledge can wisdom become possible.
Garth, I can see by your posts on a daily basis that a lot of fools, the “unaware and assuming”, visit your blog daily, however, I am heartened to see people who read your blog become enlightened, and get to a place where they thank you for saving their a$$e$. That is beautiful!
Garth, may your Harley rides be wondrous this summer!
About that US recovery …. um, does that mean the middle class there will bounce back into well paying jobs ?
Hey Jan I will look at your idea later, I’m a little busy right now.
Meditating,doing yoga and searching on line for a man purse.
Sound advice Garth. The first time I read your Rule #7 was a while back and I agree with you 100%, that kind of advice is priceless and I have passed it on to my GenY kids. I have one boy and a girl and plan to leave all my properties to them but I will specify who gets what in a will.
Another piece of advice/wisdom you shared with us was “do not discount the US and to buy US property”. I did and made alot of enemies including my American family members, and friends here at home. Some of the people closest to me that should have given me such advice told me the opposite. I did not listen to them and bought, and now I have doubled my initial investment. I remember when I was buying in Feb of 2012 people tellin me now is not the best time to buy, I should have bought in 2010 that was when the market had hit the bottom. I didn’t listen to them I went with my gut feeling.
I have friends now who are asking me to walk them through the process of buying property in the US, they want me to basically tell them how to do it, i.e free advice. No chance in hell will I do that, I paid to learn and they must do the same. Even now is still a good time to buy, not the best but still better than buying here in Cana..duh.
People who bash the US are just bias against the US or else they are jealous of the Yankees.
#1 Derek R on 01.29.14 at 7:11 pm
And think carefully about buying real estate with the ones you have slept with…
————————————
You beat me to it. Exactly my thoughts.
Geeezus motha gawd…..what a nightmare for Jim.
Cautionary tale indeed.
Best,
HD
Based on the principles of logic
If A -> B, then –B -> -A
Adapting this to your Rule 7,
Never buy real estate -> with anyone you have not slept with
With anyone you have slept with -> Always buy real estate
What are your first 6 rules, cause this one could bankrupt a lot of people?
Get well quick Garth, tied down is not fun.
Just a comment on agreements, my cousin Bill ( many years Chief Justice of the Alberta Supreme Court ) once told me, ” when you write an agreement do not write it so that it can be understood, write it so it so that it can not possibly be misunderstood, especially when dealing with family”.
Good advice I believe!!
In BC for sure you can force sale of property if you are on title – it is a fairly straightforward action. The idea is to prevent clogs on the equity of redemption. I know, a mouthful. Don’t know about Ontario.
bdy sktrn # 167,
“what do you make in langley?”
————————————
Custom machined parts.
— ———————————
young & foolish # 25,
“So, the CND dollar is dropping, does that mean your RE is now worth 10% less than a couple of months ago?”
———————————————
Yes. In the global reserve currency, that is the US $.
So…10% cheaper, means on sale and getting cheaper buy the day.
#12 Pop’s will.
A property with shares left to unborn grandchildren? Was this written by a real lawyer or is this a “do-it -yourself” legal will kit? Witness signatories were? Who is the Power of Attorney?
Have you actually seen this will or is this a figment of Pop’s delusional world. What’s the real story here?
The real deal for my wife and I with both PoA authorizations (medical + financial) ran about $500 three years ago for a basic uncomplicated (one child) will.
In any event, how would this will be enforced or the property be maintained? Will the grand children have to anti-up their share for the new roof? What are the CRA implications for everyone involved wrt owning more than one property?
Down the road, could you sell your share to a biker gang or donate it to a herbal smoking religious cult (in Pop’s name for sure) for a tax credit?
That would make those weekends at the cottage a whole lot more interesting!
# 20
After getting roped into such a mortgage their central bank conveniently devalued them. And right Now any equities they own are getting flushed.
They can go on a while longer but that’s the country that scares me more than any other.
Holy crap I just discovered an amazing app it’s called Google keyboard, all you do is talk into your phone and it types out all your words perfectly and free of grammatical errors.
I still haven’t figured out how to make it do caps or putting commas and periods. those are done manually.
Hunter S Thompson you are mine.
The next trip to the casino when I get totally hammered out of my brains this is going to be very interesting.
#107 Penny Henny on 01.29.14 at 11:15 am
#84 Andrew Woburn on 01.29.14 at 1:41 am
Apparently insensitive, racist Australians not only notice that some house purchasers are Chinese, they even talk about it.
Sorry Andrew, I think this is a case of you being too sensitive.
=============================
Sorry. I didn’t know I was driving in an irony-free zone.
what does sleeping with them change!
I am using it now.I will never have another delete do to bad language. this is what it does to swear words s*** f***
Ha, best invention ever.
Look out dogs, never again will I be dyslexic.
“Various wingnuts at the big credit union, VanCity, have created a co-ownership mortgage. It got some media exposure this week when CBC profiled two families who teamed up to buy an $800,000 house using what’s being called a ‘mixer mortgage.’”
******************
I read the article this morning and my first reaction was: “OMG!” (and I’m an athiest) LOL
Doesn’t the weakness in the loonie mean that private issuers of new Canadian bonds are going to have to offer a higher interest rate than US issuers to attract investors? If so, isn’t that going to start driving up mortgage interest?
What if you are sleeping with the Enemy?
http://en.wikipedia.org/wiki/Sleeping_with_the_Enemy
Realtors in Calgary are now
Realtors in Calgary are now taking after those in TO.
“If you are a first time home buyer, the speculation should stop now. You need to get out there and decide because prices are climbing every day.”
Bidding wars and everything! Fools.
http://www.vanderveenteam.com/blog/what-the-heck-is-going-on-out-there-calgary-real-estate-price-explosion.html
Does rule # 7 also apply to Swingers?
“…and they all lived happily ever after.”
Until they didn’t or couldn’t. Never mind the practicalities of melding possibly two very disparate households & lifestyles; we can all come with a laundry list of potential problems.
Let’s think pure money. One of Garth’s oft voiced plaints about the wrong real estate buy is how it can tie up your money at the worst of times. In sagging markets, liquidity is but a dream.
So let’s complicate matters with a new mortgage product potentially rife with huge problems. Both may plan to make this their forever home or have a carefully crafted agreement that covers one couple selling to the other after x number of years…
The wife of couple number one gets an outstanding job offer in another city. When the family crunches the numbers, moving costs, cost of living in new community, other costs versus salary – the new job is a clear winner. Cost of housing isn’t bad & hubby shouldn’t have trouble getting a comparable job at comparable pay.
Trouble is, couple B can’t buy them out – no way, no how. They’re okay with sharing with another family but that severely limits the potential pool of buyers just on principle, never mind ‘family fit’. If a family should be found, as of now they’re stuck dealing with Vancity – unless other companies are jumping into this. Complicated at best.
And wondering – what if this played out in The Big Smoke? Half of a co-owned home is sold to a different family. How would the whole land transfer tax thingie work out|?
Anyone have any guesses on that?
RE: #28 sven on 01.29.14 at 8:58 pm
What effect will todays news about the taper have on canadian reits?
Not much I would think. Most of the taper is already priced in. ie: 16% average drop from May to August 2013 on the first hint of taper but no actual taper.
With any luck Bev will get a lawyer with the decency to tell her to get a mortgage to buy out her brothers share. He would be a vulture to take her money to represent her. She should be more than happy to have lived there rent free. Her siblings and her could have rented the place and split the profits, but they rented/bought and she lived there. She should be happy with the rent money she saved and not be so selfish.
Co-ownership mortgage. Same reason I don’t buy RE with anyone else. Half the profits, all the debt responsibility. No Thanks.
RE:#50 Son of Ponzi on 01.29.14 at 10:20 pm
Does rule # 7 also apply to Swingers?
I would think so, since swinging is all about getting screwed as much as possible.
Cut it out. Conservatives read this blog. — Garth
Glad I could be of service!
So in order to create sustainable inflation (since labour slack makes it impossible to do so through wages) our policy is to sink the Loonie? (Rosenberg says the appetite for our debt remains strong.)
Prices for imported goods will cost both consumers and those small businesses without export reach dearly. Business can try to pass along the added cost but what about consumption that support over 65% of our economy?
What is the plan B for consumers; as higher energy costs (among many costs not included in core inflation) will erode discretionary spending?
Limping loonie fuels rising gas prices:
http://www.bnn.ca/News/2014/1/29/Limping-loonie-fuels-rising-gas-prices.aspx
Propping up over capacity/ over built and the over leveraged economy occupied most of Japan’s focus for the last 30 years.
Not allowing prices to correct and markets to clear takes a rather long time and much wasted effort…
Apologies, forgot a link…
Cross: When the dollar falls, everyone in Canada loses…
http://www.theglobeandmail.com/globe-debate/when-the-dollar-falls-everyone-in-canada-loses/article16567443/#dashboard/follows/
Not really topical to the post, but I am up for mortgage renewal…yay!
We own 75% of the house, can pay it off now, but keeping a mortgage because 2.4% paid is less than 5-6% earned.
Holy smokes, is this like pulling teeth! Maybe because we never used CMHC so the bank is on the hook, but wow. Our annual income is twice the balance, and RBC can’t figure this out. It’s not that they are saying no, but they are trying to shrink the amortization down to half of what it should be. Apparently due to some internal rule that rolled out Jan 23rd.
Get yourself prepared if you have a renewal pending…there are all sorts of casual factors that may compound my situation (flooding, price point, and my inability to grow a beard) but I had a bigger mortgage when I was 23 and had a couple of bad CDS and do-it-yourself haircut as assets.
Banks are gitt’n afeared.
I’d take the siblings on a “fishing trip”
bla bla bla. not one accolade. bla bla bla. amazing market calls for the last 4 years perfection. bla bla bla. told everybody to go nuts on USDCAD called long long long.
http://www.pwlcapital.com/pwl/media/pwl-media/PDF-files/White-Papers/PWL-Layton-Keeping-the-Cottage-in-the-Family_2013.pdf?ext=.pdf
Garth, you mentioned that “all joint tenants can be forced to sell the property…” Are you assuming they are joint tenants or did Jimbo tell you this? And if so, Jimbo doesn’t sound too bright and may have no idea what he is talking about. If BC is like Ontario, it is more likely they are ‘tenants-in-common,’ and any lawyer would have structured the ownership arrangement like this (although you did say the lawyer was crappy). You also assume the sister would fight the partition. Once she finds out she’ll lose anyway, why would she sink thousands into a losing cause?
Finally, why do you hate on owning a home so much? It may not be the best investment, but then again, equities may not be either. What goes up must come down – that’s true for all markets at one point or another. Knowing when to get out is the art.
Hey that is one of the bonuses of being an only child!! We all saved and were seriously frugal but when we all pass away he finally can by that ferrari he has been obessing about since he was 16!!
#5 tigerbaby on 01.29.14 at 7:25 pm
> in fact one guy (forget his name) is one of the richest traders in history and he relies purely on math.
James Simons ?
Jesse Livermore – Reminiscences of a Stock Operator
I think he died broke tho and killed himself.
This story sound all too familiar.
I use to prey on power of attorney sales. Bought several houses like that and got it quite cheap back in the 1990’s.
Its all the same story, first they figure it will move. But none of the siblings wants to sink a red cent into reno improvements cause who will pay for it? All they want is the cash in their hands so they can get on with life. Plus when it comes to $$$ greed sets in til they all think they are getting ripped off, or they deserve more. So in they end they just want to sell and probably gripe and bitch about their siblings for a time.
And usually they are open to offers any offers
So, Smoking Man struck gold with his google mumble app, he is crying out loud like behind a three inch bullet proof glass, trying to infect everyone with his new ecstatic persona… and no one notices.
That’s what you get, SM, or should I say Pinocchio, for finally becoming a real boy.
This is too funny… thanks SM, thanks Garth!
I dont think he relied much on math tho so maybe you’re thinking of someone else….
Trading is much about emotion and learning from your mistakes rather than math….. and patience, lots of patience.
Some good sayings are,
Be right and sit tight.
Let your winners run and cut losers quick
Be greedy when everyone’s fearful and fearful when everyone’s greedy.
A good trade position should feel so confident it’s right that you can not resist taking it.
About the house problem…. buy your sister and whole family a trip to some place cheap, like Cuba, then while they’re gone burn the place down and collect the insurance…… sure beats dealing with lawyers and courts….. haha…. but just dont get caught or you’ll be dealing with even more lawyers and courts and prison guards….. lol
#60 Smoking Man
You are turning into a girly man.
in regards to
#116 Rusty Venture on 01.29.14 at 11:56 am
Meanwhile, the Feds are trying to set up a ‘dating site’ to match immigrants with vacant jobs.
http://www.cbc.ca/news/politics/skilled-immigrants-to-be-matched-with-vacant-jobs-in-2015-1.2514673
Why is it the Cons never reveal where these job vacancies are so Canadians can train for them?
________________________________________________________________________________________
OMG – get with the flow, dude – your government doesn’t give a F about you – your not in the ”corporate class” that needs ever more newer, cheaper workers to consume intrinsically overpriced oligopoly provide services. If it happens that it builds up a more docile population, if your part of the governing class, so much the better. Really- Canada needs more skilled workers -just ask any technical graduate over the last few years who ended up swinging a hammer or going ”retail”. Haven’t you every tried to drive cross town on the 401 or been on Number 1 west of the tri-cities during the day (or even purchase a residence). The urban areas of Canada are already overpopulated and need more immigrants like the proverbial hole in the head. Don’t you realize that before the ‘Just Society’ applied to the world, for whatever reason, the Government of the day, limited immigration to maybe one tenth of what it is today. Now, it’s just a matter of time before we win the competition with the US for the size of the mob that showing up pursuing opportunities at a new Micky Ds.
#33 Chopper on 01.29.14 at 9:13 pm…
“…I have friends now who are asking me to walk them through the process of buying property in the US, they want me to basically tell them how to do it, i.e free advice…”
Sounds familiar, when we first announced our purchase, we had relatives telling us horror stories that sounded like they had read them in Canadian RE tabloids. They wanted our knowledge as well, but in addition they wanted us to go in with them – we were politely declined.
We are only up 40% from our initial purchase three years ago, however.
*****************************************
#56 economictsunami on 01.29.14 at 10:44 pm…
Yep, Kelowna regular $ 1.259 CAD, Phoenix regular $ .727 CAD.
Plan B? We tend to be very frugal during our summers in BC, it’s hard to pay CAD prices after seeing almost everything 30-50% less in Arizona.
#39 Ret
I know, right?
No, I’ve not seen the will, this is my dad’s verbal report of what he’s done, he said with a lawyer.
I guess my question wasn’t so much “is this a problem?” as clearly it is. My question was more about my options. Can you refuse to accept parts of an estate that are willed to you? If so, that’s the obvious solution I think.
“I’m not selling, and there’s no way we’re taking on a giant mortgage so you and your buddies can piss it away on some stupid beer project,” she said. “Seriously. Just get a job.”
pretty funny, get a haircut and get a real job
http://www.youtube.com/watch?v=WNg3DTBQGgk
Bruce Joseph on youtube commented on the CBC documentary “the condo game”. He has the same reaction as I did – the lack of structural integrity of the new condos will become a provincial liability. The real issue is the role of the Ontario Municipal Board in approving development – the cities cannot and don’t control their own destiny but I don’t see the OMB an issue in the next provincial election.
Bruce Joseph (wasn’t he the quarterback for the Toronto Argos?) thinks that the Toronto condo crash could be the catalyst for “an epic legendary colossal correction”. I find it amazing that Canadian real estate has just lost 10% of it value because of the declining dollar. Maybe the epic legendary colossal correction is already upon us.
#29 OttawaMike
Followed your link to the PIMCO story. That picture that illustrates it is hilarious.
Siblings Jimmy and Trish could have had it worse – the house (Bev hogs) could have gone DOWN in value and be worth a ton less in value. Who pays the shortfall, then?
Alwyn
http://ca.finance.yahoo.com/blogs/balance-sheet/canada-luxury-real-estate-market-fire-double-digit-165025617.html
Wow, great information Garth. Doesn’t apply to me, but will surely help others, who will hopefully draft and sign a co-ownership deal BEFORE things enter family feud territory.
But seriously, how to selfish, spiteful, erroneous, spoiled and horribly entitled people live with themselves. Beverly is beyond bitch, she’s full-out sociopath.
Jim, take her to court and demand that she pay your legal fees as a condition of winning. Good luck in advance!
#7 Joe Average, Vancouver
He didn’t answer so I will.
The benefits: It’s easy, and saving and investing is better than not saving or investing at all. It’s diversified, so you don’t have to thinks much, if at all. You can set up automatic deposits, investing smaller amounts gradually until you’ve built up up a bigger nestegg.
On the downside, if you don’t think at all, you’ll never learn anything. They choose how the funds are going to diversified/allocated, leaving you with little control. The fees, although lower than most mutual funds, are still higher than most ETFs.
It could be a good way to build up a significant chunk of cash while learning more on your own, and before ultimately trusting your future, much portfolio, with a financial adviser, or even taking it on fully yourself.
#35 7simplerules on 01.29.14 at 9:18 pm wrote:
Based on the principles of logic
If A -> B, then –B -> -A
Adapting this to your Rule 7,
Never buy real estate -> with anyone you have not slept with
With anyone you have slept with -> Always buy real estate
Not quite. The negative of “never” is “sometimes”, not “always”. So the English translation of ~B => ~A should actually be
With someone you have slept with -> Sometimes buy real estate.
So Garth’s . rule #7 should also apply to the Pmo buying the house of sober Second thought ,no ? If so it explains the confusion JT created today . Curve ball right in the head .all they’ve got is nerves laughter . Pierre must be proud . I am .
Just this afternoon I heard a weird variation of this very same idea. While visiting my mom at her nursing home, a discussion arose among some other visitors who were sitting with us. A woman I’d never met said that she, her husband and 2 other couples, all nearing retirement age, have decided that they will all move into the the largest of their three houses, sell the other two homes and then hire a crew of full-time nurses to attend to their every need.
When I suggested that the residence would require all the inspections of a nursing home she poo-pooed the idea, saying since it would be a private residence none of the usual codes need apply. At that point I backed out of the conversation because I could feel my hackles rising.
On the way home my husband raised the issue of liability insurance for the nurses and other points that would surely come into play, not least the question of what would happen when the individuals begin to die off. What would the 3 sets of heirs have to say about the whole thing?
A dog’s breakfast in the making for sure!
Sears Canada punts 624 more employees, second round of layoffs this month
http://www.cbc.ca/news/canada/sears-canada-to-lay-off-624-employees-1.2516343
20% of Canadians 55+ are $100 grand or more in debt
http://globalnews.ca/video/1114176/elderly-debt-problems
#44: Smoking Man
Go ahead and use Google keyboard, this way THEY can sell YOUR book (and thoughts) before you can…..I would expect MUCH more hesitation of using such “magical” and “free” products from a guy using Smoking Man as a name….Have you not seen Inception?? This is Google’s version. Who are you, and what have you done to the REAL “Smoking man”????
I think someone has hacked Smoking Man’s title!
That doesn’t sound like the SM i know.
And I don’t want to read anything by SM unless its 100% dyslexic.
Bring back the old Smoking Man!
Don,t pay the lawyers just yet.
Easy answer for Jimmy . Simply move in and take up 1/3 the house. Jimmy boy gets paid out pronto.
“Never buy real estate with anyone you have not slept with.” -Garth
Hey Garth! Does this rule out half the ladies of Toronto and all the ones in Barrie for me?
I love the family infighting stories! Those types are the rawest of stories. You’re going to see alot more of them when it is time to sell the cottage. I know of this one guy that has seen a lawyer about it without mentioning to his brother and sister and is strategising now. Soon as the parents knock off, he’s of the the court house to force a sale before the first shovel of dirt hits the coffin!
http://www.youtube.com/watch?v=rRqKYXcL-2U
Rob Ford 2014 because being the mayor is a tough job.
I re-read my post and I think I was trying to imply that I QUALIFY to buy real estate with half the ladies of Toronto and all the ones in Barrie.
It’s early.
RE prices in Canada, have only one place to go and that is up, maybe not by a lot, but they will rise. It’s time to throw the book away.
#44 Google Keyboard
—
Wow, does it fix stupid?
Finally getting off my butt and moving kids fee sucking RESP mutual fund over to TD E-series. After looking at different options, this is the best fit for small monthly contributions. no purchase fee and mers are much lower. My kids are 12 and 10 and I’m moving in 40 grand. I was thinking
Can Eq. 25%
U.S.Eq. 25%
Intl. Eq. 25%
Bonds 25%
Any advice is greatly appreciated.Long time reader, FTP.
Signed up to TO Solds again for a laff.
People paying 1 mill for a semi and 2 mil for a house. In this frozen wasteland?
Here’s a hint: you know all those restaraunts and condos here named after world class cities:
Boston Pizza, New Orleans, The Venice, New York Fires, Manhattan Burger, I could go on and on; Malibu condos, This is London condos, California condos.
Do they have any named for Toronto over there? Ha.
http://www.torontomls.net/PublicWeb/CL_CF.asp?link_no=51844331.206100&t=l
Buy Curious I was not aware that 420ers could actually produce offspring. Well done.
(Blankly limping along.)
I don’t always agree with everything stated in this blog, but wow that is bad. These people are dummies.
I can related to this somewhat, when my mother passed away, beside lots of good vivid memories, biggest asset that was left behind was an apartment where my sister and her family lives now. Value vise apartment was not much, selling a thing would generate just enough cash for one new KIA. Actually my half would fall short of covering airfare for my family going back home for funeral. What was interesting when I was discussing what to do with my wife, sell not not not sell, she fully supported me when I went to first law office and unconditionally surrender my half to my sister. I don’t have second taughs because of the estates small value, but if estate was bigger different desition would be made.
Good read below
I am not big on GW but what concerns me is pollution. Interesting that pollutions and air born particles form China are find in significant quantities in California.
http://pubs.acs.org/doi/abs/10.1021/es101450t#afn2
Alberta people read this, boing is working on sustanable biofuel, it uses some plant that can grow on sand in deserts.
“… he technology is being developed in Abu Dhabi, it has potential for the entire world. In fact, everywhere where there are deserts.”
http://www.energypost.eu/exclusive-report-boeing-reveals-biggest-breakthrough-biofuels-ever/
And this
http://finance.yahoo.com/blogs/talking-numbers/here-are-the-market-s-secret-buy-signs-132017253.html
When over 30% people depending on lottery and almost half depending on pension payments from government there will be a lot of elderly povertyMajority are counting on CPP for retirement; others will rely on lottery: poll
Read more: http://winnipeg.ctvnews.ca/majority-are-counting-on-cpp-for-retirement-others-will-rely-on-lottery-poll-1.1662675#ixzz2rtOM9rYM
Wow, Bev sounds like a turd – her husband lucked out there. How’s that “gain in value” working out for ya, Bev? I hope Jimmy gets his share and ends up pissing it all away to the very last drop.
People, ugh.
I’m hoping a similar situation exists with the previous tenants of the house I’m renting. Upon moving-out, they left the place an utter disaster, a deliberate act of “f you” to the landlord and the next occupiers. One step further and they would have smeared excrement on the walls.
Anyway, they got out of dodge with no forwarding details – all the LL knows is that they bought somewhere. Sadly these brainboxes forgot to change their address with all their banks, etc. Well, if they think I’m going to not open their mail and snoop on their deets after spending a combined 28 hours scrubbing a mere 1000sqft because of their filth, they’d better think again. Turns out they have a co-owned shack out in BC with two mortgages on it. Paid monthly at a glacial pace. Non-RE investments total… drum roll please… $20k. Woo!
I sincerely hope the same situation happens to them.
As for the mixer mortgage – how desperate can the industry get? First they tried promoting parents to buy for their kids. Now this. What next? Co-ops to buy a 1500sqft house? Lame. The writing is on the wall, stop trying to delay the inevitable.
#62 Trojan House — “Finally, why do you hate on owning a home so much? It may not be the best investment, but then again, equities may not be either. What goes up must come down – that’s true for all markets at one point or another. Knowing when to get out is the art.”
Garth has been pretty clear that there’s nothing wrong with owning your home, but that many Canadians have far too much of their net worth in theirs; they bought at too high a price and don’t have any money to invest elsewhere. Aiming to have the house paid off by retirement is, when you think about it, a very low-expectations plan. Then what?
#64 Jesse Livermore on 01.29.14 at 11:39 pm
Jesse Livermore – Reminiscences of a Stock Operator
I think he died broke tho and killed himself.
__________________________________
quite a popular misconception. Jesse suffered from severe depression, and committed suicide in 1940. he was worth ~$5 million at the time.. though, he was worth around $100 million in 1929… AFTER the Crash. where he made millions shorting the markets.
Ze booming American economy: US Pending Home Sales fell by 8.2% in Dec 2013 compared with Nov 2013. They stand at 0.2 points above the Oct 2012’s levels now (92.4). They keep falling since June 2013, when hedge funds stopped their home buying spree.
Moreover, this number is calculated and reported by NAR (National Association of Realtors), which was caught lying on their sales numbers. Even the embellished truth looks bad.
89 FTP on 01.30.14 at 8:54 am
Good stuff on deciding to move to ETFs.
Read a bit about asset allocation- your initial thoughts might not be appropriate, given that you will need to access this money in six or seven years.
Sorry – they stand at 0.2 points above the Oct 2011 level, not 2012.
I am with you!
The best Return of Investment I have ever seen is from RE.
Instead of putting your money into stocks to experience this:
http://i.imgur.com/rSJuRFU.png
You better buy a house renovate and sell. Here is one example
W2728750 2 Abner Pl 500000 04/09/2013
W2813815 2 Abner Pl 725000 17/01/2014
225K gross profit in less than 4 months baby!
I challenge anyone around here to show me a similar return in stocks/indexes whatever financial instrument you prefer
do all sisters suck?
just curious
’cause I have no one
I won’t be leaving any beloved home (aka cornflakes, wood, oil, and sand products) to my kids. Liquid assets only, no hassle or guilt bestowed upon others on having to preserve or maintain the thing.
After the house horniness wears off the hardware of a house is way over-rated in my opinion. Make your memories where ever you are.
“Seven – this one is so underrated – keep your family and business completely separated…”
;)
Government’s can’t raise their rates off the Zero floor!
Asked those folks in Turkey!
Holy schnikes 7.75% to 12%!!!
The Turkish central bank has announced a steep rise in the embattled nation’s overnight lending rate from 7.75 per cent to 12 per cent, as it moves to fend off a potential crisis that has rattled global financial markets in recent days.
Turkey steps in to defend lira with interest rate rise http://bit.ly/1gtVdSq
#101 recharts on 01.30.14 at 11:17 am
#87 Franco on 01.30.14 at 7:05 am
RE prices in Canada, have only one place to go and that is up, maybe not by a lot, but they will rise. It’s time to throw the book away.
I am with you!
The best Return of Investment I have ever seen is from RE.
Instead of putting your money into stocks to experience this:
http://i.imgur.com/rSJuRFU.png
You better buy a house renovate and sell. Here is one example
W2728750 2 Abner Pl 500000 04/09/2013
W2813815 2 Abner Pl 725000 17/01/2014
225K gross profit in less than 4 months baby!
I challenge anyone around here to show me a similar return in stocks/indexes whatever financial instrument you prefer
===============================
Seriously? Have you ever read the hundreds of concise examples posted regularly in this blog? Start with Math 9 , graduate it and go from there and get back to us.
This issue of family combat is more common than most people can imagine. As a young VP a big part of my business was settling estates between contentious siblings and parents. I have seen many more child sue mother/brother/sister cases than I want to remember. I usually found that greed ( I called it ‘having Camaro’s in their eyes) and the lawyers were the biggest problem. The lawyer has a rate book and knows exactly how backed up the court calendar is. It is very difficult to dislodge a lawyer from a big payday two and three years down the line. I found the best way was to understand the lawyers greed first and pay him out present value of his eventual claim on the estate. The legal process is no different than a contentious divorce…ugly but doable.
Buddy, from where I come Mathematics is studied all the way from first grade to the last year of university, not like in Canada where you just learn SOME Mathematics when and if you go to university.
Back on topic: I wouldn’t mind if you could detail the maths that show you that my statement is wrong
Facts baby facts! Don;t use RE agent logic …
#82 Google Spy on 01.30.14 at 2:27 am
#44: Smoking Man
Go ahead and use Google keyboard, this way THEY can sell YOUR book (and thoughts) before you can…..I would expect MUCH more hesitation of using such “magical” and “free” products from a guy using Smoking Man as a name….Have you not seen Inception?? This is Google’s version. Who are you, and what have you done to the REAL “Smoking man”????
———————————————————-
MKULTRA already controls Smoking Man so google keyboard is part of our plan. If you want to find the real Smoking Man just go to the Seneca Casino every weekend. He is the guy fishing quarters out of the bathroom stalls. Also the guy sitting at the Club 101 bar talking to all the young hotties. He picks them up every weekend!
From one mass delusion to another. Go away “I am rich, look at my mortgage”, here comes “I will be rich, I just have to pick the right numbers”.
http://montreal.ctvnews.ca/one-third-of-canadians-counting-on-a-lottery-win-to-fund-retirement-1.1662830
Hey Garth,
My brother and i bought as co-owners a water access cottage on Georgian Bay near Parry Sound in 2003 (many were still recovering then from the housing slump of the 90s, some cottage prices very low then),… it was well under $100,000.
A local real estate agent appraised it at 2x value this year. Will these cottages retain there value over the next 5 – 10 years or do you think they will loose. Should we re-write the deed to be joint tenets.
As well, on a 2nd note…Can you write a blog article on your opinion about Ontario government wanting to start it’s own MANDITORY pension plan.
I do not trust the Ontario government at all, and truly believe this will be like a tax grab!
They have NO business deciding what is personally good for me and those of us who are prudent.
They have proved that they are INCOMPETENT with the taxpayers money and they will do as such with their publicly run pension plan as well.
Ray Skunk talking about the former tenants that left the place a mess:
Well, if they think I’m going to not open their mail
I think that I would feel rather vindictive but what about the landlord? What if he just provided a factual report of the former tenants?
#98 gladiator — “Ze booming American economy: US Pending Home Sales fell by 8.2% in Dec 2013 compared with Nov 2013.”
Seriously? December is the slowest month of the year for home resales, so any small effect is going to be magnified. This year’s December was colder and snowier than normal just about everywhere in the US. This might have impacted sales.
Looking at the bigger picture, the advance US Q4 GDP report, with 3.2% annualized growth, was slightly above expectations. Personal consumption expenditures (PCE) increased at a 3.3% annualized rate. In other headlines, Freddie Mac says mortgage Serious Delinquency rate declined in December to the lowest since February 2009, CoreLogic says completed foreclosures were down 24% in 2013, the Mortgage Bankers Association says mortgage purchase applications increased slightly, Zillow predicts that the Case-Shiller House Price Index will show a 13.5% year-over-year increase in December, and D.R. Horton, a large US house builder, says sales were up slightly year-over-year.
This US recovery is continuing every month whether you believe in it or not. Things still suck mightily for a lot of Americans. But the trend is undeniable.
http://advisorperspectives.com/dshort/updates/Big-Four-Economic-Indicators.php
“Mostly, every co-owner in the land needs to follow Garth Rule #7: Never buy real estate with anyone you have not slept with.”
Yah…that doesn’t always work out either….I had a meat cutter brother ( too much time with his head in the freezer) who bought his house back three times from three different wives in divorce. The funny part is that every one of his wives looked exactly like the last…..with exactly the same bubble head personality….cookie cutter obsessive….talk about an itch that couldn’t be scratched.
Meet the new year, same as the old year-some parts of 416 are one fire.
Two detached junkers at Islington and Bloor (a pocket called Springbrook Gardens) just sold, both held off offers for a week, both listed just under 700K, both sold for the exact same price- $852,000., one had 10 offers.
Here is what they say
http://www.cbc.ca/news/business/competition-bureau-appeals-dismissal-of-toronto-real-estate-board-case-1.1308399
==============================
TREB has always said it’s a matter of protecting the private information of all parties involved in a real estate transaction. It argued that it is legally and morally obliged to safeguard the privacy of buyers and sellers and cannot more widely release the kind of information the bureau would like to be made more accessible.
==============================
And here is what they do:
http://tinyurl.com/l2qnw22
Compare the above with
http://www.torontorealtyblog.com/archives/problems-at-the-printing-factory-lofts/10523
Do you see any difference?
53 comments down the road the guy turned around and removed private information from his website. Of course TREB will continue to say that their mandate is to protect the privacy bla bla bla…
And yeah, if you own a unit in that building save the Google cached page. Print it to a PDF, it might become handy if you want to recoup your loss suing the guy
#110
one third of Canadians are counting on a lottery win to fund retirement.
————————-
The other 2/3 are gambling on Real Estate.
Re: #101 recharts on 01.30.14 at 11:17 am
If you don’t get caught at the absolute wrong time in real estate flipping. The people in the stock market will all be in tears that is the long term holders of stocks. Today and tomorrow is simply month end profit taking (the people long gold and silver and short stocks) and Thursday and Friday generally trade together in tandem. February the 3rd everything will be back to normal stocks will plunge gold and silver up big. Looking for the first big crash at the start of April.
Re: #98 gladiator on 01.30.14 at 11:14 am
I wonder what the true 4th quarter GDP was in America? I’d wager heavy it was negative… 3.2 percent in their dreams.
Back in 2010 we thought we wanted to move up the real estate ladder and called one of the star agents in our area for an evaluation of our semi. I was shocked at the number we got and told him I wouldn’t pay that much for it.
Long story short, we ditched the idea after realizing how delusional the market is. I could not convince the wife to sell and rent, but at least we didn’t blow our savings on a down payment for an “upgrade” and get stuck with an monstrous mortgage. Instead we have maxed out TFSAs, RESP and RRSPs, all invested in a balanced and diversified portfolio of dividend paying ETFs. Thanks Garth! :)
Anyway, yesterday at work I got a call from the same local star agent. He wanted to know if we’re still interested in selling because apparently the market’s hot. I guess we should trust him, eh? HAHAHA
Saw that on TV last night. Wow, people are desperate. An older bro. many years ago proposed family members tear down Mom’s place & build a huge house (she had a large lot by the ocean) & we all could live there. We were totally against it I love my siblings, but would never want to live with them. Hubby & I have enough disagreements, let alone living with others.
Massive layoffs at Sears, Bets Buy!
Makes you wonter how many more thousands are being quietly let go at smaller stores and chains…
#58 Joe Schmoe on 01.29.14 at 11:02 pm
———————————————
The bank is doing that to you because they are losing money on you. Thus the quicker you pay off that mortgage, the less money they lose.
@#101 recharts
You better buy a house renovate and sell. Here is one example
W2728750 2 Abner Pl 500000 04/09/2013
W2813815 2 Abner Pl 725000 17/01/2014
225K gross profit in less than 4 months baby!
lets think on NET profits… a more accurate ROI value
Unless of course:
reno’s cost – 0$?
Realtor fees – 0$?
Capital Gains – presuming you were not living in the reno for that 4 months – 0$?
That 225K is quickly being eaten up.
Wills & Estates
If a parent decides to leave a sibling their primary residence instead of liquidating the property with no capital gains due. After the estate is settled the sibling decides to sell the house.
What will the cost basis be for determining capital gains? Will it be the original purchase price paid by the parent or will it be adjusted to fair market value established during the settlement of the estate?
#53 X on 01.29.14 at 10:32 pm
—————————————-
Probably what should have happened was that she pay 2/3’rds of a reasonable monthly rent (paid to the siblings not living there), and then any required maintenance should have been split 3 ways. And, all parties obviously should have agreed on a type of exit clause, or what would be done if one party wanted out. They are all equally entitled to their equity share.
But I believe the law indicates that if one party wants out, the remaining parties have to buy them out, whether that be through a mortgage or by selling.
#108 recharts on 01.30.14 at 12:26 pm
Buddy, from where I come Mathematics is studied all the way from first grade to the last year of university, not like in Canada where you just learn SOME Mathematics when and if you go to university.
Back on topic: I wouldn’t mind if you could detail the maths that show you that my statement is wrong
Facts baby facts! Don;t use RE agent logic …
———————————————————-
Math is a great tool however common sense is also required to get an objective conclusion once the data is collected. You’ve cherry picked one house, from a relatively small range of time which is not an accurate representation of the market which is a common realtor tactic. Too bad you can’t teach common sense.
Brad Lamb is at it again – I guess he doesn’t remember the early 90’s when condo’s tanked and some buyers had to wait over 15 years to break even. History could never repeat – because we’re different.
http://www.canadianrealestatemagazine.ca/news/item/1859-banks-have-no-clue-on-micro-condo-market-argues-leading-agent
No one here can deny that the best investment in the last ten years was buying a home. Because you could sell it today and make hundreds of thousands and take Garth’s advice rent and invest.
If you have been renting for fours or more you are the big losers. Do the math. You could have bought a few years ago and sell and be in the same situation you are in today.
No crash- carrying costs are relatively low and fixed and variable interest rates will remain low for years.
Your only hope in Job losses.
One third of Canadians planning to win the lottery to fund retirement…
Life is a competition. Investing is a competition. Does it not warm your hearts to realise just how completely unarmed most of the population is when it comes to competing in the financial markets?
I actually try hard to educate people, but I have no fear of competition since so very few will even try to get educated.
Most Canadians certainly are not qualified to invest in individual stocks. They surely need advisors. Many could use legal guardians to take over their finances.
#84 Bdy sktrn
Your suggested solution to Jimmy’s problem clearly trumps all others by a mile. I would only add that Jimmy should think about bringing a Reality TV film crew with him to catch all the action.
A 75 cents per hour pay increase equals $30 a week or $1,560 a year.
$1,560-0.P.P.=$0 in Ontario workers pockets.
The timing could not be better for introducing Ontario’s Poverty Plan.
LOL
“…Other options included the 49% of respondents who planned on selling their homes or property for some cash. Less than half — 40% — were counting on an inheritance, while 34% hoped to win a lottery. Twenty-eight percent say they expect to get financial assistance from their children or other family members…”
http://business.financialpost.com/2014/01/30/almost-90-canadians-say-they-are-counting-on-cpp-for-retirement-while-a-third-hope-to-win-the-lottery-poll-finds/
Question for Garth…I moved to Canada a few months ago. Can I put the max into a TFSA for last year and then the max again for this year? Or does 2013 have to be prorated from the date I entered the country?
Thanks!!
Very informative post! As a renter I continue to prefer to learn from others’ mistakes, and am thankful you have come across so many to share with us. Thanks again Garth.
Best Buy announcing 950 cuts in Canada today. On top of the other 650 or so by Sears yesterday or whenever that was. Retail is dying a slow ugly death in Canada. Maybe everyone can go work at the Apple Store though, those places are packed 24-7 inexplicably.
http://www.theglobeandmail.com/report-on-business/best-buy-canada-cutting-950-jobs/article16609014/
Almost 90% Canadians say they are counting on CPP for retirement, while a third hope to win the lottery, poll finds
http://business.financialpost.com/2014/01/30/almost-90-canadians-say-they-are-counting-on-cpp-for-retirement-while-a-third-hope-to-win-the-lottery-poll-finds/
Today Fed announced another $10 billion taper
As predicted. Five more to come. — Garth
————————————————-
…so again i ask, around summer time, when taper is about 35B, does anyone else see a bond trap??
Love the sign in the picture! (At least they were “with it” enough to think to clarify!)
Best Buy Canada slashing 950 full-time jobs as it thins management ranks, combines sales departments
http://business.financialpost.com/2014/01/30/best-buy-canada-job-cuts/
Google Spy..no one in there right mind would publish the book I’m about to unleash to the world.
Mk get with the program , club 101 is no more..Pathrick my bar tender severe me the last drink as they were closing up forever.
he’s working the new one opening Feb 14…featuring gogo dancers and live bands.
if you wana find me, find Patrick and say you seen the guy that orders 1 pino and 1 Kendal Jackson.
you suck , the machine is going to send you for some re training.
Bad news today. Strikes me as sort of the electronic canary in the coalmine…..
http://www.thestar.com/business/economy/2014/01/30/best_buy_canada_cuts_950_jobs.html
http://www.theglobeandmail.com/report-on-business/best-buy-canada-cutting-950-obs/article16609014/#dashboard/follows/
No wonder. I was in one of their stores recently. That was the first time after a long time because I bought many of the things that I needed online. When I entered the store I was surprised because I could not understand what was going on. The place was almost deserted, I had the impression that there were more sales assistants than clients in the store.
These shops (the same goes for Future Shop) used to be vibrant with lots of customers trying things, very animated floors and you had to chase a sales assistant in order to get some help.
Keep going Canada !
Did you hear that?
That’s the sound of the dollar breaking 90 c US. The loss of investor confidence in Canada is contagious and is the signal for loss of confidence in other areas; eventually cdn real estate. The hubris of the rising dollar, along with the hubris of the government, and home buyers, led to this mess; now what happens…
A dollar is not what it used to be, and it’s getting cheaper …. and your “liquid assets” can, and will, fluctuate wildly.
No easy place to hide ….. little choice but to ride the waves (and for that, er, well, most will need good advice)
Cue in the Financial geniuses (for a fee, of course).
I looked at the above photo caption, and it told me to trust nobody in life, as all too often things presented in the real world are not always true, so one must focus to get things right. Today rushed out to buy a one day bargain which turned out to be a fraud of sorts, so cried a bit to the woman on duty, and she told me to come back in a few days, as would get the sale price being a good customer, and smiled. Ok, so while I was there bought something on sale and walked out the door laughing my head off – do you get it!
i was very happy when i was in the orphanage.
And now,my whole being is to read this stupid blog with real dumbass opinions from poor people. if some of you dumbasses had money, I’m sure you wouldn’t be here.
i was wondering how ritalin affects a seniors view of life?
Good luck, losers. Keep praying for a meltdown in the economy.
Garth thanks for the post, great advice as always …
My sister-in-law has been preaching the idea of buying a condo as an “investment” to my wife. Wife would convey her message to me but luckily wife listens to me when it comes to investments and obviously I have been saying no. SIL just won’t stop selling this idea and if I want her to shut up, can I say something like “Since Garth advised me to never buy real estate with anyone I have not slept with. If you want me to get involve with your genius investment idea maybe you should sleep with me first”?
I am sure this will shut her and wifey up, yes?
Further to my previous post, I meant to say SIL wanted to buy WITH my wife and co-own one with her as an investment
The Loonie gets some love from PIMCO. It says that the long term trend of the C$ is still favorable. So, buy the dips this year.
It also says that the Canadian housing market will soften but not crash.
http://blogs.wsj.com/canadarealtime/2014/01/29/loonie-gets-some-love-from-pimco/
Just to clarify my post at #122 live within your means on 01.30.14 at 1:26 pm
When we were young & single I & 2 sisters rented various apts. together in Mtl. Rented 3 apts with elder sis off & on over several years here. Then finally we bought a 3 level townhouse condo together. When we both married (same day by a JP) hubby & I bought out her share & sold the TH condo a few years later. Best decision we made. I’ve moved min. 30+ times in my life. I’m an old bag – LOL.
@113 Ralph Cramdown:
This indicator was up Nov-Dec in the following years:
2001
2004
2006
2008
2010
2011
It was down in:
2002
2003
2005
2007
2009
2012
So, 6 years up vs 6 years down – December not really being “the slowest month”. That’s one.
Two: starting from June 2010, this indicator has been on a positive trend up until May 2013 and the Dec sales numbers dipped very little compared to Novembers of same years – by about 2 points. In 2013, the drop is over 8 points. The drop in Dec 2013 is the biggest since May 2010, when it dropped by 32 points.
Three: as I’ve stated, the drop started in May 2013 and continued till December – even during the summer months. It was down month-over-month between June and December inclusive.
Do you still believe in the US recovery?
I will believe in it after I see:
– taper going to zero and
– a surge in employment participation rate and
– a dropping jobless rate and
– a normal level of the Fed interest rate (5-6%) and
– a dropping number of food stamp beneficiaries
The fact that markets are up does not mean the economy is healthy – markets run on hopes and expectations. TARP and Fed’s money injections helped as well. Joe and Jane Sixpack are still having trouble finding work and they represent the real economy.
#88 Ontario’s Left Coast on 01.30.14 at 8:32 am — “#44 Google Keyboard — Wow, does it fix stupid?”
Not necessarily. “He who knows nothing is closer to the truth than he whose mind is filled with falsehoods and errors.” — Thomas Jefferson . . .
. . . which leads to — “Better to remain silent and be thought a fool than to speak out and remove all doubt” — Abraham Lincoln (not sure)
*
Incidentally, shanks, SMan, Nemesis, Frizzz, eddie and others — Remember The Exorcist? Well, history rhymes and repeats.
In the late 1920s, there were reports from Idaho of a teenage boy who was demonically possessed, but there are no records to confirm this.
The second happened in 1949 at that house in Maryland. Bill Blatty, who was a journalist / comedy writer was there at the time on other business, and heard of some strange goings-on, again with a teenage boy. The rest, as you know, is history.
Now, in Gary, Indiana it’s happenng again (spiderwalks incl.), but with a different cast of characters — 1, 2 and 3. Children will play around with things they’re not supposed to!
#88 Ontario’s Left Coast on 01.30.14 at 8:32 am — “#44 Google Keyboard — Wow, does it fix stupid?”
Not necessarily. “He who knows nothing is closer to the truth than he whose mind is filled with falsehoods and errors.” — Thomas Jefferson . . .
. . . which leads to — “Better to remain silent and be thought a fool than to speak out and remove all doubt” — Abraham Lincoln (not sure)
*
Incidentally, shanks, SMan, Nemesis, Frizzz, eddie and others — Remember The Exorcist? Well, history rhymes and repeats.
In the late 1920s, there were reports from Idaho of a teenage boy who was demonically possessed, but there are no records to confirm this.
The second happened in 1949 at that house in Maryland. Bill Blatty, who was a journalist / comedy writer was there at the time on other business, and heard of some strange goings-on, again with a teenage boy. The rest, as you know, is history.
Now, in Gary, Indiana it’s happenng again (spiderwalks incl.), but with a different cast of characters — 1, 2 and 3. Children will play around with things they’re not supposed to!
CPP
Almost 90% Canadians say they are counting on CPP for retirement, while a third hope to win the lottery, poll finds
*************************************
Well, that is one thing they have right. It may be small but of course people can count on CPP. The plan is quite healthy. It’s pre-funded. Generation x will not pay for the boomers. Boomers CPP contributions have been invested in the market to pay their CPP.
Consider CPP takes in 9.9% of wages up to the maximum and it only pays out maximum 25% of wages up to the max. Not long ago government empoyee plans were taking in 10% and expecting to pay out more like 70% of wages. CPP is mega healthy.
As for Old Age Pension, everyone should be so lucky as to have it all clawed back. I was not even planning to apply for it but with new changes that will be automatic.
This is why I said gross. The other guy who wanted to teach me Maths is muted now> I guess it is to much for him to come with some numbers to demonstrate his point of view.
Reno costs 100K (labour and materials)
RE fees 37K
Mortgage interest up to 5K assuming for a 100K down (this could be a lot lees but ..let’s say it is so)
Other fees 10K (initial land transfer, lawyers etc)
So he rolled in 200K for 4 months and his return would
His gross return is 225K
Net return before taxes=335K-(100K+37K+15K)=93K
Assume 47% taxes=53K profit in 4 months
1) what did your stock market do in these 4 months ?
2) Assuming Garth’s dream ROI 8%/year how much money do you have to put in your stocks and for how long to get the same profit
@Tony: buddy, if the RE market crashes in 4 months to the point that you recoup 0 costs then the stock market will be a hell compared with the RE market.
I believe that if you are quick and you know what you are doing the above investment has no match. I think this happens a lot in TO at this moment and that is why the average price is still going up. I am now waiting for your numbers …I am not saying that I did not miss anything above
Again, please give me an investment vehicle that gives you that return in such a short period of time
Damn .. I need to be more careful and review my messages. To little time sorry for the above
Some corrections:
335K is 225K
a couple of other phrases unfinished, to=too in one instance etc etc. However you get the idea. Sorry for my chinese
Vlad where do you find these links amazing story. note to self never go to Indiana.
welcome back dude
#154 recharts — “Again, please give me an investment vehicle that gives you that return in such a short period of time”
Those Potash calls I wrote earlier this week?
It is certain that there are people making money fixing and flipping in Toronto. But I wouldn’t compare it with passive investment income. It’s hard work, knowing the market and putting capital at risk. And you’re competing with many other fix-and-flip teams for properties, which tends to drive profits down to whatever level the highest bidder finds acceptable. I imagine some book their profits as capital gains, only to have the CRA reassess them as regular income after they’ve done a few, as an “adventure in the nature of trade.” I don’t begrudge them their profits for their work, but you have to know that, just as a rising market can fix a lot of mistakes and make otherwise average deals look like works of genius, nothing can save a flipper in a market slump.
its the currency stupid
incase anyone missed it not that anybody gives a crap but the world curencies are in turmoil starting with turkeys incredible rate hike to 12% from 4.5% overnight who says a reserve currency printing affects the world currencies to collapse due to tapering
affected currencies so far (brazil ,venezuala,russia,south african rand,argentina, just to name a few an ore on the way )
#149 & 150 – Randis
Or, if your SIL is really house-horny and you find her hot, it might be worth the big bath you’ll take on the condo investment.
Just sayin’… :)
you are joking aren’t you ?
(1) -like investing in whatever stocks that give 8% is has zero risk
(2) -note the 47% tax that is personal income.
(3) -you must be kidding me. An investor can wait to recover from a crash, so can a guy who renovated a house
Would you be able to show me a RE market that crashed in 4 moths to the point where no costs could be recovered ?
How come that all of a sudden a crash is possible in 4 months while our host here preaches a slow erosion of RE values covering the next 5-10 years? You bent the circumstances to show your point.
Re potash trash stocks: RE is predictable over a 4 months span. No stock will give you that profit by going up predictably in 4 months. I did not bother to check your particular stock example which is another schism that you created from the main ideology preached here: DO NOT BUY INDIVIDUAL STOCKS
What else?
#153 gladiator — “Do you still believe in the US recovery?”
Absolutely and unquestionably. The drumbeat of indicators showing month to month growth is overwhelming, from building permits, freight transportation, hiring, manufacturing, auto sales and corporate profits. Yes, unemployment is still high, and many Americans are stuck in houses that they owe more on than they could sell them for. But the trend is positive.
Resale housing transactions bottomed in 2011, and are now running at a third higher than that low, even with December’s drop. New housing starts, which are MUCH more economically significant than resales, are running at a rate of over a million per year, double what they were at the bottom:
http://research.stlouisfed.org/fred2/graph/?g=rwJ
By the time all the factors that you mention will convince you of a US recovery are in place, it’ll be time to move out of stocks and into bonds.
I agree with the “Various wingnuts at the big credit union” opinion, even though I work for the big credit union!
Garth do you offer your services in Vancouver?
The entire planet. — Garth
#163 Ralph Cramdown on 01.30.14 at 6:33 pm
you seem more indoctrinated then educated with your fantastic drumbeat of indicators ill just take one of your assumptions and correct you CAR sales for instance read you might actually find it interesting
http://www.investopedia.com/terms/c/channelstuffing.asp#axzz2MPQYNMOw
and here
http://www.zerohedge.com/news/2012-12-05/mainstream-media-finally-reports-gms-channel-stuffing-scandal
Another bidding war “winner”
http://www.thestar.com/business/real_estate/2014/01/30/roncesvalles_fixerupper_draws_a_crowd_and_a_hefty_803649_sale_price.html
@ #138 Victor V on 01.30.14 at 2:39 pm
Almost 90% Canadians say they are counting on CPP for retirement, while a third hope to win the lottery, poll finds
————————-
Sounds like propaganda to change laws to force larger CPP contributions to me.
Ralph,
Which team is gonna win the Superbowl? :)
#137 Toronto_CA on 01.30.14 at 2:30 pm
———————————————
Even without a frizzling economy these things were bound to happen. Ageing boomers are not your typical consumers. We’re a young family that lives in a neighbourhood where 1/2 the homes are occupied by 55-65 yr olds. Our garbage/cardboard/recycling output is at least 4x those homes.
#163 recharts — “Would you be able to show me a RE market that crashed in 4 moths to the point where no costs could be recovered ?”
The list of people who’ve gone broke speculating in real estate is long and illustrious, including Canada’s own Robert Campeau and Reichman family, the current League REIT train wreck in BC, the odious Donald Trump and many more. Thousands of small time spec developers and flippers have also taken this time-honoured path to insolvency, but weren’t big enough to gain infamy.
It isn’t hard to imagine a flipper, after gaining confidence on his first few successes, having three or four houses on the go; a finished one or two up for sale, one being renovated and another ready to go. Ten thousand dollars a month in carrying costs. Then the market turns, and real estate agents’ phones simply stop ringing.
Like I said, it’s a time honoured way of going broke. Ask any older banker.
Two words: Shotgun clause.
Basically if you want to buy your sibling’s portion of the property all you have to do is present them with the value you would like to pay. They then have two options: 1) accept that value 2) buy you out at the same value. In other words they better offer you something fair otherwise you can buy them out at their same lowball offer.
Better yet, pops should have liquidated the place and left them all cash.
#159 Smoking Man on 01.30.14 at 5:19 pm — “welcome back dude”
Only dropping by periodically now. Too many other things to pack into life.
Nevertheless, here are some good links — BRICS exploding with delight, Executive Order Obama’s going to ram his CC bill through to suck more taxes from citizens. The CPC might try and do the same if they’re re-elected and while Obama does one thing, NAU / SPP Kerry (see following) does another so hardly knows what’s going on anymore, Ukraine, Financially Falling Aoart (‘tho BI.com did report a few days ago that the S&P500 had increased by 200% in a decade, incl. the debacle of ’08), Nyet to cash withdrawals and Fried Purple Tomatoes. Eat your GMO’s now — die young and live much longer!
#107 bentoverpayingtaxes: “This issue of family combat is more common than most people can imagine….”
******************
Sometimes disputes can be settled thru mediation.
@SonOfPonzi/#170
“Which team is gonna win the Superbowl? :)” – SOP
SeaHawks. Just a hunch.
They’re actually performing better for Paul Allen than MicroSoft…
http://www.bloomberg.com/news/2014-01-30/paul-allen-s-seahawks-beat-microsoft-as-an-investment.html
He has a very nice bateau or two, too…
http://www.luxurysitescatalog.com/news/gallery/top-10-luxury-yachts/octopus_yacht.jpg
Bigger than all but two of ours…
http://en.wikipedia.org/wiki/Fleet_of_the_Royal_Canadian_Navy
#144 Best Buy: “Keep going Canada!”
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And we don’t hear ‘boo’ from the government….
#145 JD: “Did you hear that? That’s the sound of the dollar breaking 90 c US. The loss of investor confidence in Canada…”
******************
And we don’t hear ‘boo’ from the government…
Obviously co-ownership is not ideal for most people and can be a very complicated, inconvenient, and difficult arrangement to pull off successfully. Also, that CBC piece was basically just a promo for Vancity to try and sell more mortgages to house horny Vancouver families priced out of the market (like me). However, in certain scenarios with certain people I think Garth’s Rule#7 can be broken, with caution.
I am involved in a co-ownership scenario of a large recreational property on a Gulf Island that has been operating for over 30 years. The property and homes are divided into shares with a legal structure and community agreement that establishes rules for buying and selling, use of common spaces, etc. and it works great. It’s not really that different from a time-share.
I also know of a few groups of families that co-own homes and/or acerages in the Lower Mainland that allows them to raise their kids in amazing spaces that otherwise would be totally unreachable by individual ownership or renting, and with the bonus of having a supportive community of like-minded people around. It takes a certain amount of maturity, intentionality, and mindfulness that most of the readers of this blog obviously lack. It also obviously requires a rock solid contract not unlike a business partnership agreement. So, like I said, it’s not for everyone, and it’s not easy but some people make it work really well and reap the benefits of what pooled resources can offer.
Hello Mr. Turner,
Can you give us an update on your convalescence? How are you doing?
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