The fallacy brothers

Drew and Jonathan Scott are interesting. Born in Alberta, moved to LA. Serial entrepreneurs, risk-takers, entertainers. They’ve done everything from manage a bikini store and been mall cops to flipping houses, recording country music, selling a cruise tour and of course, creating the Property Brothers TV franchise wherein they appear as a realtor and a contractor. On that show they make dewey young couples orgiastic with real estate consummation. Oh yeah, they also do roadshow seminars on how to get rich by trading houses in, say, the east end of the GTA.

Blog Dog Steve’s buddy attended one of those steamy sessions.

“Essentially the scheme was to use real estate to bring you wealth,” he reports. “All simple too. Can’t fail. I was new to hearing this type of scheme because there simply aren’t any get rich quick schemes out there. It takes time.

1. Buy a home and rent it. Renter pays the mortgage and eventually you sell and make a big pot of money.
2. Before you sell that house you remortgage the house for max value and then sell. This avoids capital gains taxes from the future “guaranteed to go up” sale. (I threw in the cautionary “but what if it goes down!”)
3. Then you repeat the process.

“My disclaimer first off is, I haven’t seen the actual talk.  That being said, this sounds like the ultimate ponzi scheme. Units have exploded in the area with values appreciating +30% in the past few years. The drawback is that there are hundreds more, if not thousands in the pipeline.

“The idea of sucking all equity out of a home simply to avoid taxes could leave a greater fool with little liquidity in the event of an economic shock, no?  Job loss, renters wrecking the place, interest rates returning to their upward trajectory, etc. Plus the owner still carries the home insurance, mortgage interest, loss of potential gains in locking up investable money, etc. This probably don’t end well, but the Property Brothers will be fine.”

So, is this a legit strategy?

Well, yes, there are ways to avoid paying big taxes on a rental property that’s escalated in value. For example, you should own it for a number of years – not a number of months. That way any profit can be claimed as a capital gain, not business income. If the CRA thinks you bought the place just to flip – even if rented for a year or so – it might decide this was a commercial deal and add the windfall amount to your usual taxable income. Ouch. It gets taxed at your marginal rate.

But if the profit’s a capital gain, 50% is tax-free with the remaining amount added to your income. The size of the cheque to Justin drops by half.

Of course, when selling an investment property you can also add to the ACB (adjusted cost base) the land transfer tax and other closing costs incurred when you bought, plus deduct the realtor commission from the sale proceeds. Capital improvements (but not repairs) are eligible as deductions from the selling price, and help reduce the capital gain amount.

One caution: during the time you own the property don’t let your accountant depreciate it for annual tax purposes. That causes a ‘recapture’ of depreciation when you come to sell and that = more tax.

Now, how about the Property Brothers’ mortgage-it-to-the-hilt strategy? Is it true if you slap a big loan against the property before you sell, sucking all the equity out that you’ll reduce or eliminate the capital gains tax?

Of course not.

Mortgaging a rental property will let you remove equity, for sure (just like borrowing against your home), and the amount taken will not be considered taxable income. It’s a classic move for many who have been long-term owners of apartment buildings, for example. But heaping on a loan has no effect on the tax payable when you dump the property. They made that up. Financing real estate does not add to nor subtract from the adjusted cost base. The CRA couldn’t care less.

So if you buy a house to rent then sell after a decent period for a profit, cap gains will apply to the difference between the purchase price + closing costs, minus capital improvements and commission. If you borrowed all the equity prior to the selling date,  you just have to pay it all back (plus a mortgage break fee) upon closing.

Maybe Drew & Jonathan should stick to being  hurtin’ heartthrobs:

 

119 comments ↓

#1 Sold Out on 02.13.19 at 2:10 pm

I guess that if you have no marketable skills or talent but want to be famous, real estate porn is a low-barrier option.

#2 For those about to flop... on 02.13.19 at 2:18 pm

Recent sale report.

Well it didn’t go for less than a million, bit this block of land in South Vancouver touches the marker.

The details…

442 e 56th ave,Vancouver.

Sold 1.05

Originally asking 1.39

Assessment 1.37 down from 1.42

So they asked and couldn’t get anywhere still assessment.

Yes, still up there.

At this stage of the correction I haven’t seen much go lower south of 33rd Avenue.

A similar situation to this just sold near Knight and 37th.

Perhaps the best bargain on the South Slope recently was the by people who snapped a decent house on Inverness for 1.02

You have to dig, and like I said the prices are still elevated but there are relative bargains for those that need to change their living situation and most importantly competition has gone bye-bye.

Prices will continue to go down-down…

M44BC

2018-10-12 : $1,390,000
2018-11-18 : $1,275,000
Then 1.19

https://www.zolo.ca/vancouver-real-estate/442-east-56th-avenue

https://www.rew.ca/insights/144499/442-e-56th-avenue-vancouver-bc

#3 For those about to flop... on 02.13.19 at 2:19 pm

Recent sale report.

I recently showed a loss of close to 20% at 1900 Mackay Avenue and these guys just down the road did their best to try and match them, and although they fell short in that regard they still got a decent kicking.

The details…

1970 Mackay Ave, North Vancouver.

Paid 1.81 March 2016

Sold 1.67 January 2019

Originally asking 1.99

Assessment 1.61 down from 1.73

13% after expenses or roughly 230k down the drain.

Gonna sting for a while.

Probably not Mackay, right about now…

M44BC

https://www.zolo.ca/north-vancouver-real-estate/1970-mackay-avenue

#4 AK on 02.13.19 at 2:22 pm

I miss the Tom Vu Infomercials…

#5 Alberta Boy on 02.13.19 at 2:36 pm

These clowns are on at the gym every morning and then many of my patients choose to watch them during their dental procedures during the day. I cannot escape them…..they’re even on my favorite blog now. God help me.

#6 Richie on 02.13.19 at 2:58 pm

Toronto Life featured a similar narrative last week. How a 32-year old immigrant from Delhi who started with nothing, became a millionaire with a 10-home GTA portfolio.

The Canadian Dream! If he can do it, anyone can!

Spare me…

https://torontolife.com/real-estate/32-year-old-managed-accumulate-10-homes-toronto/

#7 Lee on 02.13.19 at 3:13 pm

#6 Richie,

What is not to believe? He has purchased properties in an up market. After sale costs, his portfolio is worth about $9,500,000.00, minus what I will guess are mortgages equaling about 50-60% of this. He says half of the value of the properties is owed to his partners/investors, so his share is about $2,000,000.00 to $2,500,000.00 in equity, from which he will pay $200,000 to $300,000 in taxes on their sale. You find it hard to believe someone is worth $2,000,000 or so at 32 years old buying real estate in an up market? I’d say it is fairly typical of real estate investors in Toronto/GTA over the last 10 years.

#8 Remembrancer on 02.13.19 at 3:25 pm

Da boss:
One caution: during the time you own the property don’t let your accountant depreciate it for annual tax purposes. That lowers the ACB so when you come to sell, it could squeeze your capital gain higher, and that = more tax.
———————————————————
Though maybe enticing add some expenses, depreciation is definitely a no-no, especially if you are at the level of Property Brothers rental investment advice. For the average wanta-be rental property baron doing this with an as-is SFH or a condo they basically won in a raffle (otherwise the #s almost never work) is more hurt then help and if anything, extra billing from your accountant…

#9 Richie on 02.13.19 at 3:28 pm

#7 Lee

I wasn’t disputing the validity of what he’s achieved. That would be silly. I’m more skeptical of the message and it’s broader implications. “if you look outside the city, to areas like Waterloo and York Region, where public transportation is starting to improve, it’s still possible to find detached homes worth investing in”.

#10 Remembrancer on 02.13.19 at 3:34 pm

Maybe Drew & Jonathan should stick to being hurtin’ heartthrobs:
———————————————————-
Or maybe someone is running an Appraiser Brothers pitch next door – they and like you said, the bank getting the mortgage retirement fees, are the only winners in that scheme. Maybe this is a backup job for the GTA home inspectors who got flattened in the last couple years of no condition offers…

#11 Ponzius Pilatus on 02.13.19 at 3:42 pm

#76 Ubul on 02.13.19 at 12:00 pm
40% of Canadians don’t pay income tax (source OECD). Whoah! That’s a lot.
————-
No surprise.
That’s what happens when you wipe out the middle class.
Only getting worse.

#12 Victoria Real Estate Update on 02.13.19 at 3:59 pm

There will always be those who will try to convince you that real estate is a no-lose investment even if the market they are trying to pump is in a major housing bubble.

200 years of housing bubble history proves that buying investment properties at or near the peak of a major housing bubble is a bad idea.

Canada’s bubble is bigger than almost anybody is willing to acknowledge. And it isn’t only the GTA and Vancouver that have housing bubbles.

Plenty of other Canadian cities have seen house prices basically triple since 2000 while gains in incomes have barely moved in comparison. Montreal is a good example.

Housing price gains (from 2000 to peak):

* Montreal…….( 2.9 x) … (almost tripled)
Phoenix………( 2.9 x)
Los Angeles…(2.8 x)
San Francisco…( 2.6 x)
Seattle…………( 2.6 x)
San Diego….….( 2.5 x)
Las Vegas…( 2.35 x)
Miami……..( 2.25 x)

Sources: Teranet’s Index, Case-Shiller Index

And 200 years of housing bubble history proves that bubble cities always experience major price corrections that restore that city’s long-term price to income ratio.

The 2006 US bubble demonstrated how bubble cities go through major price corrections while non bubble cities are affected to a much lesser extent.

US CITIES – PRICE DECLINE (%) (after 2006/08):

* San Francisco, California (-45%)… (in 3 short years)
* San Diego, California (-42%) * Los Angeles, California (-41%)

* Bismarck, North Dakota (-1%)
* Shreveport, Louisiana (-1%)
* Amarillo, Texas (-2%) * Cedar Rapids, Iowa (-2%)
* Davenport, Iowa (-2%) * Fargo, North Dakota (-2%)
* Texarkana, Arkansas (-2%)
* Oklahoma City, Oklahoma (-3%)
* Rapid City, South Dakota (-3%) * Wichita, Kansas (-4%)
* Great Falls, Montana (-4%) * Billings, Montana (-4%)
* San Antonio, Texas (-4%) * Little Rock, Arkansas: (-4%)
* Lexington, Kentucky (-4%) * Austin, Texas (-4%)
* Sioux Falls, South Dakota (-4%)
* Omaha, Nebraska (-5%) * Tulsa, Oklahoma (-5%)
(Sources: Case-Shiller Index, All-Transactions House Price Index)

#13 The truth is.... on 02.13.19 at 4:05 pm

DELETED

#14 Dolce Vita on 02.13.19 at 4:06 pm

Paris Match + 2 mouse thumb scrolls + some very bad Drug Store Cowboy hurt me music.

Well, that was concise.

#15 Calgary Cowboy on 02.13.19 at 4:08 pm

Garth…you should’ve offered a disclaimer before posting that video…my dog and I just got sick…

#16 For those about to flop... on 02.13.19 at 4:25 pm

Recent sale report.

Haven’t seen too many losses in this relatively in demand area and these guys only have to foot the expenses after getting back out what they put in last year.

The details…

4458 James st, Vancouver.

Paid 1.69 August 2018

Sold 1.69 January 2019

Originally asking 1.78

Assessment 1.74

So they only picked it up in August and put it back on in the middle of January this year.

Maybe they got spooked,it was only on the market for two weeks and they took the loss as we about to enter traditionally the hottest time for the market each year.

85k hit roughly, and they could have perhaps made it out whole if they found that one pet that loved it but the clears didn’t fancy their chances.

https://www.zolo.ca/vancouver-real-estate/4458-james-street

I might as well do a double banger as this sale nearby might get a few people a glimmer of hope as well.

I featured these guys in a Race to a million post and it went close.

The details…

4278 John st,Vancouver.

Sold 1.02 February 2019

Originally asking 1.25

Assessment 1.35

So it’s the first totally liveable house I have seen go that low for a while.

25% less than assessed.

I actually think the realtor made a bit of a boo-boo with this one.

Here’s why, when they originally put it on late in the summer, instead of just putting a photo of the house they had a watercolour type of picture, I guess trying to make it more whimsical than it was.

It didn’t work, it’s the bottom of the market, people just want to see how liveable it is to see if it’s an option to avoid paying an exorbitant amount on rent.

More and more cheaper options were listed and they lost some of the advantages they had.

They might have flushed some money down the John…

M44BC

https://www.zolo.ca/vancouver-real-estate/4278-john-street

#17 Phylis on 02.13.19 at 4:26 pm

#13 the truth is… deleted. Ha ha sounds like the justice committee session.

#18 Dave on 02.13.19 at 4:47 pm

Real estate in BC in dead, nothing is moving. Even the trade/contractors are complaining its too slow. Layoffs

#19 The Roadshow on 02.13.19 at 4:57 pm

These carnival barkers travel from city to city selling tickets and other stuff giving away the secret of success in how to make fortunes in Real Estate to the suckers who will pay. Why didn’t they keep their methods secret to make $millions themselves? This is tantamount of me finding a field full of diamonds, and selling tickets to the location. Its all a scam, just like the psychic who will tell you the winning lottery number for a fee of $25.00.

#20 Montreal tripled indeed on 02.13.19 at 5:03 pm

> #12 Victoria Real Estate Update

Yes, Montreal indeed tripled since 2000. And yet
I recall multiple claims here by mr. Turner that Montreal has escaped bubble territory and remains affordable – I feel to see how a tripling in value qualifies as that when wages have stagnated and Quebec’s economic prospects are not encouraging, to say the least. Or are we missing something? Is Montreal “different”?

#21 Montreal tripled indeed on 02.13.19 at 5:05 pm

“feel” –> “fail”

apologies!

#22 Brian Ripley on 02.13.19 at 5:26 pm

#12 Victoria Real Estate Update AND #19 Montreal tripled indeed

#12 Victoria Real Estate Update and #19 Montreal tripled indeed

Ok, I will take responsibility for Montreal’s current bubbly real estate :)

For year’s I have been plotting on my 6 big Canadian cities chart
http://www.chpc.biz/6-canadian-metros.html

…that “It remains interesting to note that the combined average sum price of a Vancouver, Calgary & Toronto condo is currently 56% (no typo) more expensive than a median priced Montreal SFD; in March 2018 this metric hit a high of 64%.”

Quebec average employment earnings have been keeping pace with Canada’s average
http://www.chpc.biz/earnings-employment.html

Since the Pit of Gloom in March 2009, average earnings are:
​Up 27% or 2.8%/yr in Quebec
Up 27% or 2.8%/yr in Alberta
Up 27% or 2.8%/yr Nationally
Up 26% or 2.6%/yr in Ontario
Up 24% or 2.5%/yr in BC

Ok, I take it back… there are other substantial reasons

http://www.montrealinternational.com/en/foreign-investments/why-invest-in-montreal/attractive-tax-treatment-and-tailor-made-incentives/

“A competitive tax burden”
Montreal – Ranked 2nd among the 20 largest metropolitan areas in North America in terms of the competitiveness of the business tax burden, all sectors combined

#23 Joe on 02.13.19 at 5:28 pm

-you put 30k down on a condo
-condo will be ready in 2 yrs
-things change in 2 yrs and you decide you want out
-condo is sold before move in date
-you get your deposit back plus some profit
-was not bought to flip, was the persons first home or condo purchase ever
-person rents
– is this a capital gain or taxed at your marginal rate or taxed at all?

thanks

#24 Mike on 02.13.19 at 5:28 pm

.
With latest political scandal looks like Trudeau really has to do something serious “to help millennials” aka raid RRSP, downpayment help and kick B20 out.

Don’t bother little kink in Vancouver RE.
Buy now or miss the gains next year and next…

#25 Penny Henny on 02.13.19 at 5:30 pm

Maybe I’m just too rough around the edges but I always thought that the property brothers looked like cavemen.

#26 yorkville renter on 02.13.19 at 5:34 pm

#20 – montreal tripled since 2000

And? that’s 4% growth over 18 years – wht is that so amazing?

#27 under the radar on 02.13.19 at 5:38 pm

Owners who hold property in a corporation, like most long term apartment building owners, do not mortgage to the hilt and take money out without tax. . If they do re- mortgage the money stays in the corporation and if they take it out , it either comes out as salary (taxable) or dividends (taxable)…. No free lunch. Of course they can mortgage to buy more property but that’s another story.

#28 Frances on 02.13.19 at 5:43 pm

They renovated my employer’s office in downtown Toronto last year. The renovations were supposed to be done in September 2018 but now there are signs around the office saying the Property Brothers are “asking for patience” while we wait for the renovations to be complete. I’d say we’re a pretty big client so surprised that they’ve left a whole office building hanging…could it be they bit off more than they could chew?

#29 Howard on 02.13.19 at 6:02 pm

I miss the Jerry Lewis Labour Day telethons…

#30 James on 02.13.19 at 6:11 pm

What would happen if you used the funds from the fully mortgaged property to fill up unused rrsp room, triggering a refund that would offfset Monies owed for gains?

#31 crossbordershopper on 02.13.19 at 6:14 pm

the basic premise is that real estate is all about deferring income on the rental properties, actually i know many that are minus with no funny cca rates or anything. real cash loss per month, all in.
but anyway, over time with inflation, prices do rise, and if you go back for most periods prices do rise, and yes the tenant is paying all or most all of the overhead. but over time the mortgage is being paid down.
ok, so you equity take out buy more properties, all this is fine, but in the end,
you can play this game and on paper you have a lot of unrealized capital gain, but you will end up giving a quarter of it to the taxman(50% of 50%) . but leverage is there. and available for many.
what i dont understand is how these guys get mortgages, because they wouldnt pass the income test, there is a lot of shadow money out there. no scotish traditional banker would lend to a kid with not much history or questionable work history.
that is the key, access to debt, and if your an east indian kid, if he fails, he is back to india, in reality they all take risk because they have nothing to loose, roll the dice.
he should be admired for his hard work , the problem is they add to the craze of higher prices and in return for his speculative zeal, society has to pay 6 to 8 times income for a home, many people are not as happy living below their means for many years just to afford a house so some speculators can profit from the game.
thats my view.
this whole canada , high real estate, low wage country, high taxes, restricted development etc, makes southern ontario a real lousy place to live.overpriced cookie cutter houses, made of paper for 700K, do people real know construction with real wood, and cement, and steel,

#32 Howard on 02.13.19 at 6:14 pm

#20 Montreal tripled indeed on 02.13.19 at 5:03 pm
> #12 Victoria Real Estate Update

Yes, Montreal indeed tripled since 2000. And yet
I recall multiple claims here by mr. Turner that Montreal has escaped bubble territory and remains affordable – I feel to see how a tripling in value qualifies as that when wages have stagnated and Quebec’s economic prospects are not encouraging, to say the least. Or are we missing something? Is Montreal “different”?

————————————————

In 2000 Montreal was only 5 years removed from Quebec’s near-death experience. The RE market there would have been severely depressed. So it’s a tripling but it’s a tripling from extreme artificially low levels.

#33 Reximus on 02.13.19 at 6:18 pm

They should try to build trump’s great powerful wall
.

#34 Howard on 02.13.19 at 6:18 pm

Garth did you hear about Redfin? Looks like the realtors have some new competition.

U.S. online broker Redfin dives into GTA’s real estate market

http://www.thestar.com/amp/business/real_estate/2019/02/12/redfin-dives-into-torontos-real-estate-market.html

#35 Ray on 02.13.19 at 6:34 pm

#26 yorkville renter on 02.13.19 at 5:34 pm
#20 – montreal tripled since 2000

And? that’s 4% growth over 18 years – wht is that so amazing?
—-
Get a better calculator. 4% over 18 yrs is 2.0

#36 Shawn Allen on 02.13.19 at 6:51 pm

#11 Ponzius Pilatus on 02.13.19 at 3:42 pm
#76 Ubul on 02.13.19 at 12:00 pm

40% of Canadians don’t pay income tax (source OECD). Whoah! That’s a lot.

************************
Is it? what was it 10 years ago.

Should children pay income tax?

Also, the only thing worse than having to pay a lot of income tax is not having to, because of well you know… tiny income.

#37 NoCash on 02.13.19 at 7:08 pm

I make a lot of money in the stock market!

I purchased 3 tons of cardboard at $114.00 a ton and sold at $116.00. That’s like ah? Well, I will let you figure it out.

#38 Terry on 02.13.19 at 7:16 pm

Ahhhhhh no way!!!!……………I’m outta here……….bye!

#39 Starving Realtor on 02.13.19 at 7:32 pm

Don’t you just hate it when people start thinking with their wallets ?

https://www.tricitynews.com/real-estate/metro-vancouver-firmly-a-buyer-s-market-as-inventory-jumps-prices-slide-1.23622915?utm_campaign=magnet&utm_source=article_page&utm_medium=related_articles&utm_campaign=magnet&utm_source=article_page&utm_medium=related_articles

#40 akashic record on 02.13.19 at 7:34 pm

Some people can make money from things that most people can’t. It’s a gift.

#41 akashic record on 02.13.19 at 7:48 pm

#36 Shawn Allen on 02.13.19 at 6:51 pm

#11 Ponzius Pilatus on 02.13.19 at 3:42 pm
#76 Ubul on 02.13.19 at 12:00 pm

40% of Canadians don’t pay income tax (source OECD). Whoah! That’s a lot.

************************
Is it? what was it 10 years ago.

Should children pay income tax?

Also, the only thing worse than having to pay a lot of income tax is not having to, because of well you know… tiny income.

—–

OECD is sophisticated enough that they probably adjust their report to children and other obvious factors.

40% is way up, compared to 1916, when 0% was affected.

I agree, somehow everyone is rather be rich and taxed very unfairly, than enjoying the benefit of tax exemption for being too poor.

#42 yorkville renter on 02.13.19 at 7:51 pm

#35 – duh (for me).. i did the ‘rule of 72’ in my head forgetting it’sto double your money.

so it’s actually just under 6.4%… still nothing to get all worked up about

#43 DON on 02.13.19 at 8:36 pm

#24 Mike on 02.13.19 at 5:28 pm

.
With latest political scandal looks like Trudeau really has to do something serious “to help millennials” aka raid RRSP, downpayment help and kick B20 out.

Don’t bother little kink in Vancouver RE.
Buy now or miss the gains next year and next…
**********************

70% home ownership…who is going to buy all these houses that people want to sell at inflated prices (already inflated prices). SO they goose the market for another year and then we hit the wall again??? Obviously people don’t think things through. Now with all the slow growth talk and (sorry Garth recession talk is in the news more and more).

#44 Greg on 02.13.19 at 8:39 pm

Hi Garth. A quick question, if you could.
I have a principal residence in the GTA and many years ago, borrowed against it to purchase a home on the lake outside the city. I’m considering moving north in the near future and am contemplating renting my ‘principal’ home for a few years.
Are there tax implications when I do sell the GTA property (at that point not living in it) and does my’cottage’ now become the principal residence by default? I’m figuring you’ll probably advise to sell it then move, but it has now a mortgage on it, and rental income for a few years would certainly help pay it down prior to selling.
Thanks in advance.

#45 For those about to flop... on 02.13.19 at 8:40 pm

Pink Snow falling in Vancouver.

Two cases on King Ed to show you.

Two different pricing strategies, likely to have the same result.

The details…

3804 w King Edward Ave, Vancouver.

Paid 3.2 March 2016

Asking 3.42

Assessment 2.78

https://www.zolo.ca/vancouver-real-estate/3804-west-king-edward-avenue

https://www.rew.ca/insights/81976/3804-w-king-edward-avenue-vancouver-bc

Second case.

The details…

1527 w King Edward st,Vancouver.

Paid 3.59 January 2016

Originally asking 4.99

Asking 2.98

Assessment 4.08

https://www.zolo.ca/vancouver-real-estate/1527-west-king-edward-avenue

You take the high road, I’ll take the low road, and I’ll try not to go bankrupt before you…

M44BC

#46 Yukon Elvis on 02.13.19 at 9:04 pm

Hey Flop. Your posts are interesting and informative. Keep up the good work. Some of the losses you are describing are quite significant. Average Canadians would have a hard time absorbing said losses. Do you have any knowledge or ideas or opinions on who is taking such big losses ?

#47 Devil's Disciple on 02.13.19 at 9:20 pm

@yorkville renter. Really? You are just digging yourself into a deeper hole. 6.4% returns annually for nearly 2 decades. Look in the history of house prices in Canada. Never been anything like that. Anything over 3% is unusual.

#48 acdel on 02.13.19 at 9:20 pm

#29 Howard

Me too!

Sort of brings us back where we actually cared for one another. :)

#49 Dave on 02.13.19 at 9:21 pm

I disagree with the advice given to not depreciate the rental property value. Depreciating the property allows the owner to defer paying tax until a later date when the property is sold. Please don’t make me give a lecture on the time value of money….$100 today is worth a lot more then $100 in 10 years. There is no argument – take the depreciation.

I would also advise rental property owners to explore using a “cash flow dam”. Essentially this is the part of CRA tax code that allows landlords to pay for expenses with borrowed money – this process creates another tax deduction for the interest on the borrowed money. If you deploy the cash flow dam it’s important to channel the rental income towards paying down non-deductible debt….ie primary residence mortgage, car loans, rrsp loans, etc.

#50 Vampire studies on 02.13.19 at 9:25 pm

20 Montreal/VREU – I checked the demographia studies
from 2005, 2010 and 2018. I got the following multiples/price/median income for Montreal

2005 3.5/169k/48k
2010 5.2/269k/52k
2018 4.6/306k/66k

If VREU wants to compare to teranet, I think you will find these in approximate agreement. In 13 years, there is an increase of 38% in income. Hardly stagnant, but probably not noticeable over shorter time frames.

Also 32 Howard notes the low market there in 2000. I suggest you pick the first market top after that to compare to now as well.

#51 Ustabe on 02.13.19 at 9:28 pm

#23 Joe on 02.13.19 at 5:28 pm

-you put 30k down on a condo…
– blah, blah, blah…
– is this a capital gain or taxed at your marginal rate or taxed at all?

While I in fact do know more than a little bit on this subject there is no way in hell I’m giving this type of advice on the Internet. Simply not enough information here, you need to engage an accountant who can properly advise you.

Joe, free Internet advice is for entertainment purposes only. Trust me you do not want to mess with CRA on stuff like this in today’s environment.

#52 Lillooet, BC on 02.13.19 at 9:34 pm

#46 Yukon Elvis on 02.13.19 at 9:04 pm
Hey Flop. Your posts are interesting and informative. Keep up the good work. Some of the losses you are describing are quite significant. Average Canadians would have a hard time absorbing said losses. Do you have any knowledge or ideas or opinions on who is taking such big losses ?
***********
have been baffled as well

a few years ago, a blog dog was able to provide mortgage information for an address.
I have not seen his comments for a long time.

#53 Lost...but not leased on 02.13.19 at 9:45 pm

You mean to tell us ……that anything on TV is not 100% true , and , in fact, …… may be tainted to some degree with less than honourable agendas ?!?!

PS : I think a conference call to T2, Jagmeet, Sheer and Garth’s Dog is in order.

#54 Hans on 02.13.19 at 9:53 pm

I think the strategy their promoting doesn’t have to do with reducing capital gains on the house, it has to do with reducing/removing taxable income that would come from rental income. So it would look like this….

Buy the house and remortgage it for a higher amount when/if you can. Being a rental property, the interest on the mortgage and all costs that arise from the operation of the property are deducted against the rental income. From what I understand, the CRA will eventually want to see that the rental makes money, but I have no clue how long before there’s an issue. What you do with the money could get interesting, as many appear to have used it to leverage even more into real estate (likely a big no-no given everything that you share on this blog free of charge). How would you feel about that borrowed money going into a balanced portfolio? Provided that the rent covers all expenses on the building plus is able to build a small reserve for the inevitable issues and repairs?

#55 N on 02.13.19 at 9:56 pm

Australia seems to have taken the decision to shield those who are deep into mortgage debts. Interest Rate cuts likely…..
https://www.youtube.com/watch?v=PIlKybGFrzw

#56 Doug in London on 02.13.19 at 10:15 pm

Yes, the fallacy brothers. I’ve finally figured out why there’s so much rubbish on TV. The benevolent government gives big tax breaks to TV stations to put this rubbish on. Why? So more people will leave the TV off and get outside more, get more exercise, be healthier, and thus put less strain on the public funded health care system. For every dollar lost in tax revenue there’s probably at least 20 saved in avoided health costs. It works amazingly well. I have a Fitbit that I’ve been using for over a year now and the results show my cardio fitness level to be excellent, the top category for someone in my age group. Good work, benevolent government!

#57 Keith on 02.13.19 at 10:20 pm

I have a friend who made a fortune in Vancouver real estate over the last thirty years. He would buy a property in the dead of winter, in cosmetically rough shape and an unfinished basement. He would build a basement suite, renovate the rest of the home quickly and cheaply and rent it out.

He would go to an appraiser, and get the new appraisal in the spring when he was finished. With the increase in equity, and a favorable market he would take out the equity and buy the next property.

He had to work with an investor, secondary lenders and has been massively in debt the whole time. He worked as his own property manager for years before he was able to pay someone else. With the real estate market in Vancouver he has made millions.

Very hard work, high risk but he made it happen. He has tried to teach others how to do it, but very few are humble enough to listen and learn, and few understand how hard you have to work to do this. It’s not for me for a number of reasons, but I respect his passion for real estate and great success.

#58 DON on 02.13.19 at 10:26 pm

Garth and Blog Dogs:

More and more I hear friends telling me that family members scaled up in houses 10 years prior to retirement, one has a 500K mortgage at 56, the first house was almost paid off but then they upgraded in all the emotion of keeping up with the Jones.

Another friend 80K away from begin mortgage free – bought an investment town house and cost more than their original house ( a lot more).

Another younger friend 30s is getting a divorce and is putting the unreno’d house up for sale just 2 years after buying.

Things seem to be just fine out there behind all the closed doors.

Downward momentum is picking up.

#59 crowdedelevatorfartz on 02.13.19 at 10:28 pm

@#55 N
“Australia seems to have taken the decision to shield those who are deep into mortgage debts. Interest Rate cuts likely…..
+++++

If they cut rates to “save” the falling Australian housing market….

Rock meets hard place.

As the youtube video said.

R.I.P. Ozzie Dollah

#60 Victoria Real Estate Update on 02.13.19 at 10:36 pm

# 50 Vampire studies

Demographia is low on credibility. Have you noticed Garth citing them?

What is your overall point and how is it related to the point of my post?

#61 Long-Time Lurker on 02.13.19 at 10:54 pm

Off-the-wall prediction:

Andrew Scheer (Conservative) defeats Justin Trudeau (Liberal) in the next Federal Election. He gets a minority government.

Let’s see what happens.

#62 Lost...but not leased on 02.13.19 at 10:58 pm

Re DEEP STATE and media

Operation Mockingbird
https://en.wikipedia.org/wiki/Operation_Mockingbird

Operation Mockingbird is a large-scale program of the United States Central Intelligence Agency (CIA) that began in the early 1950s and attempted to manipulate news media for propaganda purposes. It funded student and cultural organizations and magazines as front organizations.[1]

BTW Gloria Steinem was an admitted CIA agent.

Sorry folks…nothing goes UNtouched even Cooking Shows…Julia Childs was a CIA operative….

So is it a stretch that DIY shows on networks like HGTV are simply brainwashing exercises ? House Porn anyone with BANKSTERS AS PIMPS?

#63 Ponzius Pilatus on 02.13.19 at 11:14 pm

DELETED

#64 Ponzius Pilatus on 02.13.19 at 11:31 pm

#41 akashic record on 02.13.19 at 7:48 pm
#36 Shawn Allen on 02.13.19 at 6:51 pm

#11 Ponzius Pilatus on 02.13.19 at 3:42 pm
#76 Ubul on 02.13.19 at 12:00 pm

40% of Canadians don’t pay income tax (source OECD). Whoah! That’s a lot.

************************
Is it? what was it 10 years ago.

Should children pay income tax?

Also, the only thing worse than having to pay a lot of income tax is not having to, because of well you know… tiny income.

—–

OECD is sophisticated enough that they probably adjust their report to children and other obvious factors.

40% is way up, compared to 1916, when 0% were affected.
————
During the 50’s and 60’s income taxes were around 60%.
There was a strong middle class, and they helped build a strong infrastructure that we still enjoy today.
However, it’s in dire need for replacement.
with the middle class pretty much wiped out and the rich don’t give a fork and the poor just being poor.
Who among them will come to the rescue.

#65 Rory on 02.13.19 at 11:44 pm

Mortgaging a rental property will let you remove equity, for sure (just like borrowing against your home), and the amount taken will not be considered taxable income. It’s a classic move for many who have been long-term owners of apartment buildings, for example.

Why do long-term owners of apartment buildings do this then?

#66 Smoking Man on 02.14.19 at 12:11 am

Amazing site, lists sold, terminated and cancelled listings, as well as active listings. You can search with date ranges. Toronto market is in trouble.
See for yourself.

Election year think garth is right about 30y mortgages are back.

Enjoy the link. See unlike James I offer cool shit once in a while.

https://www.bungol.ca

#67 JPN on 02.14.19 at 1:07 am

I’ve done very well renovating, flipping and even having some rentals in the Okanagan Valley. It’s not all bad. Good business sense to those who want to put in the effort and some risk. It’s really a business venture.

#68 Smoking Man on 02.14.19 at 1:14 am

Hitting the big 6 0 this year.

Have a choice to make.

Do I quit drinking and smoking, start on a good diet, omega 3, yoga classes to prolong my life so I can walk into a nursing home at 80 bragging about all the risk I avoided just so I can be the poster child of the old roting bastard society of cowards that thought they could live for ever.

It’s not me. Laughlin this weekend. I’ll be dancing in the loser longe at riverside hanging out with drunken weirdos.

I love life but could care less if I dropped dead this second. I have lived bitches.

And the children worry about the pronouns.

Teachers are evil..

#69 Hamsterwheelie on 02.14.19 at 3:40 am

We hopped into real estate hard in the hammer by buying 4 houses – every house under $200,000 from 2011-2016.
We never attended a seminar but we did eat, live and breathe life and excellent tenants back into every house we purchased. We’ve done well but not excessively so – about as well as we could have done if we were high income earners (but we aren’t) It is actually hard work crawling through and clearing out an attic full of animal feces to blow in insulation, opening up 120 year old soot filled walls to repair brickwork or removing a cracked stack, restoring original plaster details and original windows, stripping out staircases etc etc. You have to have some vision, some smarts and a fair amount of passion to see past that much faulty wiring, cracked plaster, fermenting basements and crumbling chimneys.
There are real estate groups here that take investors around and show them properties to buy – only, its an investment group so they never really own it – they sit on the properties while they wait for enough appreciation to sell at a high enough price to give ‘investors’ vack their money with interest while the real estate firm/ property developer/ broker takes the majority all with other people’s money and a bigger cut – the house always wins, as they say.
However, what doesn’t win is the neighbours/neighbourhood that sees garbage piled up, vermin move in, overgrown yards, and boarded up windows for years on that property. This scenario as well as absentee landlords who rent to terrible tenants thus making everyone’s life on that street hellish, really burn my butt. By-law and property standards are pretty toothless so I’ve gone as far as tracking down property owners (who are often real estate agents) to message them directly through their business to get their act together.
These are a few of the many, hidden, facets of real estate not discussed on TV shows – maybe its time for a reality based realty show – not bloody likely!

#70 Canadian Crisis Watch on 02.14.19 at 4:28 am

DELETED

#71 jane24 on 02.14.19 at 5:29 am

Property Brothers runs on cable TV here in England and you solved a mystery for me Garth. I knew that they had Ontario accents but was pretty sure from the low house prices that they were renovating in the States. Their renos are deemed somewhat hilarious as the English have no experience with NA timber construction and can’t understand how a wall comes down in seconds. A brick wall here diving two rooms comes down inch by agonising inch. I’ll done it, the bricks make the sledge hammer vibrate.

Anyway both brothers are not hard on the eyes as they say here and well worth my $34 monthly cable TV fee! Nearly as good as morbidly obese bride shows!

#72 not so liquid in calgary on 02.14.19 at 6:40 am

A three minute, pithy, saccharine tune?

Pikers.

#73 Headhunter on 02.14.19 at 7:10 am

some real time info, on my TSN Mobile app ad shows up for “Shoeless Joe’s” restaurant.
Mon-thurs ALL DAY 50 cent wings $4 16oz drafts Molsons

2nd “canary in the coalmine” Rogers Mobile.. sick of paying their rates called them up said im going to Koodo voila $30 month reduction in my plan (went down from unlimited to two gig data)

Point being the sales rep said “thats all we are doing all day everyday reducing people plans”

Its here folks, most people are tapped out.. next will be “I don’t care anymore I want off the hampster wheel”

50% home price reduction at a minimum.

#74 lawboy on 02.14.19 at 7:18 am

I thought they lived in Vegas?

#75 maxx on 02.14.19 at 7:20 am

@ #31

“…..do people real know construction with real wood, and cement, and steel,”

Nope. People have largely lost the rock-solid, fundamental and long-term value of quality.

Pressed cornflakes, wrapped in plastic gas off, encourage mold growth and even with a pathetic roof vent or two create crappy air quality. Long-term health consequences are anyone’s guess.

#76 dharma bum on 02.14.19 at 7:26 am

#25 Penny Henny

Maybe I’m just too rough around the edges but I always thought that the property brothers looked like cavemen.
——————————————————————–

I’m not exactly sure what it is, but something about those dudes really creeps me out.

Maybe it’s those “alien” eyes, or something.

Either way, I gotta hand it to them. They took the “interesting looking twins” cliche, and parlayed it into a multi-million dollar entertainment and real estate scam.

The millennials really eat that sh*t up!

#77 Howard on 02.14.19 at 7:26 am

#61 Long-Time Lurker on 02.13.19 at 10:54 pm
Off-the-wall prediction:

Andrew Scheer (Conservative) defeats Justin Trudeau (Liberal) in the next Federal Election. He gets a minority government.

Let’s see what happens.

——————————————

Nope. Quebec will give T2 more than 65 seats allowing the Liberals to squeak through with a minority. Nothing will budge his support there. Quebec commentators don’t even see what the big deal is re: SNC-Lavalin. Expect large numbers of Liberal MPs to fall in Ontario and the West though.

#78 dharma bum on 02.14.19 at 7:43 am

#68 Smoking Man

Do I quit drinking and smoking, start on a good diet, omega 3, yoga classes to prolong my life…?
——————————————————————–

I would suggest not.

I too, turn 60 this year (arghhhhhh).

I tried quitting drinking, yoga, omega 3 supplements, and dieting.

Ever since I tried that crap, I’ve been sick, seriously injured my back, got depressed, had aches and pains all over, and had digestive problems.

I reverted to my old ways (lots of scotch, beer, Netflix binging, couch surfing, and eating tons of steak).

I feel great again. Happy as hell.

Welcome to old age, brother. Let it ride.

#79 Penny Henny on 02.14.19 at 7:55 am

Hey Big Rider, show your Nonno this

https://www.thestar.com/news/gta/2019/02/14/a-photo-taken-on-torontos-corso-italia-49-years-ago-became-a-family-legend-no-one-saw-it-until-now.html

“According to the 1971 census, there were 270,000 Italians in Metro Toronto, many arriving after the Second World War. Men found jobs in the construction industry, and many Italian women worked in factories. More than 90 per cent of Italian families owned their own homes or were planning to buy them, according to a survey by Corriere Canadese, the city’s Italian-language newspaper.”

90%! That’s low no?

#80 Remembrancer on 02.14.19 at 8:11 am

#62 Lost…but not leased on 02.13.19 at 10:58 pm
Re DEEP STATE and media
————————————————————
How about a real conspiracy, except it’s 2019 and shallow state Trump is coming to take your border land Texas and Arizona through eminent domain and a national crisis declaration for his vanity wall project… Let’s see how the States Rights crowd reacts when that happens…

#JadeHelmII

#81 crowdedelevatorfartz on 02.14.19 at 8:15 am

@#71 jane24
“I thought they had Ontario accents…”

++++

I have heard of East coast accents, French accents, even a Canadian vs American accent…..
Never, ever, have I heard someone say, “You must be from Ontario. You have an accent!”

#82 Steven Rowlandson on 02.14.19 at 8:21 am

The fallacy is that people have to live somewhere and do have to financially take it up the butt in order to make landlords,homeowners, real estate agents, home flippers and other investors rich. The three years pay rule and the one eigth to one quarter of a months pay for renting rule was devised to protect people from this genocidal financial activity that is going on. People need to get their minds right and follow the rules otherwise the real estate market will take every cent the taxman doesn’t.

#83 crowdedelevatorfartz on 02.14.19 at 8:29 am

@#70 Howard
“Quebec commentators don’t even see what the big deal is re: SNC-Lavalin.”

++++

I dont think its a big secret that Quebec residents arent terribly shocked when one of the “big players” in La Belle Province is accused of bribery and corruption.
Its been going on for years.

The Charbonneau Commission was the placebo to placate the masses.
Its back to business as usual…

As for T2 running a minority govt.
Possibly.
But even uber genius advisor Butz cant save Trudeau from his own ego and mouth.
Trudeau is a man-child playing “Leader” where as Ms Wilson Raybould is very smart and obviously fed up with the Ottawa Bullsh!t.
I cant wait to see what comes out of Trudeau’s flapping gums next.
All she has to do is to remain silent and let him babble on and on and on.
At least he’s good at that.
While the media circle like buzzards at a road kill.

#84 Remembrancer on 02.14.19 at 8:29 am

#24 Mike on 02.13.19 at 5:28 pm
.
With latest political scandal looks like Trudeau really has to do something serious “to help millennials” aka raid RRSP, downpayment help and kick B20 out.

Don’t bother little kink in Vancouver RE.
Buy now or miss the gains next year and next…
————————————————————–
Na, why cut off the wrinkly voters? Steal the ON Con platform and announce a buck-a-latte national challenge – see you don’t actually need a $1 latte, you just need to announce it. Oh and rebate the GST on the first 10 tattoo studio appointments…

That one was free Gerry Butts, Ralph Goodale and Mona Fortier. Msg me through Garth when you want more ideas… If so, send a case of dog biscuits to the bank building as a show of good faith and meet me on the Trestle Trail bridge at midnight…

#85 Penny Henny on 02.14.19 at 8:46 am

Niagara Real Estate Board January numbers

https://www.niagararealtor.ca/news-stats#PhotoSwipe1550151810743

Listings- Up
Sales- Up
Prices- Up
Days on market- Up ??

What up with dat?

#86 Remembrancer on 02.14.19 at 8:51 am

#82 Steven Rowlandson on 02.14.19 at 8:21 am
The fallacy is that people have to live somewhere and do have to financially take it up the butt in order to make landlords,homeowners, real estate agents, home flippers and other investors rich. The three years pay rule and the one eigth to one quarter of a months pay for renting rule was devised to protect people from this genocidal financial activity that is going on. People need to get their minds right and follow the rules otherwise the real estate market will take every cent the taxman doesn’t.
——————————————————–
Except those aren’t rules for the providers, those are rules of thumb for smart consumers looking for affordability. The only rule for providers is “what the traffic will bare…”

#87 Remembrancer on 02.14.19 at 9:12 am

#81 crowdedelevatorfartz on 02.14.19 at 8:15 am
@#71 jane24
“I thought they had Ontario accents…”

++++

I have heard of East coast accents, French accents, even a Canadian vs American accent…..
Never, ever, have I heard someone say, “You must be from Ontario. You have an accent!”
———————————————————–
Yep, there’s a least two – a rural Ontario accent roughly approximated on Letter Kenny and an annoying Toronto raising lilt at the end of every mother loving sentence e.g. “Like I threw the chair of the balcony for myyyy instagraaammm peeeeeeeps”

The second “T” in Toronto is supposed to be silent btw…

#88 Shawn Allen on 02.14.19 at 9:17 am

Charging SNC Lavalin is criminally stupid

The notion that corporations are legal persons is a fiction for accounting and limited liability persons.

But the notion that such fictional “persons” commit crimes is idiotic. It was the managers at SNC who commited crimes. A few were charged. They maybe should charge more. But to punish the SNC share holders and all the employees and the Quebec economy is beyond dumb. Following the rule of law is good. But taking that to dumb extremes is silly. There is however little common sense left in the world. It’s all by formula and rote now. No discretion. Trudeau should probably basically say “You’re god damn right I ordered the code red!” What would Trump do? He would defend SNC and probably go after the managers.

#89 Shawn Allen on 02.14.19 at 9:25 am

Corporations as “persons”

I should have said the notion of a corporation as a legal person for purposes of the criminal law is a fallacy (Word of the day). Or at least it should be a fallacy.

#90 IHCTD9 on 02.14.19 at 9:38 am

#7 Lee on 02.13.19 at 3:13 pm
#6 Richie,

What is not to believe? He has purchased properties in an up market. After sale costs, his portfolio is worth about $9,500,000.00, minus what I will guess are mortgages equaling about 50-60% of this. He says half of the value of the properties is owed to his partners/investors, so his share is about $2,000,000.00 to $2,500,000.00 in equity, from which he will pay $200,000 to $300,000 in taxes on their sale. You find it hard to believe someone is worth $2,000,000 or so at 32 years old buying real estate in an up market? I’d say it is fairly typical of real estate investors in Toronto/GTA over the last 10 years.
____

Sure he made some cash – who wouldn’t doing what he did, at the time he did it, and where he did it. I think an honest no BS tally of clear profits after ALL real costs and opportunity losses have been taken into account would put him much closer to 1.5 Mil than 2 Mil though. RE players are never, and I mean NEVER completely honest with themselves regarding the costs of buying and holding RE.

The big thing to take away from this article, is to never take this guy’s advice on RE. He seems to think he has some special RE flipping knowledge that others do not. He got lucky on all fronts, his sails were filled with the winds of good fortune. Bubblicious prices and dirt cheap rates at the same time.

If he tried doing the same thing today – he’d be running from a pile of creditors shortly – and they happen to include half his family and friends (!!!).

Let’s see how buddy is doing 20 years from now. He thinks he’s got some expert knowledge, and is minimizing the actual real life reason he made money on these places. My bet is he’ll try to keep doing the RE flipping thing.

It would not surprise me one bit if he ends up disowned by his family with a price on his head and be totally broke – before he’s 45.

The best thing this kid can do right now is invest that windfall, and get a job.

#91 Vampire Studies on 02.14.19 at 10:03 am

60 VREU – the demographia reports have often been cited and discussed here. They certainly highlight the unaffordable markets in their study area. Why do you feel they are not credible?

My point in this case was to show “wage creep”. Though many feel wages have been stagnant, it appears they have been rising slowly over the years.

#92 George on 02.14.19 at 10:28 am

JT – anyone still believe he was ready to be PM?

#93 Howard on 02.14.19 at 10:38 am

#87 Remembrancer on 02.14.19 at 9:12 am
#81 crowdedelevatorfartz on 02.14.19 at 8:15 am
@#71 jane24
“I thought they had Ontario accents…”

++++

I have heard of East coast accents, French accents, even a Canadian vs American accent…..
Never, ever, have I heard someone say, “You must be from Ontario. You have an accent!”
———————————————————–
Yep, there’s a least two – a rural Ontario accent roughly approximated on Letter Kenny and an annoying Toronto raising lilt at the end of every mother loving sentence e.g. “Like I threw the chair of the balcony for myyyy instagraaammm peeeeeeeps”

The second “T” in Toronto is supposed to be silent btw…

————————————-

Also, anyone who attended highschool in urban Ontario in the 80s/90s/00s, particularly Toronto, will recognize the distinctive “yo guy” dialect of young male Ontarians.

#94 Not So New guy on 02.14.19 at 10:43 am

#53 Lost…but not leased on 02.13.19 at 9:45 pm

PS : I think a conference call to T2, Jagmeet, Sheer and Garth’s Dog is in order.

————————————

Why would you waste Garth’s Dog’s time like that?

#95 For those about to flop... on 02.14.19 at 10:57 am

Recent sale report.

Morgan Crossing area townhome/ duplex sales.

Round 2.

Some of you might remember the other day a lady wrote me and asked for a bit of help with price discovery in this area.

I showed her, and you guys for that matter, two options in one complex, one just sold, one still available.

They were boxy and cramped looking but it was more about laying down some markers.

They were below the 650k marker.

I was working with limited details and also stumbled across these two as well, that I decided to revisit when I had time.

This one might be a bit too much townhouse for some people as it is approaching 2500 sq foot, but let’s have a look at what the buyer got.

The details…

1640 King George Bvld, Surrey.

Paid 800k

Originally asking 899k

Previous owner paid 760k 2017

Assessment 835k

So this one is actually a duplex.

That takes care of strata fees and you still just share one wall like an end townhome like I will show you in the second option.

Whoever sold it didn’t make money after expenses, that’s a Pink Draw, but that’s not what this is about.

If you spend the time to look at the photos of his place it’s pretty hard to find fault,like I said maybe too big for some people trying to downsize but for most families looking for a reasonable option this ticks a lot of boxes.

The ones presented the other day were new, this one is only 9 years old and still in excellent condition.

https://www.zolo.ca/surrey-real-estate/1640-king-george-boulevard

This one will require a bit of car use with not much nearby, but the next option that someone snapped up has a lot of shops and restaurants in walking distance, if that’s your thing.

Let’s have a look at what these guys got.

The details…

39-2500 152st, Surrey.

Paid 780k January 2019

Originally asking 819k

Previous owner paid 662k. October 2016

So these were both flips and these guys could have made some money but they mention renovations and certainly inside it doesn’t look it’s age.

27 years old this one,bit dated outside but looks solid and the interior is also hard to find fault with for something sub 800k.

Both units couldn’t have been presented much better.

This one is the next size down at 1750 sq ft and as mentioned you can be less car reliant as everything you need to live is nearby, perhaps too close for some.

Being a true townhome you have to fork out 350 bucks a month for strata which is why I also showed the duplex.

They paid 20k more, got a much bigger and newer product and no strata.

Options galore,but you only need one…

M44BC

https://www.zolo.ca/surrey-real-estate/2500-152-street/39

#96 For those about to flop... on 02.14.19 at 11:01 am

Race to a million.

Just nabbed these two that hit the market in East Van sub one million and we’ll see how low they go.

The details…

4550 Gothard Street, Vancouver.

Asking 999k

Originally asking 1.39

Assessment 1.28, down from 1.33

https://www.zolo.ca/vancouver-real-estate/4550-gothard-street

https://www.rew.ca/insights/166516/4550-gothard-street-vancouver-bc

Second case.

The details…

1891 e 56th ave,Vancouver.

Asking 999k

Assessment 1.57

So nearly 40% less than the assessment number.

Well it is about to hit Spring Fling 2019.

People seem to be expecting a fizzer.

Direction is down but sales could still spike.

With a lot of old time purchases still waiting to cash out, things could explode…

M44BC

https://www.zolo.ca/vancouver-real-estate/1891-east-56th-avenue

#97 IHCTD9 on 02.14.19 at 11:02 am

#75 maxx on 02.14.19 at 7:20 am
@ #31

“…..do people real know construction with real wood, and cement, and steel,”

Nope. People have largely lost the rock-solid, fundamental and long-term value of quality.

Pressed cornflakes, wrapped in plastic gas off, encourage mold growth and even with a pathetic roof vent or two create crappy air quality. Long-term health consequences are anyone’s guess.
____

It would cost an insane amount these days to build like they used to.

Take our old Farm house, the foundation walls are 36″ thick, solid granite and mortar. Both the interior and exterior faces have had the boulders hand split to provide a smooth flat wall. What is a modern poured wall – 10″?

The house itself is built of timbers and planks. All the big load bearing timbers were hewn 2/4 sides by hand. Interior walls are mortar and lath, several still original I think. I’d bet the trees were felled by the builders themselves with an axe. The mortar was surely mixed by hand – and this house probably has between two and three hundred tons worth in it.

The human sweat that went into this place would build 5-6 McMansions today.

150 years ago, you built your own home, used local materials, and built it to last for generations. Stuff today is built to make money.

#98 Barb on 02.14.19 at 11:17 am

“…cant wait to see what comes out of Trudeau’s flapping gums next.”

——————————————

He’ll continue considering the issue “very seriously”.

#99 Ubul on 02.14.19 at 11:30 am

#36 Shawn Allen on 02.13.19 at 6:51 pm

#11 Ponzius Pilatus on 02.13.19 at 3:42 pm
#76 Ubul on 02.13.19 at 12:00 pm

40% of Canadians don’t pay income tax (source OECD). Whoah! That’s a lot.

************************
Is it? what was it 10 years ago.

Should children pay income tax?

Also, the only thing worse than having to pay a lot of income tax is not having to, because of well you know… tiny income.

Google is your friend.

#100 Ubul on 02.14.19 at 11:57 am

#88 Shawn Allen on 02.14.19 at 9:17 am

Charging SNC Lavalin is criminally stupid

The notion that corporations are legal persons is a fiction for accounting and limited liability persons.

But the notion that such fictional “persons” commit crimes is idiotic. It was the managers at SNC who commited crimes. A few were charged. They maybe should charge more. But to punish the SNC share holders and all the employees and the Quebec economy is beyond dumb. Following the rule of law is good. But taking that to dumb extremes is silly. There is however little common sense left in the world. It’s all by formula and rote now. No discretion. Trudeau should probably basically say “You’re god damn right I ordered the code red!” What would Trump do? He would defend SNC and probably go after the managers.

It is a matter worth discussion.

When a person found guilty and sent to prison, the entire family suffers the consequences of the crime.

There is a reason why criminals are sent to prison, not just fined.

Companies simply pay the settlement – out of shareholders pocket, by the way. The cost is deductible expense.

It has very little effect on changing corporate behaviour, Google in Europe paid more fines than taxes last year.

Clearly, the punishment is not comparable to persons committing the same crime.

Just ask Manafort. If he was a corporation, he would simply pay the fine, refuse to accept any criminal conviction, as corporate settlements do, for the exact crime what sends him, as a person to prison.

If the Magnitsky act, aimed to punish corrupt businesses, signed also by Canada, was applied to SNC Lavalin, the company would go under due to the retaliation regime subscribed for violating the act. Their executives would be arrested and charged criminally.

By the way, can anyone explain, why is SNC Lavalin not subject to the Magnitsky act?

#101 Dissident on 02.14.19 at 12:04 pm

#6 Richie

This sentence says it all – “The market has changed radically since I got a foothold”. You think?

Everything is relative. Sure, you can buy 10 houses on cheap money, when house prices are increasing 30% a year. But when they stop, and start inching downward, then you are not singing the same tune.

I don’t think we’ll see this ‘perfect storm’ again for a while. This was a once in a lifetime occurrence, imo. Price appreciation and cheap money today is not like it was in 2010 thru 2017.

#102 KLNR on 02.14.19 at 12:08 pm

@#98 IHCTD9 on 02.14.19 at 11:02 am
#75 maxx on 02.14.19 at 7:20 am
@ #31

“…..do people real know construction with real wood, and cement, and steel,”

Nope. People have largely lost the rock-solid, fundamental and long-term value of quality.

Pressed cornflakes, wrapped in plastic gas off, encourage mold growth and even with a pathetic roof vent or two create crappy air quality. Long-term health consequences are anyone’s guess.
____

It would cost an insane amount these days to build like they used to.

Take our old Farm house, the foundation walls are 36″ thick, solid granite and mortar. Both the interior and exterior faces have had the boulders hand split to provide a smooth flat wall. What is a modern poured wall – 10″?

The house itself is built of timbers and planks. All the big load bearing timbers were hewn 2/4 sides by hand. Interior walls are mortar and lath, several still original I think. I’d bet the trees were felled by the builders themselves with an axe. The mortar was surely mixed by hand – and this house probably has between two and three hundred tons worth in it.

The human sweat that went into this place would build 5-6 McMansions today.

150 years ago, you built your own home, used local materials, and built it to last for generations. Stuff today is built to make money.
________________________

Hmm, I recently built my own house, used local (Canadian at the very least) materials and built it to last generations. Having said that I do hope it makes me some money as well.

#103 Semi Retired Conservative on 02.14.19 at 12:19 pm

“” This is the tenth year of advance after the GFC. It’s only reasonable there’s a pause coming.

(I will explain soon how financial portfolios should prepare.)””

How soon is soon ?……

#104 JB on 02.14.19 at 12:27 pm

#68 Smoking Man on 02.14.19 at 1:14 am

Hitting the big 6 0 this year.

Have a choice to make.

Do I quit drinking and smoking, start on a good diet, omega 3, yoga classes to prolong my life so I can walk into a nursing home at 80 bragging about all the risk I avoided just so I can be the poster child of the old roting bastard society of cowards that thought they could live for ever.

It’s not me. Laughlin this weekend. I’ll be dancing in the loser longe at riverside hanging out with drunken weirdos.

I love life but could care less if I dropped dead this second. I have lived bitches.

And the children worry about the pronouns.

Teachers are evil..
…………………………………………………………………
My cousin is a medical teacher at a health sciences centre and and she thinks your a perfect example that she would love to see on her cadaver table. She wants your address. Won’t your children and grandchildren miss you?
P.S. Your only going to be sixty? Jesus Christ you look old in your Periscope videos. I guess that’s what hard living will do to the body and mind!

#105 TurnerNation on 02.14.19 at 12:55 pm

#73 Headhunter the Shoeless joes near Downtown TO by Roy Thompson hall just closed up shop.

#106 IHCTD9 on 02.14.19 at 1:11 pm

#104 KLNR on 02.14.19 at 12:08 pm

Hmm, I recently built my own house, used local (Canadian at the very least) materials and built it to last generations. Having said that I do hope it makes me some money as well.
_____

Even though I don’t know anything about your new house – I’m pretty sure it won’t be around hundreds of years from now if it was built using a carbon steel reinforced poured concrete foundation. Figure 75-100 years and the foundation will be riddled with issues and not worth fixing. Not that you’ll give a rip at that point though.

There really is only one foundation that can last centuries – and that is natural stone. It can sit in the earth for hundreds maybe even thousands of years with zero damage. The only maintenance is dealing with the degradation of the cement mortar joints over time. Re-point as necessary – maybe 2-3 times per century, and you’re good.

Truthfully, there is a lot to like about a stone foundation wall – but there is a lot to dislike as well.

#107 Evanne on 02.14.19 at 1:56 pm

Perhaps Garth might have an opinion on this article.

The conclusion seems to be in the long run, though, homeowners often fare financially better than renters because homeownership enables forced savings that accumulate over the years, growing into a sizeable nest egg.

So if one finds his/her home making up the majority of assets, you shouldnt be too worried.

Treat it as a forced savings.

Of course, if you can rent and save, you probably will come up ahead as well.

https://business.financialpost.com/personal-finance/the-haider-moranis-bulletin-no-right-answer-to-rent-or-buy-debate-but-theres-no-question-who-ends-up-ahead

#108 Don's Place Laughlin on 02.14.19 at 2:07 pm

#68 The Smoker – Your coming down in the world from Vegas where the shots are cheaper for $3.00. Did all the young women in Vegas reject you? All the old ladies hang at Don’s place playing the penny slots, so you will now finally fit in with your crowd at the losers lounge.

#109 jess on 02.14.19 at 2:42 pm

re the oecd tax comments

….address concerns raised by the Organization of Economic Cooperation and Development (OECD) off the back of its BEPS program.

china-briefing-british-virgin-islands

The British Virgin Islands (BVI) recently passed legislation strengthening transfer pricing rules, amid international criticism for its status as a tax haven.

The new law – the Economic Substance (Companies and Limited Partnerships) Act 2018 (the Act) – requires certain entities registered in the BVI to demonstrate economic substance to maintain their status and benefits in the region.

The Act is the latest piece of legislation to strengthen the international Base Erosion and Profit Shifting (BEPS) campaign to tackle international tax evasion. China, Hong Kong, and a number of other areas have participated in this program, putting out their own measures to align with best practices.
=====================

Panama to call its EU envoy for consultations over ‘high risk’ list (13 Feb 2019)
It’s Time to Shut Down Tax Havens (13 Feb 2019)
Paddy Power Betfair to challenge 55 million euros in tax bills (13 Feb 2019)
EU Commission has adopted its new list of 23 third countries with strategic deficiencies in their anti-money laundering and counter-terrorist financing frameworks (13 Feb 2019)
EU Blacklists Saudi Arabia in Fight Against Money-Laundering (13 Feb 2019)
US attacks EU money laundering blacklist (13 Feb 2019)
Marco Rubio wants to end stock buybacks’ tax advantage (13 Feb 2019)
Fear, Not Facts: Netflix Misleads Media Reporting on Corporate Tax (13 Feb 2019)
Imagine Canada as a tax haven for Americans (13 Feb 2019)

#110 georgist on 02.14.19 at 2:50 pm

These people are a cancer on society. They are simply looking to take money (and therefore resources) out of the collective wealth without contributing anything.

Tax land. Tax the leeches.

#111 Where's The Money Greedeau? on 02.14.19 at 2:50 pm

Did anyone watch that farce that was the Justice Committee yesterday on CBC.
The arrogance displayed by corruptibles WE pay is overwhelming.
Whomever the chair of that committee is I would love to take out back for a you know what.
The smile on his face as he denied one after another MP’s amendments was despicable!
If I were there I would be in jail for jumping over the pew and going over to thrash his smug yap.
The only true words spoken were COVER UP!
I hate politicians, never met one that wasn’t on the take after a year or so in gov’t.

#112 jess on 02.14.19 at 2:56 pm

usa not happy

Saudi Arabia regrets inclusion on EU money laundering blacklist

EU adds Saudi Arabia to ‘dirty money’ blacklist in crackdown on terrorism financing

Banks will have to carry out more stringent checks on financial transactions

=======
vaccines
But while he had often argued about the topic with his mother growing up, Jill was convinced it was merely a “rebellious teen” phase that he would grow out of.

“My mum had always known I disagreed with her and figured that was going to pass, but it didn’t. When I started looking into it myself, it became very apparent that there was a lot more evidence in defence of vaccinations, in their favour,” he told NPR, adding that he is booked in to have more shots this month.(msn)

#113 AGuyInVancouver on 02.14.19 at 3:06 pm

I would love to see an HGTV show based on Flop’s real estate reports. Each episode follows around a greedy sod who loses his short trying to flip a property.

#114 Lost...but not leased on 02.14.19 at 3:06 pm

#57 Keith on 02.13.19 at 10:20 pm
I have a friend who made a fortune in Vancouver real estate over the last thirty years. He would buy a property in the dead of winter, in cosmetically rough shape and an unfinished basement. He would build a basement suite, renovate the rest of the home quickly and cheaply and rent it out.
=================================

It wasn’t that hard to invest in RE till about the 1970’s.
If one could scrape up a downpayment the rent covered the mortgage..then simply let inflation do the rest.

Braver parties simply leveraged their existing holdings and built up their portfolios.

Reno’s?….I can’t say I know people who did this, but good luck. ..it may be a business model that works best outside major cities.

To the contrary, I’ve seen many parties that have spent tens of thousands on renos only to have the buyer demolish it.

#115 jess on 02.14.19 at 3:15 pm

deferred prosecution vs criminal trial

have a look at the seimans case.

alignments

=======================
About this public consultation

From September 25 to November 17, 2017, the Government of Canada invited Canadians to participate in a discussion and to provide their views on whether it has the right tools in place to address corporate wrongdoing. Submissions were accepted until December 8, 2017 (11:59 pm Pacific time). As part of this engagement, the government consulted with Canadians on potential enhancements to the Integrity Regime and on considerations regarding the possible adoption of a deferred prosecution agreement (DPA) regime in Canada. The following discussion paper was designed to guide the public consultations regarding a possible DPA regime in Canada.


The United States (US) and United Kingdom (UK) have DPA regimes in place. In November 2016, France adopted a DPA-like mechanism to resolve anti-corruption investigations. The Australian Ministry of Justice released a public discussion paper on DPAs in 2016 and, in May 2017, completed consultations on a draft law.

DPAs have been used extensively in the US since the early 1990s as an enforcement tool for corporate crime, particularly for Foreign Corrupt Practices Act offences, although they can also be used with individuals. There have been many significant DPA enforcement actions. Except in limited circumstances, prosecutors have the discretion to offer a DPA in respect of any federal crime for which there is a prosecutable case. A DPA is not available for cases where: the accused has two or more prior felony convictions; the offence relates to national security or foreign affairs; the accused is (or was) a public official and is charged with an offence involving a violation of the public trust; or Department of Justice policy dictates that the offence should be diverted for state prosecution.

In the US, DPAs are governed by policy. They do not have to be published and the role of the courts is fairly limited. DPAs are registered with the court in case a prosecution is resumed, but the courts do not play a role in approving, or in overseeing the carrying out of, the terms of the agreement….

https://www.tpsgc-pwgsc.gc.ca/ci-if/ar-cw/aps-dpa-eng.html#a3
=================

Deferred Prosecution Agreements in Canada: Now in force
https://www.osler.com/…/deferred-prosecution-agreements-dpas-come-into-force-in-c…

Sep 19, 2018 – On September 19, 2018, amendments to Criminal Code came into force establishing for the first time a Deferred Prosecution Agreement (DPA

https://nationalpost.com/news/politics/snc-failure-to-secure-deferred-prosecution-comes-after-years-of-legal-fights-lobbying-blitz

#116 jess on 02.14.19 at 3:29 pm

what pressure those talks have been going on for some time most favoured was the uk system

Consideration 3: Role of the courts

The role of the courts must be considered with respect to any DPA regime.

Having a strong role for the courts can be viewed as contributing to transparency and enhancing public confidence in the process. However, with greater judicial involvement comes less certainty as to whether in fact companies could be approved to enter into a DPA, which could deter companies from self-reporting.

As mentioned, the courts play a limited role in the US DPA system, where there is no statutory basis for their involvement. DPAs do not require judicial approval, but they are registered with the court for enforcement in the event of a breach.

In contrast, before a DPA is approved in the UK, the prosecutor must apply to the court for a preliminary hearing to obtain a declaration that entering into the DPA is likely in the public interest and that the proposed terms are fair, reasonable and proportionate. Once negotiations are complete, the prosecutor must apply for a final hearing to obtain a declaration that the DPA meets these conditions. Where the court grants approval of a DPA, it must give its reasons in open court. The prosecutor must return to court in the event that it is necessary to vary or discontinue a DPA and, if it remains in force, must give notice to the court that criminal proceedings will be discontinued upon its expiration.

1. Usefulness of deferred prosecution agreements as part of the Canadian criminal justice system

Participants were asked for their views with respect to the potential advantages and disadvantages of using DPAs to address corporate criminal liability in Canada. This issue received the most attention from participants, with the majority taking the view that the advantages of having a DPA regime would outweigh the possible disadvantages.
Advantages

The majority of participants thought that a DPA regime would encourage self-reporting, promote accountability, foster a compliance culture and enhance public confidence in addressing corporate wrongdoing. A DPA regime is also viewed as a means to improve enforcement outcomes and could increase justice system efficiencies by avoiding protracted criminal trials. The extent to which DPAs would encourage self-reporting is dependent on the predictability of the outcome, which in turn is linked to how the DPA regime is structured. While there is little judicial involvement in the US DPA process, under the UK regime, the courts must find that the terms are fair and reasonable. This adds a degree of uncertainty, as the court could require that changes be made or may not approve the DPA at all.

Several participants noted that DPAs provide greater flexibility for prosecutors to structure tailored resolutions in appropriate cases, while reducing the negative consequences of a company’s conviction for innocent third parties, such as employees.

Feedback was received from a variety of participants across Canada, including industry associations, businesses, justice sector stakeholders (including law enforcement) and non-governmental organizations (NGOs), and academics. Government officials held over 40 meetings with approximately 370 participants to listen to views on the consultation topics. The Government of Canada received 30 online submissions related to potential enhancements to the Integrity Regime, and 45 submissions on the possible adoption of a deferred prosecution agreement (DPA) regime in Canada.”

https://www.tpsgc-pwgsc.gc.ca/ci-if/ar-cw/rapport-report-eng.html#s4

#117 KLNR on 02.14.19 at 3:44 pm

@#108 IHCTD9 on 02.14.19 at 1:11 pm
#104 KLNR on 02.14.19 at 12:08 pm

Hmm, I recently built my own house, used local (Canadian at the very least) materials and built it to last generations. Having said that I do hope it makes me some money as well.
_____

Even though I don’t know anything about your new house – I’m pretty sure it won’t be around hundreds of years from now if it was built using a carbon steel reinforced poured concrete foundation. Figure 75-100 years and the foundation will be riddled with issues and not worth fixing. Not that you’ll give a rip at that point though.

There really is only one foundation that can last centuries – and that is natural stone. It can sit in the earth for hundreds maybe even thousands of years with zero damage. The only maintenance is dealing with the degradation of the cement mortar joints over time. Re-point as necessary – maybe 2-3 times per century, and you’re good.

Truthfully, there is a lot to like about a stone foundation wall – but there is a lot to dislike as well.
___________________________________

It’s probably good for a couple hundred years.
It’s only 2800sqft and on a large lot(for the city).
So more than likely somebody replaces it with a larger house in the next 20-50yrs.

#118 jess on 02.14.19 at 3:44 pm

How to Avoid a “Paper” Anti-Corruption Compliance Program

By: Jack Harrington, Esq.

Published In: The Suffolk Lawyer

Posted: September 16th, 2016

https://cmmllp.com/avoid-paper-anti-corruption-compliance-program/

http://theconversation.com/lessons-from-the-massive-siemens-corruption-scandal-one-decade-later-108694
==============================

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/9241-russia-anti-corruption-activist-beaten-to-death

Tags: FCPA, international

#119 I Saw It All on 02.14.19 at 4:17 pm

#114 Where’s The Money – The chairman was a bit of a card, but this was his nature. On the other hand, he handled the meeting with total control which was rare to see. The biggest surprise of all was the best political speech and argument by Pierre Poilievre that I’ve ever seen in my life.