Good bones

ROXTON modified

Well, that was a bitch.

Remember what this pathetic blog’s been saying now for the past year about yuppies and geriatric semis? Because money’s cheap, most buyers are naive and detached houses costing over a million don’t come with mortgage insurance and 5% down payments, young morons have been madly escalating the price of half-houses on dodgy streets that realtors call ‘emerging.’

As Toronto agents Josie Stern and Valerie Benchitrit told their clients this week: “The real estate market is setting stratospheric records.  Today we recorded the highest sale price ever on the Multiple Listing Service for a semi-detached property on Ellsworth Avenue. 95 Ellsworth was listed for $799,000 and it sold for $946,000 with seven bidders.”

With land transfer tax and routine closing costs, that half-a-house actually ends up being one used Kia less than a million. And here it is:

ELLSWORTH modified

So Matt and Krysten Christie probably thought they got a pretty fair deal with they scooped 290 Roxton Road, in Little Italy, a few months ago. The saggy but soaring 120-year-old Victorian semi was bought from an estate which had listed it for $989,000 for many months – passed over because of its condition. The Christies got it for $925,000.

Here’s how realtor Harry Gliddon described it in his listing:

A Grand & Spacious Victorian Semi, 3,290 Sq Feet Of Living Area. Built In 1895. Soaring 10′ Ceilings On Main. Located In One Of TO’s Coolest & Most Desirable Neighbourhoods. Parking From Lane For 2 Cars. Legal Right-of-Way From Street. An Estate Sale, Requires Your Personal Touch To Return To Its Previous Grandeur. Could Be Configured As A Single Family Or Multi-Unit Property. Good Bones. Carson Dunlop Inspection Report Held.

The Christies began their renos a few weeks ago, which included getting a crew downstairs to dig out the medieval basement. Then one night last week Mireille Albornoz, who owns the other half of the house, started hearing shearing and groaning noises. Somebody called 911. The cops came. Ten minutes later an entire wall of 290 Roxton collapsed, spewing bricks and timbers everywhere.

Then the firemen arrived. Houses up and down the street were evacuated. The gas and hydro guys showed up, and severed the Christie house from its services. Then the City sent inspectors, who ruled both halves of the structure uninhabitable.

Finally the TV reporters and trucks came because, as you know, everybody loves real estate. And here is the report:

By the way, if you want to see some before pictures of the property – as it sat when Matt and Christie coughed up their nine hundred grand – here they are.

After the collapse, realtor Harry called the place “a fixer-upper, priced to appeal to renovators. It was considered to have good bones and a lot of potential.” And that’s exactly what the young Christies are all about – specuvestors who buy up properties, gentrify them, and flip ‘em to hipsters.

But don’t blame them. If the banks weren’t plying the kids with cheap mortgages and the government wasn’t backing them, or if people actually had to have money to buy seven-figure decrepit heirlooms, or we’d taught our offspring to value freedom over indenture, Matt and Krysten might be doing something productive.

Now, take another look at the TV footage above. See what a million buys. We are so screwed.

240 comments ↓

#1 Whitekat on 04.18.14 at 4:59 pm

OK, somewhat unrelated, but possibly first?

http://www.moneynews.com/StreetTalk/Jatras-tax-FATCA-default/2014/04/17/id/566163/

#2 GPG on 04.18.14 at 5:02 pm

More young women choosing dogs over motherhood

#3 sciencemonkey on 04.18.14 at 5:07 pm

A million dollars buys 64 years of rent. Hopefully I’ll be dead by 75, so I only need about $690,000 for the rest of my life for rent.

#4 Future Expatriate on 04.18.14 at 5:08 pm

Carries the word “teardown” to a whole ‘nother level.

#5 World According To Garth on 04.18.14 at 5:14 pm

As long as Canada is considered a safe haven to legally launder money in RE this will keep happening. Ever wonder why Garth keeps asking for stats that don’t exist? Exactly. They don’t exist. As in, they are not allowed to exist. Just like many many many other Govt stats you are not allowed to see in our not free and dictatorship Ceaser Harper society.

#6 T.O. Bubble Boy on 04.18.14 at 5:25 pm

ok – that place should have won my “$900k House of the Day” trophy… thanks CMHC for inflating the price of even condemned places to almost $1M.

#7 Hawk on 04.18.14 at 5:29 pm

Wow, the “Land Value” component grows and grows………well at-least they’re insured.

#8 economictsunami on 04.18.14 at 5:31 pm

So what’s been going on in California RE?

Funny you should ask…

QE Has Eviscerated California Housing Market: Top-End Red Hot, But Bottom’s Busting…

http://davidstockmanscontracorner.com/qe-has-eviscerated-california-housing-market-top-end-red-hot-but-bottems-busting/

Household debt overhang holding back Canada’s economy:

https://ca.finance.yahoo.com/news/household-debt-overhang-holding-back-124451782.html

#9 Old Man on 04.18.14 at 5:37 pm

The key is built in 1895 as the foundations were constructed poorly to hold a load. I almost made an offer on a fully renovated home which was a beauty so did a careful inspection. Loved it all especially with the new roof and addition on the back upper level, and an all cash offer was afoot as this had to be mine. Lets hit the basement to look around, and noticed the plate board sagging pushing that addition load into the ground. Told the Real Estate guy that a structural engineer needs to be called and take this home off the market immediately before someone is killed. He laughed, so took his ass outside and said what do you see? The new roofline was sinking, and I drove away.

#10 Marco Polo on 04.18.14 at 5:37 pm

This isn’t the ” collapse in real estate ” I was expecting. My grandfather’s house fell apart the same way, when they were doing their own basement reno and dug beneath the foundation footings. As they were doing the work themselves, there was no insurance.

Hopefully the Christine’s used insured contractors, even expensive ones, as reaching the bottom of a foundation isn’t work you ever want to DIY.

#11 lurker on 04.18.14 at 5:39 pm

While I agree with 99% of the stuff on the blog…

This was a single incident.

If the premise of this entry was “look how much people are paying for crap”, at what price would that not hold when a house falls down? 700k? 500k?

I fail to see how it’s related directly to price. The cautionary tale seems to be: Don’t rush, and check things out structurally.

Not every event can’t be related to a housing bubble, otherwise the deniers could write an article titled “300,000 homes don’t fall down, prices are fairly valued”

#12 Roger_Home_Inspector on 04.18.14 at 5:55 pm

Here’s an exercise for you. Go to Boston. The city was founded in the mid 1600’s. Now tell me how many houses you see there that are 350ish years old? Answer? None. Sure, you’ll have a couple old buildings that receive constant state dollars to keep in pristine shape due to their historical significance but how many typical sfh do you see? None. The original generation of homes were replaced and modernized during the industrial revolution and it will happen again in the coming decades. The old is replaced by the new. Dust to dust.

The fact is houses are structures built of primarily natural materials that deteriorate with time even with meticulous care and attention. Why do we seem to think that we can just keep repairing and renewing them endlessly? We need to accept that a lot of the “charming, character” homes in our province are simply tired and worn out. And, based on Garth’s post, dangerous.

Imagine what life would be like if we looked at automobiles the same way our society looks at single family dwellings. Right now, some hipster would have a shop full of mechanics fixing up a 1922 Model T to use as a daily driver. Rolling into the office in a Tin Lizzy Monday morning (Tuesday if they are government employed).

#13 What housing bubble? on 04.18.14 at 5:57 pm

No bubble in Canada’s housing market

A report from BMO Economics suggests that there is no major correction coming in Canada’s real estate market. Senior Economist Sal Guatieri says the so-called “bubble” in housing is overblown, pun intended, and that Canada is not in the same position the United States prior to the 2007 crash.

Mr. Guatieri writes: “It’s worth noting that the rapid price gains, relative to income, paled in comparison with the U.S. housing boom from 2001 to 2006, when prices (Case-Shiller) rose seven percentage points  faster than income. Canada’s price boom was smaller than the U.S.’s, and initially reflected some catch-up after a long period of weakness that left the market undervalued.”

However, Guatieri agrees that a sharp correction in the housing market could have devastating consequences for the Canadian economy overall. Based on his analysis, a 10% correction in real estate price would cut Canada’s gross domestic product growth rate in half or basically by as much as one percentage point.

5 Can’t-Miss Investment Stories From Last Week

#14 Millenial on 04.18.14 at 5:58 pm

well, if they were properly insured, then they’ll get a brand new house out of this. might be the best thing to ever happen to them.

#15 Roman on 04.18.14 at 6:02 pm

I guess they going to get insurance, right?
And then couple more hundreds thousands, hire contractors, build new house with High End Appliance In a Cook’s Kitchen, sell it for 2 mln.

#16 valleyrenter on 04.18.14 at 6:17 pm

Black Swan event for dodgy semis in the big smoke? Perception is powerful, even if it is just one collapse.

#17 Dienekes on 04.18.14 at 6:22 pm

Morons
A typical canadian home needs a complete refresh after 25 years or less.
After 50 years, complete bare bones redo. New windows, doors, down to studs, even new sheathing. At that point you see the rotted studs and decide to bulldoze the whole thing.
Best thing yhose areas could hope for is a massive fire. Stay away

#18 Pounding sand in Peachland on 04.18.14 at 6:27 pm

I guess it didn’t have the bones

#19 Old Man on 04.18.14 at 6:35 pm

Anyone considering the purchase of a home from the late 1800’s into the early 1900’s just hit the web and do a study of foundations during this period. This will surprise you and pay attention to both the footing and wall construction using bricks and stone. Now on any inspection look for the cover-ups in any form to hide something nasty; check the roofline; and make sure the load plate is level. Make sure the basement walls are free of cracks especially where it meets any poured flooring cement that was done decades later. Beware if all is covered with a recreation room or might be a half basement so check the furnace / laundry room, and walk outside all around with your eyes on that foundation.

#20 miketheengineer on 04.18.14 at 6:41 pm

At least they had Carson Dunlop do the inspection…

Which is likely the better or best home inspection company about.

#21 Coho on 04.18.14 at 6:47 pm

Good bones or osteopor-housis?
Solid chocolate or the inside of an aero bar?

Let’s be serious…people can’t expect all 4 walls to remain standing having spent less than a million dollars. We’ve all heard the saying, ‘You get what you pay for’. If you want quality, you must pay for it.

#22 gladiator on 04.18.14 at 6:57 pm

I guess insurance will return their money, so they can go buy another “good bones” house to flip. Or am I wrong here?

#23 Aggregator on 04.18.14 at 7:02 pm

290 Roxton Rd. was listed in 2012 for $989,000.

Krysten: "It's not just a house. It's our home."

Matt: "Now look at our house. We got boned"

#24 noodles' 79 on 04.18.14 at 7:04 pm

To gage the mentality of today’s ‘hipsters’,all you have to do is go to a Tim Horton’s drive through.I cant count the number of times l see someone in a fancy new luxury sports car pull out a debit card to pay for a coffee.They’ll finance $100,000 cars and dont even have two bucks in their pocket.They all think their Howard Hughes.Need l say more?
P.S. I do.If your going to finance a fancy new luxury sports car , at least learn to drive the damb thing , cant beleive the number of idiots driving nice fancy cars these days…wait a minute , l could belive it , cause its the same idiots financing million dollar tear downs.Now lm done!

#25 HogtownIndebted on 04.18.14 at 7:21 pm

We saw that house on Ellsworth a few days ago. Even slowed the car down to take a closer look.

Then…ugh…we saw that the other half of the semi showed clear signs that it was occupied by a potential hoarder, certainly in disrepair and looking rather impoverished. We grimaced and chuckled at the thought we had paused there for even a moment. To hear it sold for almost $1 million – incredible.

Even the $799k ask was unreasonably high. St. Clair West has some appeal, but is mired in economic slowdown with way too many cash money stores and dollar stores and vacant storefronts and restaurants that are always empty, not to mention empty condo and several condo building sites (currently closed-up businesses) that have yet to see a shovel in over a year.

What does the realtor tell the buyers about the other- halfers to justify such a price in a case like that, I wonder?

#26 mel in victoria on 04.18.14 at 7:31 pm

Garth, if one is a US citizen, can they open a TFSA here in Canada? And if they can, unlike Canadian citizens, they’d be obliged to declare any gains/income? Thanks.

Any resident can have a TFSA. The IRS considers gains to be taxable. — Garth

#27 mel in victoria on 04.18.14 at 7:36 pm

Garth, I should add..a US citizen living in Canada..Thanks..

#28 mel in victoria on 04.18.14 at 7:37 pm

Thanks for your response.

#29 Shawn on 04.18.14 at 7:44 pm

Insured? Really?

What insurance would that be? I doubt that homeowner insurance would cover this.

The contractor will have to be sued and may have insurance. Sounds like there was an engineer involved also. He will need to be sued. It will take a long time to settle out.

For anyone owning a dumper 100-year old house if the roof falls in due to rot, or the walls, I doubt you have insurance.

It’s insane to buy these places unless you tear down and build new.

On my suburban street a 30 year old house just got torn town and is being replaced. That was a shocker but at 60 years and certainly at 100, it’s time to tear ’em down.

#30 jess on 04.18.14 at 7:44 pm

regulatory capital arbitrage?

http://www.golemxiv.co.uk/2014/01/on-death-and-derivatives/
http://www.bloomberg.com/news/2013-12-18/zurich-insurance-to-lower-banks-operational-risk-capital-needs.html

#31 Shawn on 04.18.14 at 7:49 pm

Cash is Pase

Noodles 79 says

I cant count the number of times l see someone in a fancy new luxury sports car pull out a debit card to pay for a coffee.

*****************************************
Yeah, well debit cards are the new cash which has been happening for 30 years. Why bother carrying cash if everyone takes debit? You have no valid complaint.

Canada should now work to rid the land of cheques and also old-style cash and coins. That stuff is all old fashioned. (Apologies to the jar Lady).

#32 Bobby on 04.18.14 at 8:01 pm

I can only imagine an idiot would bid up a house. But you cannot legislate against stupid. The problem is that many will be looking for someone to blame when it all collapses, pardon the pun.

#33 sciencemonkey on 04.18.14 at 8:03 pm

@26 Mel
Reporting the gains can be tricky, and I think the IRS considers it a trust. I will ask my US tax accountant when I hopefully see her in a week.

#34 mark on 04.18.14 at 8:21 pm

Good lord!

#35 LJ on 04.18.14 at 8:21 pm

Lesson #1: Don’t buy a semi. Your neighbours are a hazard!!!

Lesson #2: When you buy a semi, you can’t do anything with it and there is no re-sale value except as a semi.

Lesson #3: Never undermine a foundation unless you want to be homeless.

Lesson #4: A Million dollars is just too much to spend for a roof over your head.

Lesson #5: Always carry enough insurance.

#36 WTF(Where's Terry Fudge) on 04.18.14 at 8:25 pm

# 31 Shawn
Try using any card during a power outage , good luck to you !
“Cash is King!”

#37 dreamingintechnicolour on 04.18.14 at 8:26 pm

Canada Will join Germany as country where Most people to rent their home, This May happen within 10 years or less

#38 T.O. Bubble Boy on 04.18.14 at 8:27 pm

This week’s “Financial Facelift” is downright scary:
http://www.theglobeandmail.com/globe-investor/personal-finance/retirement-rrsps/the-plan-mortgage-free-by-40/article18067316/

Age 27, combined $200k income
Baby on the way, so $75k is about to dissapear
$850k house with $720k mortgage!

Their “plan” is based on his assumption that his $130k management consultant salary will go up 15% every year!

This may be one of the most naive articles yet… and I’m not even focusing on the fact that management consulting leads to a high number of burnouts and divorces!

#39 -=jwk=- on 04.18.14 at 8:31 pm

They have a 3 month old baby. Are they sure “3,290 Sq Feet Of Living Area” *plus* a basement will be enough? Might be tight. Where will they put the changing table?

#40 -=jwk=- on 04.18.14 at 8:36 pm

Now that I have looked at the before pictures, I am even more confused. Finished basement with an apartment. main floor kitchen is old, 2nd floor apartment kitchen also old. Update the kitchen. Move in. Why were they gutting such a beautiful home? Rip up the hardwood to install laminate? (good enough for the floors, but not the kitchen counter top!)

#41 Freedom First on 04.18.14 at 8:40 pm

Good Bones. But “Unused Brains”=young morons.

Great post Garth, and thanks for the revealing pics, which together, once again, show us that truth is stranger than fiction.

Matt and Krysten have an interesting time ahead of them now, as they deal with the various Insurance Companies, Utilities officials, City Officials, various Lawyers, various Contractors, Bankers, CMHC, and on and on and on and on. Oh well, such is life, these things happen.

Garth. Most unfortunate for Matt and Krysten. On the bright side, I am guessing that this post today will same some people from the same fate.

Another example of why I like being: liquid, diversified, balanced, and debt free. Oh, and equally important, always, always, always, keep it simple.

#42 Freedom First on 04.18.14 at 8:41 pm

oops, should read…..save some people

#43 Bill Gable on 04.18.14 at 8:48 pm

In the Sixties I visited houses in this area and thought they were blow downs.
In the Seventies, I wound up living in Kingsway (as West as you can get, before Etobicoke) – because the blowdowns in Little Italy – 1/had zero appeal and 2/it was like Long Island, without the Billy Joel Soundtrack.

People have to be certifiable to pay these prices and the CHMC folks, Bankers and R/E “Professionals” are going to get the Eddie Shack treatment, sooner, or later. (* heh, look it up).

#44 WhiteKat on 04.18.14 at 8:48 pm

@ Mel re: #26 “Garth, if one is a US citizen, can they open a TFSA here in Canada? And if they can, unlike Canadian citizens, they’d be obliged to declare any gains/income? Thanks. ”

People born in USA, are as you say, ‘UNLIKE CANADIAN CITIZENS’. USA law trumps Canadian law, so if you are a Canadian with a US birthplace, you are no longer a Canadian apparently, or at least you don’t have the same rights, as I am just discovering.

Unlike Canadian citizens who are born in Canada, Canadian citizens who are born in USA are subject to USA tax laws even though they live and earn only in Canada, and even if they have lived entire lives in Canada unaware of the American anomaly of citizenship based taxation.

Ignorance is no excuse for not following US law regardless of the abnormality of the law, and inability to justify it; US law is the law is the law. And the USA is big and scary.

Canadians who are considered by US law to be US taxpayers do not benefit by having TFSAs, RESPs or RDSPs, and have a lot of other tax complications and impediments in their struggle to save and prepare for retirement. US citizenship reigns supreme regardless how you acquired it, regardless of other citizenship, regardless where you live, regardless where you earn, and regardless where you heart is.

#45 T.O. Bubble Boy on 04.18.14 at 8:50 pm

I guess it could be worse… you could be hunting for a $1M apartment in Manhattan:
http://www.nytimes.com/2014/04/20/realestate/the-million-dollar-manhattan-apartment.html?_r=0

#46 omg on 04.18.14 at 8:53 pm

MAKING MONEY FLIPPING HOUSES IN TORONTO

So what with all the ridiculous transaction costs in Toronto (property purchase taxes, realtor fees) do people actually make money on the renovation they are doing on houses in TO or are they just riding-up the market appreciation?

Here in Victoria, where we have an extortionary property purchase tax and of course $30,000 realtor fees, there does not seem to be a lot of flipping going on since prices started stagnating/declining 4 years back. Hard to flip when prices are stagnant, and it costs you $45,000 in fees just to buy/sell the house.

#47 OttawaMike on 04.18.14 at 8:54 pm

#31 Shawn

Only in Canada does one have to line up and wait while some idiot buys gum with a debit card.
I have returned to cash in the interests of saving transaction time and not being at the daily mercy of an IT network.
Japan, one of the most Tech advanced nations on Earth, uses cash almost exclusively with loadable smart cards for small vending machine or transit fare purchases.

#48 shocked! on 04.18.14 at 8:56 pm

We have been specuvesting for the last decade in the downtown area of Burlington…with tremendous success…renovating mid century homes and selling them in a matter of weeks, if not days! People have a strong desire to be in the “cool” location, and are willing to pay top dollar, …because money is cheap and the “right” address rules. We are well aware that this will end. In fact, our latest project may be the final one… Specuvesting requires skill and knowledge, much like any other profession…what amuses us is the number of “specuvestors” who think it’s easy money…nothing could be further from the truth! Still, it’s been an interesting and fruitful ride:)

#49 David B on 04.18.14 at 8:57 pm

Vancouver, targeting ending homelessness by 2015, now realizes they have a perfect storm to do the opposite.

“‘Worst case’ scenario expected for homelessness in Vancouver”
http://metronews.ca/news/vancouver/1006029/worst-case-scenario-expected-for-homelessness-in-vancouver/

Some politicking to get other levels of gov’t involved but:
– SRO conversions
– fixed welfare rent
– coop subsidy funding ending
– PHS scandal scaring away donations
– new unit delays
– real estate costs ratio to incomes
– old rental houses converted to condos
– almost no new rental construction in years
– absentee owners leaving vacant units
– etc

Not to mention the simple question of where low income workers are expected to live. If they’re not replaced by Temp Foreign Workers…

#50 Freedom First on 04.18.14 at 8:57 pm

#31 Shawn

Every so often I see a comment that is so far beyond stupid, that I give the person responsible a well deserved “Idiot Post Award”. Shawn, you earned it.

. It has been a long time since I have handed out this award to anyone, so Shawn, I would expect that you probably won’t even see how stupid your comment is, nor just how stupid on so many different levels.

Smoking Man, could you explain to Shawn why he won the Award? You are so much more eloquent than I am on any day of the week.

#51 takla on 04.18.14 at 8:58 pm

A buddy who insists in staying in his 70 yr old ,dilapidated home is starting to come around I think.Was by for a visite as he was finishing up mowing his lawn yesterday,he was beat,and sick as hell as he explained he’s sure its the asbestos ,mold,in his house that’s making him sick all the time.This guy has 3-4 lung infections every yr.His roof is now leaking ,hot water tank dripping,and the good old bank just took the house up the street as the owners couldn’t sell.most anything local that sells will go for 30 % under municipal appraisal or it sits ,He’s getting scared!!

#52 Silver on 04.18.14 at 9:01 pm

great photo of the side of the house…

mortor was shot, lime washed out… big time.
…bet the basement was to short for him and they were digging out the basement to add a foot,… look at the bar.
moisture issues in the basement photos.
problems so visable…
nice tinsel finish… was this to a bidding war???
million leavered dollars……

Silver

#53 T.O. Bubble Boy on 04.18.14 at 9:08 pm

@ #35 LJ on 04.18.14 at 8:21 pm
Lesson #1: Don’t buy a semi. Your neighbours are a hazard!!!

Lesson #2: When you buy a semi, you can’t do anything with it and there is no re-sale value except as a semi.

Lesson #3: Never undermine a foundation unless you want to be homeless.

Lesson #4: A Million dollars is just too much to spend for a roof over your head.

Lesson #5: Always carry enough insurance.
———————————

Yes, yes, yes, yes, and yes.

#54 Pre Retiree on 04.18.14 at 9:14 pm

To Mike the engineer.
Apparently, the buyers did not get the inspection themselves since the Carson and Dunlop report was advertised on the realtor website. It also does not say what was in the report. As we saw in previous blogs, many don’t even listen to their own inspectors. Watching the CTV video is very interesting when it comes to talks about underpinning, city inspector visits, and so on. The lawyers must be watching this episode with dollar signs in their eyes as they will be the only winners in this story.

#55 Snowboid on 04.18.14 at 9:15 pm

#19 Old Man on 04.18.14 at 6:35 pm…

I agree, my childhood home was built in 1907, and back in the 1960s it was starting to slant towards the steep front yard.

A massive effort with steel supports and jacks in the basement leveled it out, but there were cracks everywhere as a result.

BTW, it was recently listed for $ 2.4 million!

#56 Mrs Hubris on 04.18.14 at 9:25 pm

#13 No bubble in Canada’s housing market

I am not sure if the title of this post is ironic. Sal Guateri is a senior bank economist who will never fail to qualify any statement on the housing market with his version of, ‘of course, it’s different in Canada’.

An interesting exercise is to put ‘Canadian Housing Bubble’ into Google and observe just how many media- regurgitated and Canadian bank, government and industry denials appear. The orchestrated choir today delivered the first six. Lower down however, are more independent voices; Pimco, the Financial Times and independent and respected bloggers such as The Motley Fool and Zero Hedge. These all join the IMF, Deutsche Bank, the OECD and the Economist in looking in from outside and all observe, Canadian fundamentals don’t support current real estate prices. This divide between vested interests and objective observers says much in itself therefore when the IMF, Deutsche Bank, the OECD and the Economist finally tell me the same as Sal Guateri, I will then believe I am actually hearing the truth. It won’t be soon however.

#57 Smoking Man on 04.18.14 at 9:30 pm

Looking at the posts from a few days back. Man did I get chirped…this is a finance blog, your a troll, bla, bla……

When I see you big moves coming, I graciously share, not a hog…. What do you want me to talk about l between the nothingness. Do I join the basement dwellers… We’re all doomed.

No, I won’t go there, I try and improve my writing, over come my handycap.. I tell stories with a bit of salt, pepper and philosophy between the bread.

I won’t stop, see I got bit more than 27 fans a lot more.. And they come here for the ego maniac, the loon.

Better to be a big rock hitting the ocean during a rain storm than a rain drop.

What’s a troll?

#58 Habs76-79 on 04.18.14 at 9:35 pm

#31 Shawn,

Here is the problem with your using ONLY debit cards.

Scenario #1:

We are at a local farmer’s market. We observe the following. A guy has $10.00 cash and buys say $10.00 worth of potatoes from a vendor. He hands the vendor $10.00 cash and walks away with his potatoes.

Later the vendor goes on about and finds a fancy garden rake for $10.00. He gives the vendor of said rake the $10.00 cash, walks away with the rake the the vendor has the $10.00 cash.

Now this guy decides to buy lunch for himself and his wife at the fast food vendor on site. He spends the $10.00 cash gets lunch for both. The fast food vendor now has the $10.00 cash.

Three transactions, each for $10.00. The same $10.00 cash was used and all persons are happy. $30.00 in total sales.

Scenario #2:

Debit card version.

We are at a local farmer’s market. We observe the following. A guy buys say $10.00 worth of potatoes from a vendor. He uses his debit card and pays $10.00 and walks away with his potatoes. Now first his debit card probably has a fee charged back to him for using it. But the vendor DID NOT get $10.00 for the potatoes. He probably was dinged say 3%, so in reality he got only $9.70 for the potatoes. The middleman got $0.30 just to process the simple sale.

Later the vendor goes on about and finds a fancy garden rake for $10.00. He too uses his debit card for said rake. He pays and walks away with the rake again he probably pays to use his debit card but again the rake vendor DID NOT get $10.00. He too paid a fee of probably 3% on the transaction and git $9.70. The debit card middleman made $0.30 just to process this sale too.

Now this guy decides to buy lunch for himself and his wife at the fast food vendor on site. He spends the $10.00 on his debt card and gets lunch for both. The fast food vendor again only got say $9.70 as he has to accept the say 3% fee to take the debit card. The middle man got his $0.30.

Three transactions, each for $10.00. Debit card used all thee times. The vendors ate $0.30 each to accept the debit cards. This is equal to 3% inflation on each transaction as compare to using only cash. But also the buyers likely will pay fees out of their bank account to use the debit cards too. These fees will vary from person to person. The middle man makes $0.90 just for processing a simple electronic transaction. EASY MONEY for them, but in reality its insidious inflation and consumer laziness. $30.00 in total sales but the vendors in total get $29.10 to split between them.

There is a place to use debit cards. I do not suggest for safety reasons anyone to walk around with hundreds of $$$ in their wallets, but for any transaction say under oh even $50.00, debit cards are really TOXIC ! IMO.

#59 Shawn on 04.18.14 at 9:40 pm

A winning Post

My post at 31 was a winner as it drew some comments. And what else, after all, would be the point of writing opinions anyplace if not to get a reaction?

Said WTF:Try using any card during a power outage , good luck to you !
“Cash is King!”

Yeah, stores close up during power outages which in any case are very rare except apparently in Toronto. In Alberta we don’t have that problem.

Cash in the form of currency is nearly done for in this country. Some places already refuse $100’s which are the equivalent of $10’s from 60 years ago.

I run a side business that took in $113k last year. None of it in currency. None! 90% was PayPal and 10% cheques.

Various cards are replacing the old style cash for tiny purchases.

Stop and think about how much of a typical gross pay gets converted to cash currency. First some 40% or whatever is electronically lopped off for income taxes, payroll taxes and pension contributions. Then maybe the mortgage and car payment. Then lots of bills paid electronically. Then debit card purchases. Credit card purchases and then pay that electronically. Perhaps a few cheques written. How much actually gets pulled out of a cash machine or at the Teller? I’d guess under 10% and declining all the time.

If you are living in a “cash” world, that’s fine. More power to you. But you are a minority by far. Physical cash is on the way out. Sorry, jar lady.

Consider. Warren Buffett at Berkshire keeps $40 billion in cash on the balance sheet. There’s probably about $4.00 of that in actual cash, because even the petty cash fund is a credit card these days.

Some people recognize the truth when they see it. Other’s not so much.

#60 gladiator on 04.18.14 at 9:41 pm

@51 takla
Asbestos is dangerous only when handling it. After installing and painting, it is no longer a threat – until the moment you have to remove it, that is.

#61 Shanks on 04.18.14 at 9:42 pm

Always off topic… Anyone watching deflation? It’s getting serious.

I watch lots of things, for example used teak furniture: for a long time it was going up and up (like houses) them leveled off in price and now has started to drop. Things stay up for sale longer etc.
Same thing with used music gear, things are 50% cheaper than even a year or two ago. And still sit for weeks on end without selling. Who has music gear? College kids with no money, old timers with day jobs, young working people with no expenses (ie single lol). Everything is getting cheaper on the used market.

Now, compare with toilet paper, it’s been going up and up and I can guarantee you that it will not deflate like music gear or teak furniture. Same with gas, food too.

I sure am glad I bought lots a few years ago, it’s like I wipe my butt and count my dividend savings daily. That and all that pre fukushima food i stored up :)

Call me a doomer if you want, but the value of the things you own already is deflating, while the price of the things you need is inflating. This is reality!

#62 Chickenlittle on 04.18.14 at 9:44 pm

WOW…..I know someone that lives in those new “homes” right across from the wreck.

It’s funny because he cut the wall open to install something and found that the builders only insulated half the wall. He was furious! He paid a lot of money for that place and to find the wall only half insulated…well…you know.

New or old, it doesn’t matter. Old, crumbling foundation, or new, half ass construction. Pick one. They both suck.

#63 Harbour on 04.18.14 at 9:46 pm

#55 Snowboid on 04.18.14 at 9:15 pm

BTW, it was recently listed for $ 2.4 million!
…………………………………………………………………….

The utter stupidity at what a cracked, leaning POS will sell for. It’s beyond ludicrous.

#64 diana on 04.18.14 at 9:50 pm

Location and alone is worth at least 900k. Just tear it down and build 2 new ones.

#65 45north on 04.18.14 at 9:50 pm

The Christies began their renos a few weeks ago, which included getting a crew downstairs to dig out the medieval basement.

never dig out your basement!

Shawn : Insured? Really?

What insurance would that be? I doubt that homeowner insurance would cover this.

me too (I doubt that homeowner insurance would cover this). I mean unless the policy explicitly mentioned work on the foundation, digging out the basement.

Victoria Real Estate Update (from yesterday) : By 2006, the household debt-to-income ratio in the US was far above its long term mean , along with house prices. By 2008, the household debt-to-income ratio in the US began its inevitable decline and this coincided with big price declines in US house prices. The same will happen in Canada. Victoria’s big price declines will happen as Canada’s (record high) debt-to-income ratio falls.

It may already be happening. the real estate industry makes it hard to tell

#66 test on 04.18.14 at 9:57 pm

#38 T.O. Bubble Boy on 04.18.14 at 8:27 pm
This week’s “Financial Facelift” is downright scary:
http://www.theglobeandmail.com/globe-investor/personal-finance/retirement-rrsps/the-plan-mortgage-free-by-40/article18067316/

Age 27, combined $200k income
Baby on the way, so $75k is about to dissapear
$850k house with $720k mortgage!

Their “plan” is based on his assumption that his $130k management consultant salary will go up 15% every year!

This may be one of the most naive articles yet… and I’m not even focusing on the fact that management consulting leads to a high number of burnouts and divorces!

I would let him manage my toilet. He is not able to manage his own finances. This story smells fake

#67 Happy Renting on 04.18.14 at 10:06 pm

Reading this made me want to throw up. I can only imagine the degree of digestive upset the owners have been experiencing. Assuming they can still afford food. (Shudder.)

#68 Obvious Truth on 04.18.14 at 10:10 pm

Don’t these houses need to be appraised.

Should this really just lie in the laps of the owner.

During the financial crises appraiser actually had to view the place I bought and it took a few days before the bank cleared it. They actually called when the appraisal came in ok.

Wonder if they bother anymore.

#69 sheane wallace on 04.18.14 at 10:12 pm

Deflation?

House like this for 1 million? OMG.
That paper we have in our pockets is totally worthless.

Apparently ‘crash’ of 10 % in the housing prices would cut the growth of our economy by 50 % (1 % out of 2 which considering the real inflation is actually not a growth but a decline and signifies a recession) and could not be afforded .

How about 60 % decline (it will come in 1-3 years, just stop CMHC) ? We are moving right into 2-4 percents annual negative growth.
This can not be allowed.

So we keep betting on a losing hand with bigger and bigger bets until there is nothing left to pledge and the currency collapses.

It is an absolute certainty.
Of course the banks will be saved, they apparently do matter while our savings do not.

#70 NS in Calgary on 04.18.14 at 10:12 pm

#50 Freedom First on 04.18.14 at 8:57 pm

Not that I agree with Shawn but it certainly isn’t that bad. He usually has some food for thought.

#71 Happy Renting on 04.18.14 at 10:17 pm

RE: cash debate

My experience over the past year is that non-chain businesses still LOVE cash. I’m guessing there’s a second set of books being kept (sometimes I’m offered a discount roughly equivalent to the sales tax if paying cash). Of course, there’s no transaction costs to pay, which must make some difference to businesses where margins are tight. I haven’t have any of the new $100 bills turned down when offered, unlike the old $100 bills (I imagine that will slowly change as counterfeiters catch up en-masse to the new bills.)

#72 rosie "moving forward" in the knowledge that, "this won't end well" on 04.18.14 at 10:17 pm

So sad for the hipsters. This would have helped but nobody reads anything longer than a 140 characters anymore.

http://www.lakesidepress.com/dreams/contents.html

#73 NS in Calgary on 04.18.14 at 10:25 pm

#59 Shawn on 04.18.14 at 9:40 pm

What’s your side business? Any ideas or opportunities?

#74 sheane wallace on 04.18.14 at 10:30 pm

Does somebody believe that we could see:
$ 10 per gallon gas ($2.60 per litre)
$ 4 for a coffee
$ 8 for a bread
in the next 3-5 years?

I would put the probability for the above at 80 %.
Of course the official CPI would be at 1.7 %

#75 Smoking Man on 04.18.14 at 10:39 pm

Dialog from the Road Trip.

SMW=Smoking man’s wife
SM=Smoking Man.

SMW:
Dame it, I think I left my glasses in NYC.

SM:
Honey you’re always losing shit, you never put your stuff in the same spot, being organized is a habit, have a certain place for stuff, you don’t even need think when it’s a habit.

SMW:
F-you you drinken piece of shit, I had to stop you from urinating in the corner of the room last night, remember in Vegas when you walked into the hall naked and peeing on the door across the hall. Don’t lecture me on any thing you Dog. After you went bed I got a knock on the door for security… It was humiliating….

SM:
Change subject huh, 5 cell phones a year, 2 iPads this year. At leased 10 pairs of shoes.
I get hammered once in awhile to inhance creativity for my writing and you, you blowout way out of proportion. When did you become such a snob.

SMW
YOUR WRITING!!!! , dear god, I read your garbage on the computer, that’s not writing, your insane.. No one will every buy that… Chapter 2, you get God in a head lock, then he turns you into a zit, on a fire ants head. Really… I married a Crack pot.

SM:
Took you 31 years to figure that out… Who’s the loon now.

SMW:
I NEED YOU TO FIND ME A PHARMACY Now!!!!

#76 Sebee on 04.18.14 at 10:47 pm

DELETED

#77 Norman on 04.18.14 at 10:49 pm

I live down the street on Roxton, about 5 minute walk from those houses, all the houses around here are old, most over a century, and past their expiry date, how long can beams of wood last? and yet, I have never seen any for less than &700 grand.

#78 waiting on 04.18.14 at 10:56 pm

I wonder what will happen to the poor guy who lives on the other side. He’s out of a home for now due to no fault of his own. Will there insurance cover him? If not, there’s a big lawsuit waiting to happen.

#79 Shawn on 04.18.14 at 11:04 pm

Makin’ Money

73 NS in Calgary asks:

What’s your side business? Any ideas or opportunities?

*******************************************
It involves investment advice. Let’s leave it at that.

I am not here to advertise, and Garth does not allow it, which is fair.

#80 Smoking Man on 04.18.14 at 11:04 pm

Americans are dumb as shit, I slay my Grey hair buds with a buzzer, they scream we want to live,, nooooo

Have a weeks worth of goti, they think I’m braking bad guy…

Can we have a picture, they ask…

Sure, see that 18 year old scotch, drink first..

Idiots…….

#81 tkid on 04.18.14 at 11:24 pm

Why bother carrying cash if everyone takes debit?

Paying $1.50 in debit fees for a $1.50 cup of coffee is foolish. Carry around a toonie or two and do not pay twice as much as everyone else for a cup of coffee.

#82 Drill Baby Drill on 04.18.14 at 11:28 pm

I doubt very much they are insured for this mess let alone the damages to their common neigbor and the adjacent neigbor’s dwellings as well. This is a fiasco for them and thier unfortunate neigbors. But then I am sure the realtards knew about the sub-par foundation because they are such an informed lot on what they are actually selling. NOT !!

#83 BG on 04.18.14 at 11:34 pm

Modern houses in all North America seem to be made of cardboard.

Go to Europe and you will see how house should be built – to last.

#84 young & foolish on 04.18.14 at 11:43 pm

It’s not your grandads economy anymore ….. money is cheap, new millionaires are sprouting daily, and it’s the financialization of everything.

#85 Cash v. Credit on 04.19.14 at 12:02 am

Rude and insulting comments about others might make for entertainment on this blog but they are not necessary to make a point.

Beware specious and unsupported arguments about all sorts of economics topics on this blog – including those about cash being a greater generator of economic activity than credit.

The various measures used to calculate The Money Supply in an economy and its estimated Velocity Of Circulation are thought to be important determinants of the level and direction of price inflation as well as total economic activity.

For those interested in learning about money (in the context of economics) try –

http://www.economist.com/topics/money-supply

Alwyn

#86 blobby on 04.19.14 at 12:06 am

Just heard a radio interview with Vancity, where they said that “because young people cant afford deposits on homes”, they’ve decided to help them.

By LOANING half the deposit!!!!

The “Vancity Down Payment Helper Mortgage”… Guy on radio was very happy saying “now people can afford to buy!”

No… They.. Bloody.. Cant!

If they CANT AFFORD THE MEASLY DEPOSIT needed, then they CANT AFFORD the home…

How on HELL do they think kids can afford mortgage repayments if they cant even scrape together the deposit!?!?!

Made me so angry at the state of everything.. Then it occured to me, they’re doing this out of desperation.. New mortgages must be WAAAY down!

https://www.vancity.com/lang/fr/lang/fr/SharedContent/documents/MortgageHelper/down_payment_fact_sheet_2014.pdf

#87 sciencemonkey on 04.19.14 at 12:11 am

Future Smoking Woman

https://i.chzbgr.com/maxW500/8148661760/hE6401F03/

#88 koala on 04.19.14 at 12:29 am

I like the SM SMW post it is funny. I am glad SM is here.

#89 drydock on 04.19.14 at 12:52 am

#75 Smoking Man

Thats humorous, made me laugh.

#90 Cici on 04.19.14 at 1:07 am

OMG, what’s truly frightening is that the Roxton home appears to be way better-built luxury in comparison to the Ellsworth dump…the take-away? – If you are going to pay nine times more than the real value of a home’s worth, make sure you don’t renovate it, or slam the doors too hard behind you…

Timber!

#91 Potemkin on 04.19.14 at 1:15 am

haha SM… you crack me up… good thing you are lovable.

#92 chapter 9 on 04.19.14 at 1:31 am

#31 Shawn
There is a tendency to over spend using plastic “play money” maybe that is why credit counselors recommend sticking with cash unless a debit card is absolutely necessary. When you physically pull the cash from your wallet you may think twice about impulse or recreational shopping. maybe tune into the tv shows “Money Moron” or “Till Debt Do Us Part’ to see first hand the financial train wrecks out there.

#93 Dr. Wu on 04.19.14 at 1:47 am

medieval? worse, 19th or early 20th century.
no one underpins medieval foundations, they look like bell bottom pants, wider at the bottom, that’s why they’re still standing

#94 Cici on 04.19.14 at 1:55 am

#11 lurker

I do get your point, but this isn’t an isolated case, especially not in Toronto, where many of the homes are ancient and weren’t properly built in the first place, and even more poorly maintained. This blog has covered others, including this one: http://www.therecord.com/news-story/2606027-demolition-begins-on-partially-collapsed-toronto-home/

In Quebec, there have been some problems with sinking foundations cause by erosion of the earth underneath them.

In any case, as the RE stupidity circus continues to chug along, I’m sure we will be seeing more and more of such cases.

#95 Vik on 04.19.14 at 2:10 am

Reminds me of a similar reno job gone bad in the Dawes/Danforth area of T.O. City tears down the
house and sticks the owners with a $100k demolition bill.
Here’s the story:

http://toronto.ctvnews.ca/couple-s-renovation-nightmare-is-demolished-1.325273

http://www.youtube.com/watch?v=2SOQmyQgA3o

#96 Fiendish thingy on 04.19.14 at 2:16 am

To those born in the US but raised in Canada, you can renounce your US citizenship for $450 and no other penalty, as long as your net worth is below $2 million and avg income below $150k for past 5 years, AND you’ve notified IRS of your foreign bank accts.

Do your due diligence…it might be worth it.

#97 Comment nr 75 just after smoking man on 04.19.14 at 2:46 am

Wow, can see why they feel in love with it, showed really beautifully!!!

#98 devore on 04.19.14 at 3:21 am

I seriously doubt there was any insurance. These flippers cut any and all corners, because expenses such as that eat into profits heavily. Even if they did, what kind of insurance covers an event like this? Likely, any insurance they have is either woefully inadequate or void due to any number of reasons. No, this will be up to the contractor’s insurance, assuming the company hasn’t folded and re-opened under another name already. I see many lawyers and billable hours in this couple’s future.

#99 JWD on 04.19.14 at 3:26 am

Fantastic post Garth. Real life horror story. So 1 Million for half a haunted looking house? Now about 3/4 of half a house. Friggin unbelievable. I remember visiting a friend in Toronto near downtown living in a pretty nice brownstone walk-up back in about 2003. The place was roughly about 450k back then. Guessing 1.6-1.8 m now? Ridiculous. These cities like Toronto and Van need to get real. “Everyone wants to live here”. Ya right. I would be shocked if the bottom didn’t fall out within a year. Of course, this has been going on for over a decade now. But when it turns, it should be something special.

#100 What housing bubble? on 04.19.14 at 3:35 am

#56 Mrs Hubris on 04.18.14 at 9:25 pm
#13 No bubble in Canada’s housing market

> I am not sure if the title of this post is ironic.

Yes, it was meant as ironic, but now I’m not sure. Had a chat with a friend who just bought a house. For the last few years he waited for the prices to drop while leaving in a crappy apartment with a wife and two kids. He wanted to buy a house in a better area, and he finally did – soon after I gave him the link to this blog (to support his decision to rent and wait).

I’m not a renter myself, so don’t know what’s available in Toronto and for how much, but have no reason not to believe him. He says that the 4 bedroom house that he just bought will actually cost him LESS per month than his current rent (2-bedroom apartment in an old low-rise building with creepy neighbors and superintendents taking forever to fix a leaky facet or another problem, so most tenants just do it themselves).

I didn’t ask for the numbers, but he said that as long as him OR his wife have a job – they’ll be fine (I.e. they don’t need two incomes to carry the house). And what surprised me the most – he said he’ll be happy if house prices go down. He seems to have it all figured out: he’d buy a cheaper house for himself then, tear down this house, build two semis (it’s a 50′ lot – in the city, near subway!) and either rent them out or sell them.

So I don’t know. When I started reading this blog – it made sense to me. But since I struggle to make any sensible investment at the moment (as stock markets are also overpriced), sometimes I wonder – so, what’s the alternative? To sit with cash on the sidelines for a few more years? Reading this pathetic blog like a celebrity gossip column – feeling good about myself that I’m not an idiot like them? While smart people keep making money – in any market…

#101 Exurban on 04.19.14 at 3:38 am

Strange exchange about debit cards and cash. I had a conversation with some grocery clerks a few weeks ago (Urban Fare, Davie & Pacific, Vancouver — a busy store). They told me that the large majority of transactions are debit and credit cards, and sometimes a couple of hours would pass on a shift before a customer proffered cash. I get the distinct impression that many of the posters here really do not know about profound changes going on around them.

#102 devore on 04.19.14 at 3:49 am

The middle man makes $0.90 just for processing a simple electronic transaction. EASY MONEY for them, but in reality its insidious inflation and consumer laziness. $30.00 in total sales but the vendors in total get $29.10 to split between them.

Yes, it’s so easy, everyone is doing it. Oh wait, they are not.

One of the things you learn in life as the old odometer ticks away, is that if something looks easy, it is 99.99999% because the person(s) doing it are busting their butts and dedicated years or more to mastering it.

Having been professionally involved in communications and telecoms or various types and sizes, I can tell you the average person has not a clue how their voice gets across the country in a fraction of a second, but they will be the first to spout off how easy all this Internet stuff is and how they would fix it all in a day, and make it free to boot.

The fact that you can wave a piece of plastic anywhere in the world and walk away with a meal or merchandise a couple seconds later is nothing short of amazing, and you have no clue what goes into making it all happen.

Personally, I use CC to pay for everything, even Timmy’s coffee, because

A. It’s free (when was the last time you got a cash discount at Walmart or Best Buy or Timmy’s or the local DMV?)

B. It’s an interest free loan for a month.

C. Consumer protections, such as automatic insurance, returns and charge backs.

D. Safety. If someone steals my CC, it will cost me nothing, except a bit of time and inconvenience.

I’d rather be “stuck” behind some waving their CC at the machine than someone counting out change in coins and bills.

#103 World Traveller on 04.19.14 at 5:48 am

#75 Smoking Man on 04.18.14 at 10:39 pm
Dialog from the Road Trip.

*****

Yeeesh, what the hell???

#104 Muttley O'Toole on 04.19.14 at 5:53 am

#75 Smoking Man – you crack me up.
Tell me, why doesn’t SMW say “That’s it; I’m outa here.”
I’ll bet it would cost you a pretty penny.

#105 juno on 04.19.14 at 6:04 am

This is the new FAD for the hipsters. Its a duel purpose house. You can live in it and the get buried alive in it.

Dual functionality. For only a Million bucks.

That house is toast. Some of those older house share the same foundations as its neighbour.

I had a Century + old house and had a foundation that was shared by my neighbour. Also those old houses sometimes have wooded foundations thats why the basements are basements and are only good for storage.

I don’t feel for stupid people. Lazy people that doesn’t do their research deserves what they get. Too bad our sad school systems teaches our kids how to become dumbasses

#106 Ontario's Left Coast on 04.19.14 at 7:30 am

Wow, I’m admittedly in a secondary-cum-tertiary market and therefore get major sticker shock whenever I hear these house prices but, holy man, who would pay the better part of $1M for a semi-detached piece of garbage like that? I don’t care where it’s located, these folks are really going to live to regret these ridiculous purchases. Gladly enjoying my morning coffee sitting in my fully detached starter home, purchased 18 years ago for $132,000. Plans to trade up to the next level: None.

#107 sheane wallace on 04.19.14 at 7:50 am

#86 blobby

That is the price of democracy – if you live amongst insane and you are normal, it is your problem.

Why is Vancity in the business of housing? Because they want higher revenue from property taxes and if the tax base collapses their benefits will collapse.
It is moral crime and they should be punished, unfortunately in the land of the free we live in one can not refuse to pay property taxes.

It is a cooperative you live in and if that cooperative is comprised of insane and compulsive gamblers I strongly urge you to leave, trying to fight them like Garth is a noble but lost cause. It is the proper moral stand but you we all will be forced to pay the price one way or another.

Unfortunately

#108 World Traveller on 04.19.14 at 8:54 am

Unfortunate situation for those in the Peel region. Harper and Wynne can continue to stick their fingers in their ears and sing LALALALA like nothing bad is happening.

http://www.thestar.com/news/gta/2013/04/06/peel_transformed_from_middleclass_suburbia_to_income_extremes.html

#109 Angie on 04.19.14 at 9:26 am

Holy mother if cow, we are screwed.

#110 Stickler on 04.19.14 at 9:29 am

HGTV needs to make the house issue and renno into a show. Problem solved.

#111 WhiteKat on 04.19.14 at 9:40 am

@96 FiendishThingy re: ” To those born in the US but raised in Canada, you can renounce your US citizenship for $450 and no other penalty, as long as your net worth is below $2 million and avg income below $150k for past 5 years, AND you’ve notified IRS of your foreign bank accts. Do your due diligence…it might be worth it.”

It’s A LOT more complicated than you make it sound. I know, I was born in US to Canadian parents (thus dual from birth), and have lived in Canada as a Canadian since I was one year old. I have researched this topic to death, and done my DUE DILIGENCE. There is NO easy way out for me and many others.

You can checkout anytime you like, but you can never leave UNLESS you check out with UNCLE SAM TOO. This means you must have five years worth of US tax compliancy under your belt, which includes more than just filing FBARS for your foreign (aka Canadian accounts).

Uncle SAM does not welcome back wayward US taxpayers with open arms, and a pat on the head. To catch up on back tax returns, risks bankrupting penalties for prior non-filing, and requires careful consideration as to the approach one uses to get back into Uncle Sam’s good graces. Even those few lawyers who are expert on the subject (I know of only one I would trust), admit that it is a crap shoot, and that there are no clear answers, only least worst options.

In addition, even IF you manage to join the US tax payers’ club without incurring penalties for past delinquency, if you have lived a whole life in Canada, you will spend a small fortune, and a lot of LCU’s (life credit unions) marrying the Canadian tax system with the American tax system in your efforts to become US tax compliant.

Anything NOT American is considered Foreign by USA; therefore automatically ‘bad’, and subject to complicated reporting, and confiscatory taxation. For example, CANADIAN mutual funds are ‘Passive Foreign Income Corporations’ and absolutely toxic for a Canadian who is also a ‘US person’ to have.

It is less complicated and less costly for younger people without a long Canadian financial history behind them to catch up on US tax returns, but even they will discover eventually, that they just cannot invest in their financial future very effectively with the noose of US citizenship around their necks. Hint: if you are a YOUNGISH CANADIAN born in USA, and are pretty sure you will never want to live in the USA, seriously consider renouncing US citizenship formally, now while the task is relatively easy.

For more information (including locations and dates for information sessions to help you decide how to proceed), visit:
http://isaacbrocksociety.ca/
http://maplesandbox.ca/

#112 WhiteKat on 04.19.14 at 9:47 am

oooops. LCUs = Life Credit Units (not Unions). I would so love to post one comment here that does not have a typo.

#113 T.O. Bubble Boy on 04.19.14 at 9:53 am

@ #81 tkid on 04.18.14 at 11:24 pm
Why bother carrying cash if everyone takes debit?

Paying $1.50 in debit fees for a $1.50 cup of coffee is foolish. Carry around a toonie or two and do not pay twice as much as everyone else for a cup of coffee.
————————

There are many bank accounts that allow large numbers (and, even unlimited numbers) of transactions per month… no one (even those who can’t afford an “unlimited” account) should ever be paying $1.50 in txn fees to buy a $1.50 coffee.

#114 frank le skank on 04.19.14 at 10:10 am

A few people commented that the a house from 1890 which recently collapsed was not properly built? What’s the expectation for a house built 124 years ago? I wonder if the new owners of this house had a building permit, and had an inspector come in? You shouldn’t dig up a basement without a structural engineer performing an inspection.

#115 Son of Ponzi on 04.19.14 at 10:32 am

#101 Exurban on 04.19.14 at 3:38 am
Strange exchange about debit cards and cash. I had a conversation with some grocery clerks a few weeks ago (Urban Fare, Davie & Pacific, Vancouver — a busy store). They told me that the large majority of transactions are debit and credit cards, and sometimes a couple of hours would pass on a shift before a customer proffered cash. I get the distinct impression that many of the posters here really do not know about profound changes going on around them.
————————-
Many Chinese restaurants in Vancouver/Richmond are cash only.
Are these the “profound changes” that you are talking about?

#116 Island renters on 04.19.14 at 10:34 am

Garth- don’t know the insurance rules relating to semis, but we rented 1/2 of a duplex here in bc. Our landlord had bought 3 properties & ran out of cash. So he stopped paying the insurance on the duplex. Obviously you can’t insure half a house, so the policy for the couple who owned the other half was void. He also refused to pay for a new roof, despite the fact that it was leaking. Again, the couple on the other side had to pay for the whole roof. The couple said if they’d understood the risk they were taking they never would have bought a duplex. You never know who you’re getting onto bed with: a couple with a big shovel or some deadbeat.

#117 Son of Ponzi on 04.19.14 at 10:38 am

#102 Devore
So there is a free lunch after all.

#118 Ralph Cramdown on 04.19.14 at 10:53 am

#114 frank le skank — “A few people commented that the a house from 1890 which recently collapsed was not properly built? What’s the expectation for a house built 124 years ago?”

Plenty of European cathedrals took longer than that to build; their foundations were already older by the time the roof went on.

It was either well built or it wasn’t. The building envelope and structure was either well-maintained in its 124 years or it wasn’t. The contractors were either prudently doing soil compaction tests and slowly and methodically underpinning the wall, or they weren’t. Underpinning is not rocket science and the people who do it for money aren’t rocket scientists. There is an inherent tradeoff between doing it quickly (and profitably) and doing it safely.

The two things we do know for sure are that masonry is much stronger in compression than it is in tension, and doing foundation work on a house that was built over a long-gone tributary to Garrison Creek — or even buying such a house — might not be the smartest move ever.

We seem to have a collapse like this about every year or so around Toronto, and I read so many more stories about buyers discovering terrible renos (e.g. a bearing wall removed and an insufficient beam installed in its place). I think a lot of the housing stock around here is seriously compromised.

#119 sciencemonkey on 04.19.14 at 10:57 am

On cash vs credit. I’m 30 (one of those young whipper snappers), and I find I pay for almost everything with CC. Sometimes I don’t even carry cash, which is probably bad. I’ve never carried a CC balance, but I can imagine how it would let irresponsible people do so.

Examples like contractors and Chinese restaurants that only take cash are of course tax frauds, and it would be nice to end that. However, on the flip side I want to keep cash because I think we should have an option to not be monitored by the machine.

#120 sciencemonkey on 04.19.14 at 11:01 am

@117
No, everything in the store is marked up 3% to deal with the CC charges. But what can you do? Paying cash, you still pay 3%, but don’t get the convenience.

#121 Bdy sktrn on 04.19.14 at 11:03 am

Jenny Kwan ,,,, a $1.9M house on her salary, especially on one income. She made $101,859 in fiscal 2012/13
_________________
19x income for a house . And you guys worry about 5x.
So what if the mtge payments are higher than her ‘legal’ takehome pay, she is a govt worker, endless money is available from the taxpayers .

Vacations on taxpayer dollars ,thousands for just a room upgrade. Theft in my book, pay it back only if caught. This is whqt govt leeches see as normal.

#122 Dinner_with_Groucho on 04.19.14 at 11:25 am

A few things about this Roxton rd. clusterfuck.

It was bought buy husband and wife flipper twins. They did not do their own inspection, trusting the realtor’s report. They did get permits do excavate the basement but the city inspectors stopped the work pending work to shore up the footings with an engineer to be called in to sign off on it.

The Yuppie owner claims he was not informed that the stop order had been issued. The contractors had certainly been informed so that isn’t gonna wash.

Yuppie smugly claims that everything is insured but I have my doubts about that. He has destroyed the neighboring house and risked the lives and property of his neighbor as well.

Bottom line

His hubris got the best of him and the contractors were complete and total idiots to do what they did. It wouldn’t surprise me thatYuppie and Dumbdiggers & Sons haven’t been doing the flip and reno with slipshod work all over town.

I think this guy is in for a rude awakening if he thinks he’s just gonna get a fat insurance cheque out of this.

#123 Millenial on 04.19.14 at 11:26 am

Visits to food banks in Peel, Durham and York regions have increased nearly 20 per cent since the start of the 2008 recession….

Food bank officials say demand is going up because low-income families can’t afford to live in downtown Toronto and they’re migrating to more affordable areas of the Greater Toronto Area. A combination of low-paying part-time jobs and high rents are forcing low-income families to move outside the City of Toronto.

http://toronto.ctvnews.ca/visits-to-food-banks-in-toronto-s-suburbs-up-almost-20-since-2008-1.1782655

#124 WhiteKat on 04.19.14 at 11:31 am

@96FiendishThingy,

One other thingy, the numbers you quote: ” net worth is below $2 million and avg income below $150k for past 5 years, ” refer to something called an ‘Exit Tax’ that is applied to renunciants of substantial net worth in ADDITION TO the requirement to have 5 years of tax compliancy.

The process of becoming tax compliant can devastate both middle class and wealthy people alike, thus it is misleading to suggest that only RICH people face severe financial difficulties when renouncing US citizenship. Just like it is a misleading to suggest that FATCA is just going to catch wealthy US tax cheats.

These myths are what help to perpetuate the abuse of Canadians with a US birth place.

#125 Aggregator on 04.19.14 at 11:36 am

Mortgage Lenders Ease Rules for Home Buyers in Hunt for Business

Mortgage lenders are beginning to ease the restrictive lending standards enacted after the housing boom turned to bust, a sign of their rising confidence in the housing market. [huh?]

One such lender is TD Bank, Toronto-Dominion Bank's U.S. unit, which on Friday began accepting down payments as low as 3% through an initiative called "Right Step," geared toward first-time buyers and low- and moderate-income buyers. TD initially launched the program last year with a 5% down payment. It keeps the product on its books and doesn't charge for insurance. Borrowers also don't need to put down any of their own cash if a family, state or nonprofit group provides a down-payment gift.

You see folks… banks can't boost effective demand without lowering standards and down payment amounts. That's why next it'll be 2%, and then 1% until it's 0% down payments for all. And at that point there will be absolutely nothing they can do to prop up prices and sales again.

#126 airhead princess on 04.19.14 at 11:41 am

” #121 Bdy sktrn on 04.19.14 at 11:03 am

Jenny Kwan ,,,, a $1.9M house on her salary, especially on one income. She made $101,859 in fiscal 2012/13
_________________
19x income for a house . And you guys worry about 5x.
So what if the mtge payments are higher than her ‘legal’ takehome pay, she is a govt worker, endless money is available from the taxpayers .

Vacations on taxpayer dollars ,thousands for just a room upgrade. Theft in my book, pay it back only if caught. This is whqt govt leeches see as normal.”

Couldn’t agree more…..the civil service is literally a blitzkrieg against the citizens. Look at Meat Puppet Poloz’s attack on the dollar and how it is forcing consumer prices through the roof. Does he care….not a wit. The elite civil service lives on another plane than the rest of us……”Let them eat cake” they say…….

These people have DB pensions that will continue to gut the taxpayer until they die….thats why they can carry massive mortgages long past retirement……after the pension kicks in it is the taxpayer that pays the mortgage. Jenny Kwan has no fear of debt….she doesn’t have to save for retirement……that comes gratis….from us.

#127 Ralph Cramdown on 04.19.14 at 11:43 am

#120 sciencemonkey — “No, everything in the store is marked up 3% to deal with the CC charges. But what can you do? Paying cash, you still pay 3%, but don’t get the convenience.”

Let’s think about that for a minute. Right now retailers are making 3% extra* on their cash transactions, but they’re spending hundreds of thousands lobbying government, paying PR flacks and advertising to consumers (as CFIB is) and suing Visa (as Walmart is) to get those fees cut down to 1% so they can pass the savings on to you and be worse off (same profit margin on CC receipts and only an extra 1%* for cash)? What saints they must be!

* – Minus the costs of handling cash, which can be considerable. Banks charge, cashiers miscount and steal, customers pass counterfeit cash and fumble — or don’t have the money at all and don’t buy, and robbers hold up cashiers or employees making deposits. Why do you think so many businesses readily welcomed credit and then debit in the first place?

#128 crowdedelevatorfartz on 04.19.14 at 12:12 pm

A million dollars for a half house that’s almost 100 years old. What were these people thinking?

Fools and their money………

Enjoy your weekend Garth.

#129 Big Brother on 04.19.14 at 12:23 pm

Smoking man ready to serve you wine tonight at Seneca!

#130 Shawn on 04.19.14 at 12:27 pm

Cashless Society…

tkid at 81 responded to my following sentence.

Why bother carrying cash if everyone takes debit?

Paying $1.50 in debit fees for a $1.50 cup of coffee is foolish. Carry around a toonie or two and do not pay twice as much as everyone else for a cup of coffee.

******************************************
Several others have now pointed out that many of us have debit cards with no fee to us.

Merchants pay something like 10 cents per transaction on debit, whether you are buying a pack of gum or a car. (10 cents was the number years ago it may be lower now). They also pay a monthly fee for the debit machine.

For several decades credit cards were the retailers best friend. They took a 2.5% fee or whatever but the resulted in more sales and eliminated the problem of accepting personal cheques or giving customers credit. (Which most stores did up until the 1970’s).

Starting at elast 20 years ago, the debit card became the retailers new best friend and the credit card is no longer a best friend. Credit card merchant fees are higher than before. Merchants still have to accept credit cards though and so they are a kind of loved but somewhat costly friend to retailers.

If you like your retailer, and especially for Mom and Pop places, use debit. They are not really in a position to tell you that using debit is far better for them. They need the sale either way. But if you want to help out a local shop owner, use debit. (Or cash, but let’s face it most of us don’t carry much cash).

Canada had or has a wonderful thing in the form of interact that has kept debit card fees low all these years. Now, Visa and MasterCard are getting into the business and debit card fees could soar. (And it it is probably already happening)

If debit cards could be used online then online retailers would save a bundle. It’s a mystery why debit issuers have not figured a way to use debit online.

Credit card fees are actually too high (especially in cases where the customer is paying it off monthly) and it is an industry that is awaiting a disruptive technology or disruptive competitor.

Or perhaps the government will just regulate a 1% maximum fee. Visa and MasterCard, although there are two of them are basically monopolies from the point of view of the retailers. Price regulation is a potential solution to monopoly pricing.

#131 Anon on 04.19.14 at 12:44 pm

I’ve got a difficult decision moving forward. One of the major banks just offered me four years at 2.87%, and they were even offering five years at 3.07%.

These numbers are practically “sub-prime.” I can easily afford the mortgage, but I have to really ask myself if now is the right time to buy.

#132 Dr. Wu on 04.19.14 at 1:14 pm

#114 frank le skank on 04.19.14 at 10:10 am

A few people commented that the a house from 1890 which recently collapsed was not properly built? What’s the expectation for a house built 124 years ago?


In Europe exterior walls could be 4 feet thick (all brick, last for hundreds of years), in Canada two layers of brick, maybe 150+ yrs
I’ve seen 100 yr old stone foundations that are very solid, stone is likely the best of the era, and could go on for another hundred years. I’ve seen brick foundations which are very porous. I’ve seen brick foundations with single brick footings laid at 90 degree angle under the foundation,(which is way below today’s standard). My house is 1911, and has a brick foundations, pure garbage, but the house is wood frame and very level. The problem is when you want to re use an old foundation for something heavier than it was intended for. The City of Toronto makes your engineer sign and stamp the drawings that he’s inspected the site, so he’s on the hook 100%. The City will not inspect your site prior to permit. Best foundation today is poured concrete, it’s the most water proof, compare it to porous and hollow concrete block . Re brick veneer, life expectancy= 50 years, solid brick (no one is doing it anymore) at least double that

#133 TurnerNation on 04.19.14 at 1:37 pm

Bidding warriors using pictures of their wedding as props. Did they not take Smoking man 101?

Ever human is wired to try and advance their own progeny, pro-create their own offspring. Why o why would they (sellers) give another pair of ‘breeders’ a leg up in their quest?

#Betas

#134 Shawn on 04.19.14 at 1:44 pm

Buying Half a House…

Yeah, most Canadians will not grab the other half of a table where two people are occupying a four person table in a food court.

Most will not grab the empty seat of two seats on a bus or subway if any other full seat is empty.

It’s absolutely crazy to get into owning half a house, especially an older junker.

For the same reasons I have never been a fan of condos of any kind.

I’ll have my own separate piece of dirt, thank you.

Some of these reasons explain why we do bid up the price of single family homes. We value our independence.

Most of us by our actions demonstrate that we far prefer a one hour commute in our own car at twice the cost versus taking transit with our sweaty brethren at half the cost and often half the time. We value our independence and we value it greatly.

#135 Banks win on 04.19.14 at 2:04 pm

So if Canadians have so much dept and Ottawa trying to cool down the real estate market, then why are all the banks spending so much money advertising mortgage loans like RBC “The Mortgage” movie.

Banks win either way. They get interest if you buy and if you default, they own your property for literally nothing and profit when they sell. Wow, brilliant money making scheme.

#136 devore on 04.19.14 at 2:05 pm

So there is a free lunch after all.

No, other people eat the vast majority of the cost. Do you get free lunch too when you’re renting for half the cost of owning? Of course not, but when someone is handing you money with no strings attached, you take it.

If there is opportunity and advantage to get a cash discount, at least 2% of the price, I’ll pay cash, why should I make my life more difficult and expensive on purpose?

Your continued glibness and gross generalizations here don’t impress me very much.

#137 Habs76-79 on 04.19.14 at 2:20 pm

#102 Devore,

The middleman who provides the electronic service for debit and credit cards is making the money through fees easy for them. The infrastructure for such has been in place for many years now. Sure it cost money to set up and to maintain but that money was and is paid for by the vendors who accept debit and credit cards, through their fees paid. Above that there is lots of left over and easy profit for this service. On top of that debit cards in general do not come free for use to the buyer. Most banks have fees for use. Some offer better terms for some clients, others don’t but IT SURE THE HELL AIN’T FREE! to use your debit card. It has what is for all intents, insidious transaction costs.

I never said to NOT use debit cards. My point is noted that it’s silly for generally tiny purchases as not only does the user pay for such use, but the vendor does too.

The transaction fees are probably crazy amounts in total on any given day for all the debit and credit cards used. So yeah, it’s EASY MONEY!!! for these middlemen and nothing you say will make that not so.

So yeah you go on nickle and dimming yourself and any vendor with your tiny and IMO silly small purchases on a debit card. OBTW I guarantee I can and most people could make a $2-$-$4 cash transaction quicker at Timmy’s than you can with your debit card.

\

#138 Habs76-79 on 04.19.14 at 2:32 pm

#120 Sciencemonkey

No, everything in the store is marked up 3% to deal with the CC charges. But what can you do? Paying cash, you still pay 3%, but don’t get the convenience.

——————

Um no they are not. They are eating the fees to get the sale. They hate the fees they are being nickle and dined at taking but they want to move products and provide services so they just accept the fees they are charged.

As to another point made by some here, where most n banks have accounts with high volume or unlimited debit card transactions for free, IT’S B.S.

They may offer you these services but at a fee to give you more debit card transactions. So where maybe you were paying lets say $0.50 to $1.00 per debit card transactions, if you pay for a premium service say oh $10.00 per month you will get maybe a larger volume or even unlimited use of you debit card, but it still cost you say $10.00 per month.

Some banks will give you free debit card services if you hold a mortgage with them. WHOOPY DOO! If I just sank you for a few hundred thousand $$$ of debt I will give you essentially a pissy lil freebee too.

So no, most folkds wil and are oayng quite anice mkntksy fee to use dedbut cards.

#139 Republic_of_Western_Canada on 04.19.14 at 2:50 pm


#131 Dr. Wu on 04.19.14 at 1:14 pm […]
Best foundation today is poured concrete, it’s the most water proof, compare it to porous and hollow concrete block .

Well, although poured cc is superior to ‘cinder-block’ and is very common, it’s certainly NOT the best foundation material.

Poured concrete by nature has lots of water in it so it can be handled efficiently. When curing, that cc shrinks when the excess water chases out of it, causing cracking. All sorts of other causes also exist in a less-than-perfect construction site.

Differences in day temperature during and after a pour, certain chemical additives, excessively fast surface-drying right after a pour (in addition to the curing shrinkage) and settlement of foundation support after all that heavy weight is applied to it all cause cracking. Those, and wet concrete mix, are common to job sites. So most concrete foundations will crack and that will increase over time.

A lot of it is not structurally significant and will still hold up the building, but might be cosmetically ugly to someone expecting a perfect product after paying too much for their chipboard doghouse. It can also allow for leaky basements if built in a former swamp, stream, or other low area.

Rebar helps a bit to resist settling forces which want to tear apart a wall from end-to-end (tension), but not so much in perpendicular directions to the wall like when back filling too high, or too early, or placing heavy machinery beside it.

Much better is to use pre-stressed insulated-core factory-built concrete panels, both for below- and above-ground structural & weather-envelope layers. Those panels consist of one outer cosmetic/weather wythe (layer) fused to several inches of hard insulation then a thicker layer of structural concrete containing the pre-stressed cables or rods.

The panels are cast in a long, wide factory bed in 3 different layers, around long cables pulled into tension at either end, using thick ‘zero-slump’ concrete. The concrete is cured at optimum, constant factory-controlled temperature. All openings and conduit are prepared before the cast. The panels are trucked to site and set onto crushed rock footings by crane. Joints between panels are predictably sealed against water by some engineered compound like neoprene etc (instead of having cracks in a typical poured foundation repaired 4 years later by ‘Joes driveway and basement tarring service).

#140 World According To Garth on 04.19.14 at 3:09 pm

Banks – fees fees fees fees fees fees

Bitcoin – no fees

This is why Bitcoin is here to stay.

#141 AisA on 04.19.14 at 3:17 pm

The wasted capital in this country, is astonishing.

Toss your life savings in the St. Lawrence and get it over with quickly, or die a slow financial death over the next 5 years.

Let it not be said that the house horny are without options.

#142 Ralph Cramdown on 04.19.14 at 3:23 pm

#129 Shawn — “Credit card fees are actually too high (especially in cases where the customer is paying it off monthly) and it is an industry that is awaiting a disruptive technology or disruptive competitor.”

It’ll be waiting a long time. A typically sub 3% fee that has to be split three ways (card issuer’s bank, business owner’s payment processor, card company) and sometimes four (for cash back cards) spells LOW MARGIN. Who’s going to spend the billions required to build a network, only to be the number three, four or five player in a market, and the card that doesn’t work for international travel, on a business model of undercutting the big guys? VISA, Mastercard, AMEX, Discover, JCB, that’s it. It’s hard to make a case to regulate them as a monopoly since there’s more than one, their infrastructure is just the phone system meaning there’s no natural monopoly aspect, and many businesses do just fine without them.

Anyone remember Dexit? Didn’t get anywhere. Square is a bit disruptive, but their business model is to make it easier to become a merchant using your mobile phone and they charge a HIGHER fee. Starbucks has a successful payment card that only works at Starbucks.

Why the Canadian Federation of Independent business doesn’t create a buying association and negotiate lower prices on behalf of members instead of just being a whining association is beyond me.

#143 Entrepreneur on 04.19.14 at 3:49 pm

Live in a old house and could not sell at a high price; could at a low price. Also, will point at the parts that need fixing. I could sleep at night. What money can do to a person…morals are out the window.

It is a good idea that Japan uses money for transactions as small businessess are the supporters for the ecomony to prosper. We carry small amounts of cash for the businessess that do not have debt machines. Support your small businessess (even though they are fading) and buy only wild fish (make sure that it say wild).

#144 T.O. Bubble Boy on 04.19.14 at 3:58 pm

$900k House of the Day for Saturday, April 19th:

3 Finalists
1) A 2-for-1 offer! 1st $995k Semi-Detached and 2nd $995k Semi-Detached being “sold together” for a $1.99M 50′ x 125′ Lot.
2) A basic 10-yr-old burbs house in a non-premium part of Mississauga, priced at $979k
3) A $969,900 house near where Rob Ford buys his drugs… “featuring” 1960’s/1970’s decor and an *above ground* pool.

WINNER
Wow… I really can’t decide today. These are all ridiculous – highlighting that everyone in the GTA reads the headlines and feels that their house is worth $1M.

I’m going with #2: even with a ravine lot, this place is NOT a premium location, and there is no way every burbs house in Mississauga should be a million bucks.

#145 Ralph Cramdown on 04.19.14 at 4:07 pm

#139 World According To Garth — “Banks – fees fees fees fees fees fees. Bitcoin – no fees. This is why Bitcoin is here to stay.”

Which WAS the greatest trick Satoshi ever pulled: Getting thousands of people to spend millions on hardware and electricity in order to discover some numbers with no intrinsic value? Or getting thousands more to believe that a ‘currency’ that absolutely requires an online electronic infrastructure to function will have said infrastructure built at great cost and provided for free?

#146 Shawn on 04.19.14 at 5:01 pm

LOW MARGIN on CREDIT CARD FEES?

Ralph at 142 says:

A typically sub 3% fee that has to be split three ways (card issuer’s bank, business owner’s payment processor, card company) and sometimes four (for cash back cards) spells LOW MARGIN.

******************************************
Agreed, that is a low margin on the retailers revenue.

But what is important to the credit card company is its return on its investment and margin on its revenue.

If I can insert myself in the middle of a transaction and grab 1% and my costs are low than I may have a very high margin on MY revenue. What difference that they “only” take 3% of the retailer’s margin?

Okay, here ate figures for VISA Inc..

Net after tax profit on their revenue: 42% That is hardly low margin. Now is that a tiny percent of the gross purchases on the card, yes, but so what?

Net profit on assets: 33%

Net profit on equity: 18%

Now, most of their assets consist of purchased goodwill as VISA was essentially purchased from its founding banks.

Net profit on tangible equity: 128%

Price to book value to buy a share of Visa: 5.0 times

Price to tangible book value to buy Visa: 34.9 times

Visa Inc. is one of the most lucrative businesses in the world in terms of earnings generated versus the capital invested.

The reason it can’t easily be competed against is called “the network affect”. Once most people and most businesses had adopted VISA and Master Card it was almost impossible to shake people loose from those two.

People will not carry a new credit card unless many stores accept it and stores won’t accept a new type of card unless most people already carry it. Result stale mate.

Debit cards have in fact gained a huge share of the payments market so they did break through the log jam with a different product.

But the banks run both debt cards and VISA / MasterCard to there was little chance that VISA and MasterCard were going to get crushed.

Visa and MasterCard are vulnerable to lower cost ways to transfer money from our bank accounts to the merchants. Debit Card is one.

Bitcoin was an another attempt. One which I don’t understand but it was an attempt. Perhaps if it had operated the same technology to transfer dollars somewhat anonymously and safely it would have had more success. It got sidetracked in a strange attempt to be no-fee and by being about bitcoins and speculation thereon rather than dollars.

I won’t hold my breath but we will see what pops up in the next ten years.

#147 sciencemonkey on 04.19.14 at 5:07 pm

Blog dogs, I am back from meeting with my US tax accountant, and the short answer as to whether US citizens should use a TFSA is, there’s no point.

Hot it works is both the CRA and IRS have independent calculations for tax you owe on investment income. Both have brackets for investment taxes, so higher investment income amounts get higher percent tax charged.

CRA considers things like Canadian dividend credits on Canadian companies, and the TFSA which is tax free.

The IRS gives you an exemption on the first ~ $90,000 of earned income, but that doesn’t apply to investment income. However, you can use your basic exemption of ~ $10,000 on your investment income, after which you start to owe taxes. Also apparently the IRS gives you tax breaks on US mutual funds investing in US companies. Perhaps you also get tax breaks on owning US companies themselves, or ETFs instead of mutual funds.

After both calculations are done, you have investment tax owed according to the CRA and according to the IRS. Whatever you pay to CRA can be exempted from the IRS amount, dollar for dollar.

From this, you can see that if you save on CRA taxes with a TFSA, you will just owe more to the IRS anyway, because all TFSA gains are considered taxable by the IRS. Might as well avoid the extra cost of having to file the IRS forms related to the TFSA, which is considered a trust.

Other random things: 1) Avoid mutual funds, reporting them is way more difficult. ETFs are the way to go. 1a) Mutual funds in an RRSP are ok. 2) On top of the IRS filing, you’ve got US treasury FBAR reports, which you can pay your US tax account to do, but it’s simple to do yourself.

I think going forward I will continue to 1) Max my RRSP, 2) Put foreign ETFs in my RRSP, 3) Put Canadian equity and dividends in my open account, where I will pay lower tax to CRA due to Canadian credits, and once I start earning more than $10,000 in my open account (which implies a balance of ~ $170,000 in the open account), I may have to pay some tax to the IRS as well.

#148 Smoking Man on 04.19.14 at 5:15 pm

#129 Big Brother on 04.19.14 at 12:23 pm

Smoking man ready to serve you wine tonight at Seneca!.

……….
Disappointed Big Brother…

I’m about 8 Hours south east of Seneca…..

Will be signing autographs, and posing in pictures with fans of Braking Bad……

#149 World According To Garth on 04.19.14 at 5:24 pm

#145 Ralph Cramdown on 04.19.14 at 4:07 pm
#139 World According To Garth — “Banks – fees fees fees fees fees fees. Bitcoin – no fees. This is why Bitcoin is here to stay.”

Which WAS the greatest trick Satoshi ever pulled: Getting thousands of people to spend millions on hardware and electricity in order to discover some numbers with no intrinsic value? Or getting thousands more to believe that a ‘currency’ that absolutely requires an online electronic infrastructure to function will have said infrastructure built at great cost and provided for free?
—————————————————————

Sigh….

1. No currency has any value but that which a govt is able to tax and steal back. ALL currencies are created out of “thin air” this has been debated to death. Bitcoin is just as taxable as “digitally created Cdn or US dollars”.

2. Guess you have never heard of a monthly internet bill.

FAIL

#150 William Bell on 04.19.14 at 5:39 pm

RE: Debit Cards @#58

Sounded like you really believe debit/credit card transaction processors just sit on their asses and magically collect their toll fees out of thin air, aka “easy money”

I agree with their hefty merchant fee & charges because I owned retail stores before, but these aren’t SIMPLE TRANSACTIONS and you can be damn sure these infrastructures aren’t EASY things to develop.

To an average consumer, like yourself, a quick 5 second transaction looked easy & stupid because they are engineered to behave that way.

Just because of a very complicated computation problem has been solved and has been morphed into a very, very simplified task, the owners of these intellectual properties sure has every right to collect a fee for each usage.

Nobody ever pointed guns at peoples’ head forcing them to use bank cards, but they were made simple for lazy people to utilize…. same way we turned away from horse carriages and start using motor vehicles many years ago.

#151 Old Man on 04.19.14 at 5:46 pm

I have just completed a review of Caesar’s energy policy for Canada; pipelines, gas, and oil. There is none, as this idiot has been spinning his wheels for years, and suspect it was a staged event. Our energy policy has no legs to compete or deliver products anywhere, as the costing and infrastructure is non existent. Calgary is an illusion, as we have become a car with no engine just like the F-35’s. We sit around wasting time while others will get the international product business; USA needs not our gas or oil which was a created reality to give us hope. We are being reformed to accept our future fate with no way out under the leadership of Caesar because ese tio esta loco!

#152 World According To Garth on 04.19.14 at 5:50 pm

To everyone calling the Bundy people a bunch of “nuts” and the t word because they fought back against the tyrannical FEDERAL govt. You might want to do your homework instead of listening to the Main Slime Media for your information……

http://armstrongeconomics.com/2014/04/19/do-the-feds-really-own-the-land-in-nevada-nope/

Who cares? Go away. — Garth

#153 bdy sktrn on 04.19.14 at 5:56 pm

If debit cards could be used online then online retailers would save a bundle. It’s a mystery why debit issuers have not figured a way to use debit online.
——————
https://www.interac.ca/index.php/en/interac-online/interac-online-for-consumers

used it – very easy – all u need is your bank password

————————-
re 137
NOTHING is faster than the new ‘tap’ to pay with credit cards, for 100 and under. love it.

debit tap will be coming.

#154 World According To Garth on 04.19.14 at 6:50 pm

Whooops !! Wonder how all those houses are going to hold up in the cold and rain of global warming !!

You know….if global warming were actually real it would be a bummer for the economy cuz stuff would last much longer instead of rotting and falling apart in the the cold and rain. Which means lots of out of work contractors and Home Depot employees. I lived on a farm made of “wood and stone” for 15 years on Vancouver Island so I know with which I speak.

http://www.globalclimatescam.com/2014/03/2nd-coldest-u-s-winter-in-35-years/

#155 WhiteKat on 04.19.14 at 6:52 pm

Totally on-topic, for a change…. Fourteen years from now, when Matt and Krysten, are hopefully behind this ordeal, their friends who got horny about the things that are really fun, will be watching something like this:
http://video.ca.msn.com/watch/video/amazing-time-lapse-shows-girl-growing-from-baby-to-14/2jxpw90i?from=en-ca-infopane

#156 Ralph Cramdown on 04.19.14 at 7:01 pm

#146 Shawn

Yeah, I looked up VISA’s ROE and P/B when I was posting. Part of their genius is getting member banks to take all the fraud risk, and the rest is having gotten so big that their overhead is a small part of their revenue. One almost wonders how they manage to waste as much of the revenue that they do get.

The network effect is absolutely why not much will change. Nobody will spend billions to be #3. It’s very similar to Canada’s mobile phone charges; despite Harper’s wishes and Canada’s high margins for incumbents, Verizon decided it was completely uninterested in entering our market and spending big bucks to be maybe fight its way into the top three.

Here’s how Silicon Valley is pissing away money looking for the next big payment scheme:
http://www.businessinsider.com/inside-story-of-clinkle-2014-4?op=1

And of course there’s the bitcoin crowd, spending millions to try to build businesses selling services to people who are convinced that much of the genius of the currency is that it doesn’t cost anything.

#157 Waterloo Resident on 04.19.14 at 7:27 pm

Wow, if the economy is so good that people are getting $150,000 per year jobs after only 2 to 4 years after graduation, then I don’t see why houses in Toronto are not TRIPLE OR QUADRUPLE the price that they are now.

Don’t you agree?

#158 Shawn on 04.19.14 at 7:30 pm

In Search of Economic Policy

Old Man says:

I have just completed a review of Caesar’s energy policy for Canada; pipelines, gas, and oil. There is none,

******************************************

Now you can search for the policy on how any grocery stores we need and where we need them. And the policy on how many book stores and how many farms.

The fewer such policies you find, the better.

You’ll find lots of them in the old soviet Russia.

#159 Daisy Mae on 04.19.14 at 7:37 pm

#74 sheane wallace: “Does somebody believe that we could see $10 per gallon gas ($2.60 per litre), $4 for a coffee, $8 for a bread, in the next 3-5 years?

I would put the probability for the above at 80 %.
Of course the official CPI would be at 1.7 %”

******************

What would be gained by these increased prices? Consumers would simply continue cutting back out of necessity, buying just the basic foods to sustain life. The economy, therefore, collapses…

#160 Daisy Mae on 04.19.14 at 7:54 pm

It’s unlikely the insurance company will be paying out anything. After they’ve done their investigation and dismissed the ‘house inspection’ as fraudulent.

The attached neighbours will sue.

The Christies’ are in deep ‘do-do’…..

#161 Daisy Mae on 04.19.14 at 8:05 pm

#98 devore: “I seriously doubt there was any insurance. These flippers cut any and all corners, because expenses such as that eat into profits heavily. Even if they did, what kind of insurance covers an event like this? Likely, any insurance they have is either woefully inadequate or void due to any number of reasons. No, this will be up to the contractor’s insurance, assuming the company hasn’t folded and re-opened under another name already. I see many lawyers and billable hours in this couple’s future.”

******************

Exactly.

#162 Daisy Mae on 04.19.14 at 8:06 pm

Further to last….contractor is long gone.
He’s not liable.

#163 Spectacle on 04.19.14 at 8:08 pm

Happy Easter to all, eat some good chocolate. Thanks to Garth.

Points I’d like to add today:

1). You can’t insure stupid! I see about 3 big lawsuits re this piece of property. He is not insured, and is only as well covered as his law firm makes him.

2). Just from the pictures I see the crap / hack work done to this sack of poop. Only the basement “bar” has a stove! The other floors do not, to appease the city inspectors re 3 floors of kitchens?? .

3) nobody cares about each other in such a situation. I’d bet dinner on me that the renovator runs to another province. His comment, it was fine when we left it that evening …riiiiight.
4) plumbing in the bathroom goes in a curly circle. What is that about? Sewage runs down hill, not up and in circles.

5) #110 stickler. Those HgtV shows won’t touch this house. The workers won’t do the work at this stage due to liabilities . In addition, it’s too far gone , the lawyers and the realestate agent ( trade Mark ) are the only ones to make money on this house. It will be sooo mired in legal issues.

Jesus was a carpenter, but he could also part the sea, walk on water…..renovations were easy!

… so roast me ; )

#164 Old Man on 04.19.14 at 8:28 pm

The City of Toronto issued a building permit with the blessing of a city building inspector, so it was a go for the happy couple. They would then hire a contractor to assess the problem for the work to commence; be it general or specific and hopefully a structural engineer was consulted. Things did not go well at all, and hope the happy couple checked whether a liability bond was in place for a few $million.

#165 flora on 04.19.14 at 8:53 pm

#131 Anon on 04.19.14 at 12:44 pm

Your in it for the long haul right ? Assuming you live in Toronto. Double or triple the value of the house over the next 20yrs is achievable.

#166 gladiator on 04.19.14 at 9:35 pm

OT: Has anyone noticed this clever way that the guvmint uses to rob us: taxation of nominal capital gains, instead of the real ones.
So, if I buy an investment for 100 dollars, hold it for a year during which it goes up by 10% and sell it, then I pay cap gains tax on these 10$ I earned. Looks fair, doesn’t it? However, if the inflation was 3%, which is my loss and which the government itself says that it’s a devaluation of money, then why do I not have the option to write off this loss from the 10$ gain, and pay tax only on the 7$ that I am actually up by? I overpay taxes by having a tax base of 10$ – my nominal gain.
Do you fellows agree with this?

#167 };-) aka Devil's Advocate on 04.19.14 at 9:44 pm

#14 Millenial on 04.18.14 at 5:58 pm
well, if they were properly insured, then they’ll get a brand new house out of this. might be the best thing to ever happen to them.

Maybe somebody already said it but… Ya a nice new semi attached to the crappy old other side. BTW we call them duplexes out West, and “cottages”… out here we call ’em “cabins”. Granted “cottage” does sound so much more refined. But “semi”???

Thing about those “semis” is you have little if any protection against what your all too close neighbour does that might affect your property value and you are attached at the hip – practically literally. As much as I hate condos, at least you have a strata that will make and effort to protect the interests of others against the renegade acts of another.

#168 Smoking Man on 04.19.14 at 9:48 pm

On a wine buzz, singing autographs, photos with idiots thinking I’m Walter White…

Listing to the Handsome Family on the buds…. Ahhhhhhh

My wife told the kids dad wants to drive to Mexico, they believe it…

I’ve done crazy shit like that before, but I’m a dog now, I have traders to take care of…. Venesia a rental missing king size….

The wife trying to talk me into servicing sugar mom’s, I have her convinced we are broke… After the off shore….. F the liberal thieves.. Coming after my slave made fortune……

I might just drive to Mexico, F the tax farm….

They can figure it out…….

#169 Shawn on 04.19.14 at 9:51 pm

Over-Taxed on Capital Gains due to Inflation

Gladiator said:

I overpay taxes by having a tax base of 10$ – my nominal gain.
Do you fellows agree with this?

*******************************************
Well, your math is correct but no, you are not being over-taxed and here’s why.

Capital gains tax rate inexplicably is half the normal rate.

You don’t get taxed till you sell so your capital can compound tax free for years if you don’t sell.

Interest meanwhile is taxed whether you receive it or not.

Anyhow inflation is low, the problem you describe was a problem back in the high inflation years, but overall today, capital gains are lightly taxed.

You’d almost think the rules were stacked in favor of the richest people. Yeah, “almost”.

#170 Chickenlittle on 04.19.14 at 9:59 pm

T.O. Bubble Boy:

The Mississauga one is near a No Frills so that’s worth something (lol).

I used to live in that area. There are a lot of old Europeans there and their houses have mostly not been updated.

It is a nice area, though. It’s 15 minutes to 3 different malls (Sherway, Square One, and Yorkdale) and lots of other shops. Also it’s a safe neighbourhood.

HOWEVER, I am with you on the stupid price. It’s not worth it!

#171 Smoking Man on 04.19.14 at 10:01 pm

Why where we put on this earth…. An image In the ultra sound, the hope, the disappointed, the thrill of a rare royal flush….

I meet a chic at the film release, balls bigger than mine…. Nothing between her ears except for a massive ego….

She sits on 5 boards, she’s never made less than 5 million a year in the last 10 years…..

But when I come here trying to demonstrate the value of a big ass ego.. I’m crushed by programming, the teachers talk….

Be humble, don’t brag, let them figure out you’re special but do not self promote….. It’s bad.

I want to strangle stupid people….

#172 Big Brother on 04.19.14 at 10:02 pm

#148 Smoking Man on 04.19.14 at 5:15 pm
#129 Big Brother on 04.19.14 at 12:23 pm

Smoking man ready to serve you wine tonight at Seneca!.

……….
Disappointed Big Brother…

I’m about 8 Hours south east of Seneca…..

Will be signing autographs, and posing in pictures with fans of Braking Bad……

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Have the band reved up for you with our music full of subliminal suggestions. You will be at Seneca, you always come to us for reprogramming!

#173 Tony on 04.19.14 at 10:16 pm

Re: #166 gladiator on 04.19.14 at 9:35 pm

Sort of but the tax system is indexed to the yearly inflation rate. They sort of lie about inflation as it’s always lower than it is in reality. By doing this CRA bilks the average working person out of more money.

#174 Ralph Cramdown on 04.19.14 at 10:34 pm

#166 gladiator — “[…] Looks fair, doesn’t it? However, if the inflation was 3%, which is my loss and which the government itself says that it’s a devaluation of money, then why do I not have the option to write off this loss from the 10$ gain, and pay tax only on the 7$ that I am actually up by?”

Personally, I’d rather keep the lower tax rate on capital gains and dividends than open my mouth about the slings and arrows of paying tax on nominal gains and risk having the whole system of those preferential rates questioned.

#175 WhiteKat on 04.19.14 at 10:38 pm

@ScienceMonkey #142, Nobody cares, even if you think of yourself as a Canadian. Are you? Regardless, it doesn’t matter, you are one of ‘them’ – don’t forget that. YOU ARE SPECIAL.

#176 WhiteKat on 04.19.14 at 10:42 pm

ooops. @ScienceMonkey re: #147, not #142

#177 45north on 04.19.14 at 10:46 pm

Dinner_with_Groucho :

talking about the new owner of 290 Roxton:

His hubris got the best of him and the contractors were complete and total idiots to do what they did.

I think this guy is in for a rude awakening if he thinks he’s just gonna get a fat insurance cheque out of this.

best summary!

I mean if the guy had not dug up the basement, the house would be just fine (relatively)

Dr. Wu : The problem is when you want to re use an old foundation for something heavier than it was intended for. The City of Toronto makes your engineer sign and stamp the drawings that he’s inspected the site, so he’s on the hook 100%.

Dr. Wu thank you for contributing, your knowledge and experience are valuable

Republic_of_Western_Canada :

Much better is to use pre-stressed insulated-core factory-built concrete panels, both for below- and above-ground structural & weather-envelope layers.

interesting, that doesn’t sound like residential construction – at least not single family?

Ontario’s Left Coast : Wow, I’m admittedly in a secondary-cum-tertiary market

Atikokan?

http://en.wikipedia.org/wiki/Atikokan

#178 T.O. Bubble Boy on 04.19.14 at 10:49 pm

@ #170 Chickenlittle on 04.19.14 at 9:59 pm
T.O. Bubble Boy:

The Mississauga one is near a No Frills so that’s worth something (lol).

I used to live in that area. There are a lot of old Europeans there and their houses have mostly not been updated.

It is a nice area, though. It’s 15 minutes to 3 different malls (Sherway, Square One, and Yorkdale) and lots of other shops. Also it’s a safe neighbourhood.

HOWEVER, I am with you on the stupid price. It’s not worth it!
—————————-

Don’t get me wrong – I am not saying that those are in “bad” areas… but they are not in the small pockets of Lorne Park/Streetsville/etc. where homes have been $1M+ for decades.

The whole point of my “$900k house of the day” is to highlight how EVERY house seems to be inflated to the $899k to $999k range, because that is the top end of where Canadians can get CMHC-backed mortgages. All of the bidding war behaviour in the GTA seems to be driving things like dumpy semi-detached, burbs detached, and other categories of homes that recently were priced in the $600k-$800k range up to near $1M.

#179 Smoking Man on 04.19.14 at 10:53 pm

#172 Big Brother on 04.19.14 at 10:02 pmSmoking man ready to serve you wine tonight at Seneca!.

……….
Disappointed Big Brother…

I’m about 8 Hours south east of Seneca…..

Will be signing autographs, and posing in pictures with fans of Braking Bad……

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Have the band reved up for you with our music full of subliminal suggestions. You will be at Seneca, you always come to us for reprogramming!

…….

I’m In Atlantic City, you idiot…

Grab the package, and do what you do…

Loser………

#180 T.O. Bubble Boy on 04.19.14 at 10:57 pm

@ #157 Waterloo Resident on 04.19.14 at 7:27 pm
Wow, if the economy is so good that people are getting $150,000 per year jobs after only 2 to 4 years after graduation, then I don’t see why houses in Toronto are not TRIPLE OR QUADRUPLE the price that they are now.

Don’t you agree?
——————-

I don’t know why I’m even responding to this one… but here it goes:

1 guy in a high-burn job making $130K+bonus after probably 5 years post-undergrad does not make an economy. Note that his wife of the same age makes $75k.

Now, even if everyone made $150k, would that justify $2M-$4M houses all across the GTA? No. Even the extremely generous CMHC affordability calculators would only allow a family like that to borrow say $500k to $1M… interesting that they have a $700k+ mortgage, which must be near the absolute max they were allowed.

The old rule of thumb was that the price of a house shouldn’t be more than 2x-3x your income!

#181 Smoking Man on 04.19.14 at 11:02 pm

You know your old, when Johnny cash hits the ear buds…….

Love it

#182 Smoking Man on 04.19.14 at 11:10 pm

Short term rental on the left side, on the right…

I’m a broken man, booze vs it, the v for victory, I’m not interested….

Booze Johnny Cash on the buds……

God damn this bald head into silicon, F it.

SMW, THE BEST

#183 KommyKim on 04.19.14 at 11:29 pm

RE: #173 Tony on 04.19.14 at 10:16 pm
Re: #166 gladiator on 04.19.14 at 9:35 pm
Sort of but the tax system is indexed to the yearly inflation rate. They sort of lie about inflation as it’s always lower than it is in reality. By doing this CRA bilks the average working person out of more money

Not to mention CPP, OAS, GIS and tax brackets which are all indexed to the CPI frankenumber. That’s why it pays to hold real things like equities and real-estate. (In the proper proportions of coarse)

#184 don on 04.19.14 at 11:31 pm

#173 entrpenure. I happen to grow fish in Southern Ontario. I am always amused when people say to buy wild fish only. What exactly are the reasons ,what exactly am I doing wrong. I would really like to know. If I am hurting my customers and more importantly me and my family I really,really would like to know.

#185 don on 04.19.14 at 11:31 pm

Sorry that was comment 143

#186 Nemesis on 04.20.14 at 12:23 am

#HappyEasterFromHarvey&Elwood #6’3″Bunnies

#Harvey [1950]

http://youtu.be/dWmc_XRpa9U

Alternate – EasterEgg V.O. conclusion

http://youtu.be/VvfXvW2wsuQ

DISSOLVE TO:

“…in this world, Elwood you must be oh so smart… or oh so pleasant”…

“Well, for years I was smart… I recommend pleasant. You may quote me”

http://youtu.be/UUOxEwCuEgQ

SegueToFinale…

http://youtu.be/5vgLTzmSPro

#187 Steve French on 04.20.14 at 12:53 am

“Now listen, you rich people, weep and wail because of the misery that is coming upon you. Your wealth has rotted, and moths have eaten your clothes. Your gold and silver are corroded. Their corrosion will testify against you and eat your flesh like fire. You have hoarded wealth in the last days.

Look! The wages you failed to pay the workmen who mowed your fields are crying out against you. The cries of the harvesters have reached the ears of the Lord Almighty. You have lived on earth in luxury and self-indulgence. You have fattened yourselves in the day of slaughter. You have condemned and murdered innocent men, who were not opposing you.”

– James 5: 1-6.

#188 Steve French on 04.20.14 at 12:54 am

… wow, Jesus was a radical socialist!

#189 DocInWaitingRoom on 04.20.14 at 1:41 am

I use credit card for coffee as I save time and money.
Time cause I dont count pennies nor wait fir cashier to check them over 1 minute and I get 2% back on any purchase.

So I pay 98 dollars for 100 of anything while you pay and count 10000 pennies

#190 DocInWaitingRoom on 04.20.14 at 1:43 am

Only thing is I usually make real coffee espresso at home not bladder excretion from “timmies” or similar

#191 Don Der on 04.20.14 at 2:46 am

WATG and HABS… you people are bang on – release a book that I can take out at the library…..good spicy dialogue tdy from all. I love this blog.

Quick note : I bought a 2 bdrm townhouse in good ol’ Abby in 2005 for $125K….they were selling or as high as $190K in 2007, then I sold in 2012 for $170K, and those same units are now listing for$125….poor abby/chilli – they are still Vcr’s ugly sisters for now. I may just sell in Surrey and go back to abby, this time in a house. Only problem is a abby has a rental property with a $100 million mtge and no tenant and a $250 million bill coming for a new water plant – TBA….

#192 a prairie dawg on 04.20.14 at 4:19 am

It was considered to have good bones and a lot of potential.

– – –

That must have been the agent’s disclaimer.

Only pets have been buried there, and the ‘lot’ has potential.

#193 Steve on 04.20.14 at 5:07 am

Can you imagine how it feels to be the lunatics who didn’t “win” this house? Would that scare you straight?

#194 TS on 04.20.14 at 7:12 am

To #144

Mississauga prices are really going up like crazy! However, I find that a lot of the houses for sale have been sitting for weeks if not months (in my area anyway) and some of the homes that didn’t sell last year have been relisted at last year’s price.

Take a look at this gem.

$1,129,000
MLS® W2880035
4 Beds, 4 Baths
2274 MELTON CRT, Mississauga
More Information

Sorry about the link – I’m still learning how to do this.

#195 NoName on 04.20.14 at 8:35 am

funny

https://lh6.googleusercontent.com/-wcw0h9aQp8w/U1NFxCW6npI/AAAAAAAAQUQ/Pd9jjT49L18/w855-h731-no/easter.jpg

#196 miketheengineer on 04.20.14 at 8:43 am

Garth et al:

We need to say a big prayer for this couple. They are going to go through hell in the next few weeks and months. Imagine the stress on the marriage.

Good contractors have liability insurance. Consulting engineers have liability insurance. Carson and Dunlop has liability insurance. I imagine this is going to take a while to resolve. The lawyers are going to make out pretty good I imagine with this one. I would imagine that “anyone” who touched this project could be assigned fault…but the judge will decide.

Pray for this young couple, they are going to need it.

#197 Herb on 04.20.14 at 8:44 am

#188 Steve French,

you have described the essence of Christianity. No wonder it’s only preached, not practiced.

#198 Ronaldo on 04.20.14 at 9:20 am

#187 Steve French – did you just watch the movie “Noah”? What a disappointment that was.

#199 Big Brother on 04.20.14 at 9:28 am

#179 Smoking Man on 04.19.14 at 10:53 pm
The truth hurts Smoking Man. Go to the Loosers lounge and have a drink.

#200 T.O. Bubble Boy on 04.20.14 at 9:32 am

$900k House of the Day for Sunday, April 20th:

3 Finalists
1) Another 2-for-1 offer! $899k 19ft wide Semi-Detached and $949k 23-ft wide Semi-Detached being “sold together” for a $1.849M 42′ x 125′ Lot.
2) 16ft wide house in Riverdale with TINY bedrooms (2 of the bdrms are under 8ft wide)
3) A 16ft wide rowhouse in Queen West / Little Italy, with a LOT of Black and White tile.

WINNER
I have to go with #3… this place has it all: only 16ft wide, attached (meaning, tough to reno), bizarre renovation choices (was there a sale on black/white tiles?), and even a horrible picture of the bathroom with the toilet seat up!

#201 Republic_of_Western_Canada on 04.20.14 at 9:50 am


[…]
Republic_of_Western_Canada :

Much better is to use pre-stressed insulated-core factory-built concrete panels, both for below- and above-ground structural & weather-envelope layers.

interesting, that doesn’t sound like residential construction – at least not single family?

Detached residential construction is anything that it’s built out of.

Just because some region is familiar with certain materials/modes of construction [of anything, really], doesn’t mean that’s the best, or even only, potential solution.

Detached residential is one of the most conservative types of construction there is, and the national/provincial building codes reflect it. If your aim is just to crank out tract housing plans with minor tweaks at a thousand bucks per print, or employ a dozen hammer-bangers for a couple months on some chip-board doghouse to get a 20% markup, then you probably feel most comfortable with marketing run-of-the-mill monstrosities. Sort of like U.S. car manufacturing in the 1970’s.

Face it. In over-populated areas of this country, the detached housing paradigm is cooked. Better to have well-designed and built apartments to live in, and buy shares in REITS owning them, then to pretend you’re Dan’l Boone in your own little cabin in the ‘burbs or some ancient worn-out residential borough.

And if you’re not a denizen of Burnaby or the GTA, and have some rural oilwell service, or mixed farming operation (or both), you can get much better housing materials and methods today than 30-40 years ago. A bigger content of it can come from factory or industrial sources.

#202 Aggregator on 04.20.14 at 9:54 am

Top ten rising CPI items in March (YoY%)

17.9%..Natural gas
10.5%..Fish, seafood and other marine products
9.1%…Fuel oil and other fuels
8.0%…Other tobacco products and smokers' supplies
7.6%…Cigarettes
6.0%…Water
5.9%…Women's footwear (excluding athletic)
5.6%…Reading material and other printed matter (excluding textbooks)
5.1%…Laundry Services
5.0%…Electricity

Top ten declining CPI items in March (YoY%)

-4.5%…Women's Clothing
-3.5%…Home entertainment equipment, parts and services
-2.6%…Other clothing accessories
-2.0%…Leather clothing accessories
-1.9%…Health care goods
-1.8%…Household equipment
-1.5%…Athletic footwear
-1.4%…Men's Clothing
-0.9%…Recreational equipment and services (excluding recreational vehicles)
-0.8%…Travel services

Funny how woman are willing to cut back on buying clothes, but still keep buying shoes.

#203 Aggregator on 04.20.14 at 10:17 am

Remember what I said about food companies stuffing whatever it takes in your food to keep prices down?

General Mills abandons controversial legal policy to strip consumers of rights

General Mills has completely reversed itself on a controversial legal policy that saw it try to strip consumers who downloaded coupons or otherwise participated on its website from the right to sue the U.S. food giant.

The maker of Cheerios found itself facing criticism last week after The New York Times reported that the company had changed the fine-print legal terms on its website to say that users were agreeing to have any dispute with the company referred to private arbitration and that they could not sue or join a class action.

Eat and feed your kids at your own risk.

#204 H&R Blockhead on 04.20.14 at 10:18 am

My online chequing account with no fees is currently paying 2.5% for new deposits up to 100K for the next 3 months.
Moving cash from Orange guy’s shorts almost doubles the interest.
Why not?

#205 Daisy Mae on 04.20.14 at 10:26 am

#130 Shawn: “If debit cards could be used online then online retailers would save a bundle. It’s a mystery why debit issuers have not figured a way to use debit online.”

*********************

Visa has their ‘Virtual Visa Debit’ for online shopping.

#206 Doug in London on 04.20.14 at 10:32 am

@World According To Garth, post #154:
It was also the one of the hottest summers ever on record in Australia. Even in the far south state of Victoria (remember in the Southern hemisphere farther south is normally cooler) it was unusually hot. Does anyone remember players at the tennis match in Melbourne who were unable to play because of heat exhaustion? So what exactly does that mean? The reality is that one unusually hot or cold season isn’t enough to indicate a long term trend.
What you should be wondering is how those houses are gong to hold up in more extreme weather events. Been to Belleville, Ontario recently? That’s what the meteorologists and climatologists mean.

#207 Old Man on 04.20.14 at 10:46 am

I have to correct your perception of Jesus. Tax records were found many years ago where Joseph and Jesus lived with details of occupation and taxes paid. They were both real estate developers and builders that developed projects for the community near and far. This was a very wealthy family of means which is why Jesus travelled with his own personal treasurer or banker if you will known as Judas.

#208 Doug in London on 04.20.14 at 10:46 am

@Steve French, post#188:
If that were true, then why is Christianity nowadays dominated by right wing extremist neoconservative (and very antisocialist) ideology? I probably opened up an extra large can of worms by asking this question.

#209 Daisy Mae on 04.20.14 at 11:09 am

#169: “Thing about those “semis” is you have little if any protection against what your all too close neighbour does that might affect your property value and you are attached at the hip – practically literally. As much as I hate condos, at least you have a strata that will make and effort to protect the interests of others against the renegade acts of another.”

******************

Generally, the ‘shell’ of townhouses are insured thru the strata corp, responsible for maintaining the integrity of the buildings. Homeowners insure contents only. Bylaws are strictly adhered to.

#210 airhead princess on 04.20.14 at 11:40 am

oh boy…another case of civil servants acting badly. What drives these individuals to demand these sense of entitlement that they should live a life of caviar and champagne while their real station in life is somewhat lower than the rim of a public toilet?

http://news.nationalpost.com/2014/04/18/kwantlen-polytechnic-university-near-vancouver-mired-in-allegations-of-misused-money/

#211 airhead princess on 04.20.14 at 12:14 pm

Chaos at the BOC…….biggest turnover in 79 year history…..rats abandoning the ship……or a putsch of leftist Luddites? We already see the devastating effects of Poloz’s dollar killing strategy. Seniors will starve and children hunger as food prices soar. Is the BOC management being readied for a move that will take Canada back to the dark ages of Liberal madness of a union led death spiral?

http://www.bnn.ca/News/2014/4/14/Poloz-cites-Bank-of-Canada-continuity-amid-rate-panel-turnover.aspx

It is rumored that Stephen Harper has been daggered by the black dog…..and while his illness overwhelmed him the palace intrigue artists and backstabbers have snatched plum posts

#212 LTRFTW on 04.20.14 at 12:17 pm

1) Couple buys dump.
2) Couple insures dump.
3) Dump falls down.
4) Insurance pays couple to replace dump.
5) Couple gets new house.
6) Everyone’s insurance rates go up to cover couples loss.

Score :

Irresponsable 1

Responsable 0

My insurance rate went up 12 % this year. Can’t wait for next year !

#213 shawn on 04.20.14 at 12:25 pm

Visa Debit Cards

Daisy mae at 205:

Visa has their ‘Virtual Visa Debit’ for online shopping.

*****************************************

Thank you, I understand Visa has moved into the Canadian debit business and charge FAR more than the typical 12 cents of Interac debit cards.

Generally I support free markets but for various reasons VISA and MasterCard get away with monopoly pricing.

#214 shawn on 04.20.14 at 12:30 pm

Reward Credit Cards

Are a bit of a scourge.

Sort of a giant kick-back scheme. Visa charges the retailer say 3% but then kinks back a lot of that to the card holder.

It’s really another way we richer people are subsidized by the poor who don’t have a reward card and who often pay interest on credit cards.

People who pay every month get convenience and rewards at little or no cost. Who pays the cost? Kick backs from the retailer subsidized by high interest rates to the poor.

But as free marketers, it’s all good, all as it should be. No need for guilt, right? The free market loves us. For the bible (Wealth of Nations) tells me so.

#215 shawn on 04.20.14 at 12:58 pm

More-on Reward Credit Cards

To elaborate: The credit card companies said, hey let’s charge the retailers 1% extra, we will kick that back to you. You will have an incentive to move all your spending to the credit card, which will help us credit card companies. We both win.

By the way we just changed your old reward card to a higher reward card automatically without consulting you. You can thank us later. (CIBC aerogold did just this several years ago)

Losers? oh yeah the retailers are pretty well forced to keep accepting our cards. They’ll grumble but they will still accept the cards. Maybe they will raise their prices but if so everyone will share in that pin. In the net dear credit card holder you and the card companies will win. Retailers and or non-credit card companies will pay for that. See, it’s ALL good (for us).

#216 shawn on 04.20.14 at 1:00 pm

should be share in the pain not pin, and non-credit card CUSTOMERS (not companies) will pay for that. (Sucks to be them)

#217 shawn on 04.20.14 at 1:06 pm

LTRFTW, there is no insurance against houses collapsing due to structural or renovation issues. Fire yes, collapse, no. At least regular house insurance will not cover it.

If there were insurance the smart companies would simply avoid insuring dumps or charge a lot more. Insurance is one business where blatant discrimination is to be encouraged. It’s not well understood that discrimination is perfectly legal except where it is specifically not allowed, which is in business on the basis of gender and race and a few other things.

In insurance, discrimination based on age and condition of house is perfectly legal, as it should be.

Discriminating taste, in arts and in mates, used to be a virtue.

#218 Kingarthur on 04.20.14 at 1:13 pm

From the Southlands Nursery blog in Vancouver:

“The real estate market in Vancouver is truly insane. There cannot be another city, anywhere, with more people ‘cashing out’ and leaving their gardens behind. It is not a good thing, because nearly every transaction results in a massacre of not only the house, but the garden and every tree possible. It is unbelievable. Neil Young sang about ‘The needle and the damage done – every junkie’s like a setting sun’. Here, every FOR SALE sign is like a setting sun. Bye bye garden, bye bye customers. The new house will be sold and ‘landscaped’ , and very often left unoccupied. How? Why? Can you guess? If you do not live in Vancouver, you probably cannot guess. It all comes to getting cash out of China. It is that simple. What were once ‘Marcus Welby M.D.’/’Donna Reed’ neighbourhoods are now terrifying strips of copper domes, glass blocks, etched glass and Tudor lanterns. Gated, paved, with security cameras and nobody home. Hundreds of millions of dollars have landed here. Trillions of dollars have left China. You would think this is a good thing; marvelous in fact . Maybe, if you are selling lighting fixtures. For the nursery industry, and horticulture in general in my area, it is an obliterating tsunami that pays it way. As an example, a friend of mine listed their modest house on a 66′ lot at an optimistic 1.9 million . In any other city, it would have been 300,000.00, but Vancouver is different. She had eight offers before the listing actually listed, and accepted 2.8 million, all cash , no subjects. There were two offers exactly like this. Today, the house sits empty, the much-loved garden abandoned . Just like mine”

http://southlandsnursery.com/tomspeaks/?p=1255

#219 Old Man on 04.20.14 at 1:46 pm

#217 shawn – what is a construction performance bond or surety as there are several types? This can be issued by an insurance company between a property owner and a contractor for specific work to be completed with special provisions such as liability. I for one would want a law firm with deep pockets to approve of these provisions in writing especially on a semi involving ancient foundation work. They carry a huge amount of E&O insurance; thus if anybody screws up I have two parties to sue.

#220 T.O. Bubble Boy on 04.20.14 at 2:05 pm

Just to mix it up a bit… here is a 4/20 bonus: the $420k House of the Day (best deal at $420k price point).

Yes – that’s right, there are still some dwellings in the GTA for $420k (and I didn’t pick any condos):

1) $419,999 Detached Bungalow near Lakeshore&Kipling
2) Semi-detached near Derry & 427
3) Semi-detached near Victoria Park and St Clair E

WINNER
Gotta go with #1… it may be in “as is” condition, but it is a detached in Smoking Man’s favourite hood, and can be built into a detached McMansion for far less total cost than many in that area.

Or, just move further out to Brampton or Ajax, and get a full burbs-style house:
http://www.realtor.ca/propertyDetails.aspx?propertyId=14183791&PidKey=1826804803
or
http://www.realtor.ca/propertyDetails.aspx?propertyId=14204324&PidKey=694870445

#221 shawn on 04.20.14 at 2:09 pm

Old Man, yes agreed. I was speaking of home owner insurance.

In this case the contractor will be sued. Given an engineer was involved there probably is some insurance from either the contractor or the engineer. It will takes years to settle.

Never buy a dump, except to tear it down.

#222 bdy sktrn on 04.20.14 at 2:24 pm

garth says never buy re with anyone you are not sleeping with.

i would say a semi/duplex falls into this category.

agreed in some ways it’s even worse than a strata.

i think it looks rather ridiculous when the 2 sides of a semi are painted/finished differently. nice co-operation there.

#223 :):( Ying Yang on 04.20.14 at 2:25 pm

#199 Big Brother on 04.20.14 at 9:28 am
#179 Smoking Man on 04.19.14 at 10:53 pm
The truth hurts Smoking Man. Go to the Loosers lounge and have a drink.

………………………………………………………..
Smoking man what is the truth? I have to know. I see you did Atlantic City, one place I’ve never been.

#224 takla on 04.20.14 at 2:25 pm

RE gladiator#60….theres more to the story,during a rain storm last yr a leak developed ubove his bed as he slept.The drywalled ceiling ubove swelled to the point of eventual collapse,,,right on top of him sleeping.The attic space ubove had aspestdos insulation and it filled his sleeping quarters,all in the dark of night,poor fellow thought the world was comeing to an end.

#225 DAN on 04.20.14 at 3:00 pm

#139 Republic_of_Western_Canada

Some of your facts don’t check out.

Firstly, I’ve never seen these used for a residential application. I design them for bridges, those neoprene seals deteriorate over time due to the same settlement that causes cracking in a poured foundation.

Pre-stressing the panel does the exact same thing for the wall that rebar would (preventing cracking against horizontal forces), just on a much larger scale. Doing this would not protect against settlement.

If somehow the joint/settlement problem didn’t exist, a cubic meter of concrete costs 130$ where as one single precast prestressed panel costs more than 10k$.

#226 World According To Garth on 04.20.14 at 3:00 pm

#206 Doug in London on 04.20.14 at 10:32 am
@World According To Garth, post #154:
It was also the one of the hottest summers ever on record in Australia. Even in the far south state of Victoria (remember in the Southern hemisphere farther south is normally cooler) it was unusually hot. Does anyone remember players at the tennis match in Melbourne who were unable to play because of heat exhaustion? So what exactly does that mean? The reality is that one unusually hot or cold season isn’t enough to indicate a long term trend.
———————————————————-

Whoops !!

http://www.news.com.au/technology/environment/snow-falling-in-australia-in-summer-that-is-all/story-e6frflp0-1226775945701

So which one of us is Cherry Picking. The ENTIRE of Lake Superior FROZE OVER. The USA had snow in 48 of 50 states and was cold the entire winter. Most of Australia IS DESERT/SCRUB (85%). And your wondering why it’s hot?

#227 Old Man on 04.20.14 at 3:06 pm

#168 Smoking Man – Anytime you might want to enter Mexico will have the Amazonas waiting for you. They will protect you from Big Brother, and mess up his manhood if you want this done. By day they dress well and fit into the business crowd like ladies walking at Yonge and Bloor, but at night they ride horses wearing masks like banditos.

#228 Almost A Boomer on 04.20.14 at 3:14 pm

These people aren’t investors and they deserve the financial woe they are now faced with. I doubt the insurance will be in a hurry to pay for this fiasco. This couple intended to avoid paying taxes when they flipped it to the next greater fool. Thankfully no one was hurt. The people living in the attached house should be fully compensated, by this couple, for every single penny the collapse costs them.

#229 triplenet on 04.20.14 at 3:36 pm

#167 Devils Advocate

In BC a duplex or semi detached residence has a unique prefix in its legal description. The letter “S”.
This means it’s a strata property under condominium ownership.
Did you pass the real estate exam?

#230 Derek on 04.20.14 at 4:11 pm

When you think about it. If a dump like that is worth 900k then price of new build in the burbs have no way but up. Some hoods had caught up though.

#231 just an observation on 04.20.14 at 4:45 pm

#191 Don Der on 04.20.14 at 2:46 am
WATG and HABS… you people are bang on – release a book that I can take out at the library…..good spicy dialogue tdy from all. I love this blog.

Quick note : I bought a 2 bdrm townhouse in good ol’ Abby in 2005 for $125K….they were selling or as high as $190K in 2007, then I sold in 2012 for $170K, and those same units are now listing for$125….poor abby/chilli – they are still Vcr’s ugly sisters for now. I may just sell in Surrey and go back to abby, this time in a house. Only problem is a abby has a rental property with a $100 million mtge and no tenant and a $250 million bill coming for a new water plant – TBA….

Me – you have any links to those $125,000 townhouses in abby bro ?????thanks and cheers

#232 just an observation on 04.20.14 at 4:52 pm

Pray for this young couple, they are going to need it.

Me – yes sure, I’m gonna pray for them…LOL
Give your head a good shake honey, they ARE THE VERY PEOPLE WHO MAKE THESE GRUESOME TEARDOWN SHAKS COST AS MUCH AS THEY DO.
Aha, sure, lets pray now…..NOT

#233 Old Man on 04.20.14 at 5:22 pm

#221 shawn – I will explain what happened with that property. A city building inspector dropped by to see the work in progress and the workmen had done something wrong. He told them to adjust something as all further work was to stop immediately until he received a letter from a construction engineer at the city. It was too late as the collapse came shortly thereafter; the question remains if both semi’s can be saved.

#234 Smoking Man on 04.20.14 at 5:23 pm

YING YANG
Amazing road trip, about to cross the border, U Turn.. Ah One more night Seneca…..

Hooked on 4 card poker….. Took the house down in AC

#235 Fraud investors on 04.20.14 at 5:23 pm

As the tax season is here, I really hope that CRA is putting some extra efforts on those people who own lux properties but claim min income to take advantage of the system. I heard a lot of investor immigrates paid the interest of 160k, now the whole family is using the low income support, even getting a free community centre pass for fitness, swimming etc. I feel so sick that we are paying the income tax, and also pay all the fees, but are priced out forever:(

#236 Herb on 04.20.14 at 6:59 pm

#208 Doug in London,

because adherents of the “right wing extremist neoconservative (and very antisocialist) ideology” are mindless idiots who will believe anything as long as it relieves them of any responsibility for anything.

Too bad they haven’t heard of the “I shall vomit them out of my mouth”!

#237 dan on 04.20.14 at 7:14 pm

why just mostly anglos build their houses from garbage?
Is it a cultural thing or something else?

#238 wallflower on 04.20.14 at 10:53 pm

#124 WhiteKat on 04.19.14 at 11:31 am

WhiteKat, you obviously have an issue. But you have the wrong blog. Tired of your issue. And you don’t much like what people say in response to your issues. Get therapy, maybe a lawyer, and a financial advisor. You are a dual citizen. Fix it, or get over it.

#239 Doug in London on 04.20.14 at 11:19 pm

World According To Garth, post #226:
Have you ever actually seen a map of Australia? Thredbo, New South Wales in in the Blue Mountains where it is always cooler than at lower elevations. Meanwhile, as I said before, tell people who lived in the state of Victoria who endured a exceptionally hot summer, that the climate is cooling. yes, much of Australia is desert/scrub, but if it’s been hotter there in recent years it’s due to changing weather patterns and not vegetation.
As for Lake Superior, it is bordered by NORTHERN Ontario, NORTHERN Michigan, NORTHERN Wisconsin, and NORTHERN Minnesota. It’s the most northerly of the Great Lakes, where its normally colder in the winter. Are you still wondering why it’s more likely to freeze over? That it was so cold this past winter surprised a lot of people. Yet many years ago, these colder winters when Lake Superior froze over were the norm and not the exception. Using a bit of basic deductive reasoning, that would suggest most winters in recent times were milder. Now let’s try to figure this out; colder winters many decades ago followed by milder winters in the last 2 decades (remember the exceptionally mild “winter” of 2011-2012? Probably not.), then one cold winter. The short term (1 year) trend is definitely colder, but what about the longer term trend? Do something you’ve never done before and actually think about your answer before posting.

#240 Doug in London on 04.20.14 at 11:32 pm

World According To Garth, post #226:
For many years climatologists have been trying to tell anyone who will listen is we can expect more extreme weather events. In Australia there was snow in December (in the mountains of course, not at lower elevation) followed by a record hot summer. Over here many mild winters followed by an exceptionally cold one. Nope, no extreme weather events going on here or in Australia.