Suckerville

Best estimates are that half of all new condo sales are to investors. Well, they may call themselves that, but in reality they’re cannon fodder for the real estate development business. Without them, prices would be lower, urban skylines not be pierced by cranes and reasonable companies would be building nice rental accommodation instead of acres of concrete boxes fetching a grand a foot.

(Actually a new launch in Toronto’s Liberty Village this week boasted of prices ‘only in the $1,200 range – $200 to $300 less than standard.’ So a 445-foot apartment – barely large enough to swing the average cat – is on for $544,000. Plus $6,500 for a locker and $75,000 for a parking spot. Yikes!)

Why do investors snap up precon units, buying real estate that doesn’t exist yet which has no dirt?

First, it seems cheap. Five grand down. Another 5% in a month, with the remainder of the deposit spread over a year. Second, condos always go up, right? Your friend Vinny’s cousin’s girlfriend made out like a bandit on that unit, somewhere, that she sold on assignment before construction even finished. So this is a sure thing. And then there’s the visceral pleasure of potentially being a landlord, and ‘letting someone else pay your mortgage.’

It’s a pitch that has lured tens of thousands of people in the past couple of years, and kept those cranes going up. Yes, some folks have made money. But many have not. And many, many more may learn the same lesson – these days landlords subsidize renters, not the other way ‘round.

A suspicious blog dog recently sent me the pitch for a new condo building in Barrie, where the elk and caribou go to diddle and mayhem reigns on Hwy. 400. Aimed 100% at amateur investors, it promises to double your money in three years. Could this be true?

It turns out a one-bedroom unit of 563 square feet sells for $410,000 – which is cheaper than Liberty Village, but you need lithium battery-powered thermal undies to live there. A 20% deposit of eighty-two grand leaves a mortgage of $328,000 and combined with condo fees and taxes, the monthly nut is almost $1,900.

The developer says this will command rent of $1,830 – which is brazenly optimistic, since the market rate in Barrie is $1,400 for a one-bedder (a whole house can be rented for less than two grand). So the odds are an investor would be in negative cash flow from the get-go.

So how do you double your money in 36 months?

Here’s the formula given to the suckers contemplating a purchase:

Click to enlarge. Wear protection.

Turns out the modest (and inflated) positive monthly cash flow is added to the reduction in mortgage principal over the course of three years, then goosed wildly by an anticipated $64,600 increase in the value of the condo unit. That totals a $94,670 ‘return on investment’ of the $96,231 an investor spent. So the logic is you receive 98% of your money back, which is an “Average Annual ROI of 32.79%”

Really?

In actual fact, a buyer would have received (maybe, if lucky) $245 per month while actually spending $96,231. That’s cash flow of $8,820, for a real-world ROI of 3% – about the same as a GIC, and taxed at the identical rate. The only way an investor could realize more is in the event of (a) a sale and (b) at the fantasy future price. Of course, that would come after paying a commission of $28,500 (plus HST) which would seriously reduce any potential return.

“Double Your Money in 3 Years!” is a lie. Shame on the marketing company which produced this material. Shame on the regulator for allowing it. Shame on Hersh Condos for preying on the gullibility and greed of others.

But if you really want one, these beauties are available for four hours only, next Wednesday afternoon. In Toronto, of course. Barrie isn’t safe this month. Bears.

 

91 comments ↓

#1 Borden Renter on 02.21.20 at 2:39 pm

Garth isn’t joking, people.

I live on base in Borden, about 25 mins west of Barrie, and I routinely have to dodge Elk and Bears on the commute to work. That’s not all, it’s also Coyote season, and there are roving packs in the forest trails at night. Be safe out there! Don’t venture anywhere north of Hwy 9 without a shot gun for protection.

Only $400,000 g’s for a box in Barrie? Yeah… no…

#2 catzndogz on 02.21.20 at 2:41 pm

Lived in Toronto in the 80’s and 90’s – it was a s***hole even then, just a cheaper one. Now it’s just a place people worship piles of bricks. At least YVR has some scenic beauty. Do the math and move, far away. You ‘ll be surprised how little you will miss it. And … Barrie is not far enough.

#3 dissymmetry on 02.21.20 at 2:41 pm

Not to mention that formula assumes the building has no defects either, which anyone in Vancouver two decades ago found out the hard way. Leaky condos anyone? [first]

#4 Sold Out on 02.21.20 at 2:59 pm

#132 Loonie Doctor on 02.21.20 at 1:44 pm

https://www.looniedoctor.ca/2019/06/28/career-balance/

Thank you also for the dialogue. Has been good to share perspectives with each other.
-LD

xxxxxxxxxxxxxxxxxxxxxxxxxxxxx

I meant to add how impressive it is that you can maintain a medical practice AND knowledgeable financial blog. That’s balanced and diversified!

#5 Marco on 02.21.20 at 3:01 pm

first

#6 Ron on 02.21.20 at 3:12 pm

I sold a 400 sq ft condo in midtown Manhattan last year for $470k USD (~$600k CAD) so it looks like Toronto condo prices are almost comparable. Prices in the suburbs caught up years ago.

#7 Paddy on 02.21.20 at 3:16 pm

Great dog pic today, that’s one handsome Lab.
Shame on the regulators/condo developers indeed….but shame on the gullible idiots who go for this nonsense.

#8 Doug t on 02.21.20 at 3:34 pm

There’s a sucker born every minute

#9 FreeBird on 02.21.20 at 3:34 pm

You probably just taken off a few Christmas card and party invite lists. Just a guess.

#10 Ray on 02.21.20 at 3:34 pm

Try making these claims with equities !. This is what fiduciary responsibility means, or the lack of any responsibility from the realtors. And why should that be, considering the monies involved ? Both are an investment, so why is one treated so rigorously, and the other so cavalier? Answer: Blatant Corruption by the Relator Lobby to influence the laws to their benefit.

#11 COVFEFE-19 on 02.21.20 at 3:35 pm

PBoC gonna print, Fed’s gonna print, BoJ, SNB, everybody gonna print. Canada, too. Being short dollars and levered long real assets would seem to be a good strategy in such an environment.

#12 Armpit on 02.21.20 at 3:39 pm

Hey Blogdogs….

Lets keep comments interesting instead of bantering each other. I think most of us just skip your comments. If you don’t like what one person said…skip it and don’t reply. That gives them the message.

#13 Oscar on 02.21.20 at 3:49 pm

Can you say “special assessment”? They seem to occur in most condo building just after the first year anniversary.

#14 TurnerNation on 02.21.20 at 3:53 pm

Last week in Toronto a new townhouse project near Distillery District sold out in one week
1500 square feet was over 1.3 million.

A 1bed condo downtown walking distance to subway.
Few years ago was bought with help from Bank of M&D for will over 400k. Today it would sell for closer to 700k.
Nothing to see here folks move along with 2.6% mortgage rates.
Toronto property tax hike next year? 4.2%

Ps shootings were up by 20% last year.

55 Mercer St condo price list is on Red Flag deals site. $1500 a square foot. Parking spaces north of 100k. Almost sold out. Nothing to see here citizen move along and return to your home or place of businesses.

#15 Doug t on 02.21.20 at 4:00 pm

#12 armpit

Are you kidding me? “Comment” sections were created to trash others – get with the program Stinkpit

#16 FreeBird on 02.21.20 at 4:03 pm

I was talking to a younger friend in their late 30s. Single mom, works two very busy home care jobs incl shift work and enjoys it. Money came up (as it does) and asked if she had GICs or TFSA. Crickets. Blank look. Not possible I said. Nothing. Scared of investing (too complicated and risky) and pushed into RE by well intended family. I’ve sent them and others to this site plus good book ideas but the level of financial literacy I come across (even basics) is shockingly low. Not surprising ads like the one in this post work. Developers know this Im sure. Those like this single mom could/would be a target. Shame indeed. Profit over all else.

#17 JSS on 02.21.20 at 4:04 pm

If you want cheap single family (and duplex) housing, come to Edmonton. Cheaper than Barrie.
Every time premier Kenny opens his mouth, the real estate prices drop further.

#18 Abby on 02.21.20 at 4:06 pm

Was reading this interesting exchange regarding insurance for condos.

https://mobile.twitter.com/rcrawford980/status/1230368318931865600

#19 SimplyPut7 on 02.21.20 at 4:09 pm

#1 Borden Renter on 02.21.20 at 2:39 pm

I didn’t think we had elk so close to the GTA, thought you needed to go further north or east for that.

#20 JB on 02.21.20 at 4:09 pm

#13 Oscar on 02.21.20 at 3:49 pm

Can you say “special assessment”? They seem to occur in most condo building just after the first year anniversary.
………………………………………
Don’t forget the insurance and $10K to $100K deductibles.

#21 Dougie on 02.21.20 at 4:12 pm

Anyone who falls for the suggestion that a loan repayment is positive cash flow clearly failed basic family finance 101 at high school. That is assuming that such a course actually exists. It certainly should.

#22 JB on 02.21.20 at 4:13 pm

#133 DON on 02.21.20 at 1:50 pm

#125 JB on 02.21.20 at 12:22 pm

Re pending condo insurance rate hike. A friend unloaded his condo on Bloor & Riverview and the new owner is pissed at the jacked up insurance rate he did not expect. The new owners realtor contacted his realtor to ask what rate he paid and our friend obliged by offering his company name and rate. I am seriously thinking of investing a little in insurance companies as this Condo Insurance Scam is going to be a money maker for those companies who stay in the business of insuring condos. Too bad the condo owners will get wiped out.
*************

That’s a nasty surprise. And one of the reasons quoted was AIRBNB rentals, others were lack of regular maintenance by strata boards and shoddy building construction (leaky, windows etc). This insurance problem is slowly gaining national attention and the politicos are slowing pointing fingers. This could be a black swan event that cascades. Condo prices are also out of reach in those demand areas and are still a stretch in terms of affordability for most people.

How can you get comfortably numb in a place you can’t comfortably pay for?

Smoky has posted briefly in the last couple of weeks. I take it, he is outside enjoying the warmer weather. I suspect he is waiting for the grand finale blog post in terms of the housing market and will be back when Garth’s last post says “I TOLD YOU SO”
…………………………………………………….
I’m still thinking he has finally smartened up and gone to rehab! What a great literary loss we will have on this blog…………

#23 DM in C on 02.21.20 at 4:24 pm

The marketing company can’t even proof-read (maintenance is spelled wrong under Cash Flow), how can they be trusted to do basic math?

#24 Niagara Region on 02.21.20 at 4:25 pm

Renovictions have hit the Niagara Region, and a local MPP is calling on the Ford government to stop them.

https://www.iheartradio.ca/610cktb/news/local-mpp-wants-end-to-renovictions-1.10592640

#25 Loonie Doctor on 02.21.20 at 4:28 pm

#4 Sold Out on 02.21.20 at 2:59 pm
I meant to add how impressive it is that you can maintain a medical practice AND knowledgeable financial blog. That’s balanced and diversified!

————————————————————–

Thanks. I am pretty lucky. I built a solid financial foundation thanks to my parents (who FIRE’d at 54 before it had a cool name and taught me how to work hard, save, and be happy with what I have) and Garth’s blog that taught me about DIY investing. Has given me the freedom to shift my practice around at this point. I plan to spend more time on the financial education piece as I scale back my paying clinical job. It is a definite vacuum to be filled in Canada and I think the timing is right for positive change as more docs are starting to pay attention to their finances and life balance/burn-out with all of the attention it has gotten in the last few years.
-LD

#26 PetertheSeparatistfromCalgary on 02.21.20 at 4:33 pm

100 years from now historians in the rich Republic of Alberta will puzzle over why people paid so much for property in Toronto.

This in a country which had twice the area of the Roman Empire. A country that was governed by a grossly incompetent Prime Minister who obstructed needed energy infrastructure and investment. A Prime Minister who’s virtue signalling triggered Canada’s demise.

#27 David Pylyp on 02.21.20 at 4:35 pm

I have heard, just this week that King and Mercer is selling out at $ 1,400 per square foot. for a one plus den of 600 sq feet (Toronto Condo )

David Pylyp

#28 Borden Renter on 02.21.20 at 4:53 pm

#19 SimplyPut7 on 02.21.20 at 4:09 pm

There were Timberwolves here and Polar Bears in North Bay back in the early 00’s, but they migrated north due to climate change. You’ll be amazed what you find north of Vaughan…

#29 G on 02.21.20 at 5:01 pm

Just listened to the PM T and then the first nation people.
Sounds like if the PM calls the RCMP in BC and tells them to remove all they stuff/trailers and people off the natives land the train tracks will open up. and the pipe line construction needs to wait until after they site down and talk it out.

So if our PM Leader, that wants the blockades to end now, made a call to the RCMP actually Lead. It sounds like the train could start moving again tonight.

I guess we will see. I wasn’t impressed by the PM news conference. But maybe he’ll surprise me.

If the OPP is listening, maybe you could give the RCMP guys a call and see if you can get them to move all there stuff/trailer and people out sooner than later.
It’s worth a try! Better than risking you people safety.

If that doesn’t open the blockades within hours after doing that, I guess you’re going to have to look at other option. Maybe start by turning off the heat in the PM office and home. So he’s the first to feel the lack of gas for heat homes, like some Canadians will soon feel if this blockage isn’t stopped soon.
Maybe also cut the PM paychecks off until it’s solved.

If he/PM T doesn’t call the RCMP in BC and get them to move all stuff off the land. To see if that works. It sounded like it would from what I just heard from the Native press conference that happened after the PM’s press conference today.
A no confidence vote would be in order tomorrow if he doesn’t!

#30 cowtown cowboy on 02.21.20 at 5:02 pm

As the last election showed, ON is home to the dumbest people in the country, reap what you sow fools

#31 Ronaldo on 02.21.20 at 5:14 pm

Good article regarding current situation with the blockades.

https://www.fraserinstitute.org/article/dont-be-fooled-by-shutdowncanada-or-misleading-claims-from-dishonest-activists?fbclid=IwAR3LxJcm7f1xQCt_0-AB-DIMVGfR2c3TR-LFNaNpK1LUvHP6FJbMNZnNuuw

#32 world traveller on 02.21.20 at 5:17 pm

Mr uh uh uh was on the CBC, no real commitment to anything, our fuddle duddle PM.
meanwhile, the Mohawks won’t comment on the climate change part of their protest, they don’t seem to know what they are protesting about, except moving the RCMP off their land, such disorganization on their part. they

#33 not 1st on 02.21.20 at 5:30 pm

#2 catzndogz on 02.21.20 at 2:41 pm

——

You do know that Vancouver went almost 70 days without a stich of sunshine this winter. I would rather freeze in Calgary with the sun on my face.

#34 Everything is better in USA! USA! on 02.21.20 at 5:36 pm

Let’s envision this for a minute: IF our GREAT president Trump decides to just give away 1 million citizenship/passports to Canadians with the condition they have to live and work in Florida (Whaaaaaat?!?!?). Also, the U.S passports will be distributed on a first come first bases (yeah in your dreams).

Result: Massive stampede history has ever known. The average condo prices will jump to 5 million and houses to 10 million – USD!! These people will eat cardboards and go shirtless just to get a piece of the pie. Now open your eyes. Sorry folks… :)

P.S : by the way i regularly visit the canuck town for company related work. In fact I am writing this post while in Canada. That’s the reason why I know so much about it.

#35 BlogDog123 on 02.21.20 at 5:46 pm

That Barrie condo ad sounds like a total scam.

Imagine the situation where the price declines slightly or remains flat. You have trouble renting it out (a few months go un-rented).
Your tenants complain about shoddy construction and noise from the next door AirBnB party Friday through Sunday transients…

No thanks, ETFs may be boring but they don’t come with all those expenses and hassle.

#36 Sold Out on 02.21.20 at 5:50 pm

#33 not 1st on 02.21.20 at 5:30 pm
#2 catzndogz on 02.21.20 at 2:41 pm

——

You do know that Vancouver went almost 70 days without a stich of sunshine this winter. I would rather freeze in Calgary with the sun on my face.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Don’t remind us! Seasonal amnesia is a necessity for getting through West Coast winters, along with Netflix, Gortex and wellies. We are, however, currently basking under sunny skies and surrounded by emerging camellias, daffs and cherry blossoms.

#37 MF on 02.21.20 at 5:54 pm

4 Everything is better in USA! USA! on

Lol you sneaky little …..

Troll of the century.

Seriously next level trolling on this one. Good job. I’m actually impressed.

MF

#38 Sail away on 02.21.20 at 6:11 pm

#34 Everything is better in USA! USA! on 02.21.20 at 5:36 pm

…by the way i regularly visit the canuck town for company related work. In fact I am writing this post while in Canada. That’s the reason why I know so much about it.

—————————-

Yes, if I had to choose one word to describe you, it would definitely be ‘knowledgeable’.

If two words, they would be, ‘amazingly astute’

If three: ‘smartest of all’

#39 Keith in Rio on 02.21.20 at 6:12 pm

Too bad you don’t generate jobs Garth, or your industry could lie too.

Ask my employees. – Garth

#40 Bytor the Snow Dog on 02.21.20 at 6:15 pm

#12 Armpit on 02.21.20 at 3:39 pm sez:
Hey Blogdogs….

Lets keep comments interesting instead of bantering each other. I think most of us just skip your comments. If you don’t like what one person said…skip it and don’t reply. That gives them the message.
——————————————————

#41 Valerie Voltaire on 02.21.20 at 6:18 pm

#12 Armpit on 02.21.20 at 3:39 pm

Hey Blogdogs….

Lets keep comments interesting instead of bantering each other. I think most of us just skip your comments. If you don’t like what one person said…skip it and don’t reply.”

Clam up yer pie hole and stop trying to curtail freedom of speech!

#42 Renter's Revenge! on 02.21.20 at 6:21 pm

The main thing is the effect of leverage and appreciation.

If you’re using 5:1 leverage on an investment (20% down), then a 5% price appreciation turns into a 25% ROI, regardless of what you’re investing in.

No wonder people are obsessed with real estate. Where else can you get that kind of leverage?

…and risk? – Garth

#43 Sail away on 02.21.20 at 6:42 pm

#12 Armpit on 02.21.20 at 3:39 pm

Hey Blogdogs….
Lets keep comments interesting instead of bantering each other. I think most of us just skip your comments. If you don’t like what one person said…skip it and don’t reply. That gives them the message.

————————–

Great idea. We could call it ‘the autistic message board’, where only statements are permitted- NO BANTER!

#44 Steven Rowlandson on 02.21.20 at 6:51 pm

Suckers indeed and the suckers don’t learn easily either.
Up here in Barrie there are plenty of proposed projects like hi- rise condos and affordable housing. Not much progress as there are existing hi-rises that are largely vacant… Builders need sales before serious work is done and sales requires people affluent enough to pay the ridiculous prices or rents asked. LOL with that when you have a low pay ,low hours economy. Except for the project at the 5 points it is likely that the other projects will be delayed or canceled. The developers ,politicians and realtors might be enthusiastic about some of these projects but it takes more than greater fools and speculators to fill up the proposed buildings with owners and tenants. It takes people with serious high five figure or six figure incomes and those are rarer than people think. Expect a serious reality check and a traumatic correction before sanity is restored to the real estate market. It has to be bad enough that banks abandon mortgage lending for their own good.

#45 Barrie from Barrie on 02.21.20 at 7:02 pm

I am embarrassed that such manipulative and fake economic bs is being used to flog condos in my hometown. It is sad that so many here now commute hours each way to Toronto every day, and seem to have been infected by the real estate delusions of that place. This has got to be a sign that the end is coming for this stupid bubble, which has made it unaffordable even here for most ordinary people.

#46 Shawn Allen on 02.21.20 at 7:08 pm

Why Banks Love CMHC mortgages?

A good part of the reason is that they are allowed almost unlimited leverage. They are regulated to have minimum risk-weighted equity ratios. But I believe the risk-weight applied on CMHC mortgages is zero.

That would mean unlimited leverage but there is another test where they can’t have less than about 3% equity on a non-weighted basis. Check Royal Bank, its around 4% last I checked.

If you make 1% before non-interest expenses and 0.5% after expenses and that can still turn into a 50% ROE at 100 times leverage. A 2% interest spread gives 50% REO before non-interest expenses even at 25 times leverage.

Check Royal Bank which makes consistently 30% ROE on its personal and commercial banking. SWEET!

CMHC has been around for decades. But 30 years ago banks were no quite so anxious to lend on mortgages at tiny spreads.

I’d be interested to know if the idea of zero risk and no bank equity required was around say 30 years ago. Or when it came to be done that way.

#47 AGuyInVancouver on 02.21.20 at 7:09 pm

#33 not 1st on 02.21.20 at 5:30 pm
You do know that Vancouver went almost 70 days without a stich of sunshine this winter. I would rather freeze in Calgary with the sun on my face.

_ _ _
Cool story bro’. At least your corpse will have a frozen smile on its face when they chip you out of the snowbank.

#48 Shawn Allen on 02.21.20 at 7:11 pm

Smoking Man?

Given his past description of his health and habits I thought maybe he had died.

But his last post quite recently, I recall, said he was “Getting Stronger”.

So perhaps he had a major medical set back. If so best wishes for his recovery.

#49 Shirl Clarts on 02.21.20 at 7:16 pm

#12 Armpit on 02.21.20 at 3:39 pm
Hey Blogdogs….

Lets keep comments interesting instead of bantering each other. I think most of us just skip your comments. If you don’t like what one person said…skip it and don’t reply. That gives them the message.
^^^^^^^^^^^^^^^^^^^
Exactly. I’m no longer getting baited by the useless whiners and complainers that offer no intriguing contribution. They’re a waste of time and not worth your attention.

#50 Captain Uppa on 02.21.20 at 7:25 pm

First rule: never buy a condo, only something with dirt (preferably with space).

Second rule: Don’t be a landlord unless it’s your full time gig.

Third rule: never buy a condo.

#51 Treasure Island CEO - 183,324,434.88 Offshore on 02.21.20 at 7:34 pm

15% over 3 years is too lofty. They should be targeting 2% conservatively for a combined 6% over 3 years ($24,594) Any hiccup in the economy will turn this negative by about -15% over 3 years with a 7-10 year holding period to dig yourself out back to break even (bear case).

Real estate needs to be used to reduce your living expenses and if there is a case in being able to do so with a high return than investing, it needs to be acquired. Again, the best way to do this is buy an SFD with a mortgage helper.

And let’s be realistic, financial returns are lethargic at 4-5%. Nobody is buying right at the very bottom and pricing their assets right at the very top as a way to measure returns. It is 4-5%, which is not much higher than the GICs and on par with housing. My money is still on sfd with mortgage helper because it is less regulated and has way more opportunity to reduce the biggest cost of living in the current cash flow killers of Canadians, which is living expenses (rent or own). You knock down that living expense and eventually have a place paid off.

#52 TurnerNation on 02.21.20 at 7:45 pm

Q. Why is the government, bankers and government-bankers working to juice this market? Most recently, cutting stress test into this critical market inflection point?

A. To push the agenda of We need more Affordable Housing – See how cray-cray is this market!
That is, paid for by tax payers. It began under the pretext of refugees given paid-for housing.
(No person-cum-monster would dare question that move.)
It continues, turning Western countries into full vassals of debt. More and more into assisted housing, child care bonus, and so on, Until we are truly bankrupt.
It began with T1’s borrowing and will end with T2.
A fitting dy-nasty.
Key words to watch: Income equality, marginalized people; sustainable cities; densification; better outcomes for vunerable people.
(Hey my TFSA is right now is feeling vunerable.

#53 Reality is stark on 02.21.20 at 8:02 pm

Governments in the west can’t stop deflation. They can only pump public money into infrastructure to slow the bleeding.
Interest rates continue to fall and housing goes up in price. The way you slow down the real estate market is by doubling property taxes every five years. This way the government can abscond with any money generated in the economy.
The teachers want the government to borrow recklessly to pay unrealistic salaries.
The taxpayer is tired and getting whipped at work. Private sector managers are expected to be vicious with white collar employees. No one gets a good evaluation any more. You need to show entrepreneurial zeal and be willing to work 70 hours a week to get any sort of recognition. Anything short of that and you are just another stiff.
Things are not going to get better here. Get used to it.
Men like Hunter Harrison will be hired to run the country, not bleeding heart softies like Donald Trump and Doug Ford.
Ours is a cost cutting future. Find ways to do more with less.

#54 Doug t on 02.21.20 at 8:09 pm

# Shirl Clarts

Hey Shirl – blow it out your ear EH

#55 leebow on 02.21.20 at 8:14 pm

It should be regulated as an investment product when they make forward looking statements like that. Unfortunately, people are financially illiterate and are easily fooled.

#56 technical analysis on 02.21.20 at 8:15 pm

when will the bank of canada actually grow a pair and raise their rates to at least the inflation rate. that would pretty much solve this problem.

#57 Sail away on 02.21.20 at 8:15 pm

#33 not 1st on 02.21.20 at 5:30 pm
#2 catzndogz on 02.21.20 at 2:41 pm
——
You do know that Vancouver went almost 70 days without a stich of sunshine this winter. I would rather freeze in Calgary with the sun on my face.

——————————-
There ya go. Calgary! Calgary!

Everyone who loves Calgary- join in!

.
.
.

[crickets]

#58 akashic record on 02.21.20 at 8:26 pm

#1 Borden Renter on 02.21.20 at 2:39 pm

Garth isn’t joking, people.

I live on base in Borden, about 25 mins west of Barrie, and I routinely have to dodge Elk and Bears on the commute to work. That’s not all, it’s also Coyote season, and there are roving packs in the forest trails at night. Be safe out there! Don’t venture anywhere north of Hwy 9 without a shot gun for protection.

Many don’t venture anywhere in the GTA without a Glock.

#59 not 1st on 02.21.20 at 8:41 pm

Well isn’t that convenient. Coastal Gas env permit rejected. Amazing timing. Construction now delayed, costs to escalate. Maybe Trudeau will buy the thing and kill it that way. What a joke.

$2B in spending on indigenous programs announced today too. So extortion works.

https://ricochet.media/en/2945/coastal-gaslink-environmental-assessment-rejected-construction-to-be-delayed

#60 Dr Talc on 02.21.20 at 8:50 pm

CBC propaganda goes to court.

https://m.youtube.com/watch?feature=youtu.be&v=VDPbi6p-6Ss

#61 Nonplused on 02.21.20 at 9:02 pm

You can double your money in 3 years with a margin account too. So long as your stocks go up. You can also lose all your money in 3 years with a margin account if the stocks go down. I think that might be the case with these condos too.

But if you insist on leveraging up, Up, UP! The margin account is the better way to go. First, there are many and varied investments and speculations you can make. The whole spectrum really including a Garth ™ portfolio. Second it is much more liquid. Third, the transaction fees are much lower as a percent of the trade. Fourth, you don’t have nearly the risk of ending up “under water” (Owing money that you can’t raise by selling the asset) because the broker will automatically close you out if you can’t meet margin. You can still end up owing money you don’t have, but it won’t just keep getting worse every day. They will give you a call, and if you don’t answer the phone or can’t post margin right there and then the sell your stuff and you are out. You can still lose all your money and end up owing them more, but it is more akin to tearing a band-aide off quickly than just fussing with it slowly. And usually they won’t sell all your crap, only enough to get you back in limit. Although there is no guarantee they won’t be ripping more band-aides off tomorrow.

Real estate is high leverage speculation for the masses. The rich hedge fund types use a margin account and judging by the number of yachts they have I think it must work better. It’s not for me though. I was only ever short a stock once and that was due to a miscalculation. Didn’t cost me much, actually as I recall I accidentally made a couple hundred. Oh ya and that reminds me with a margin account you can gamble your leverage both up and down. I don’t know how the common man can short sell houses. Maybe short a REIT? That would be for the very brave. If Tesla cannot go down, most REIT’s can’t either.

#62 AACI Home-Dog on 02.21.20 at 9:11 pm

RE: Cowtown Cowboy…As the last election showed, ON is home to the dumbest people in the country, reap what you sow fools.
Agreed :} 100%…

#63 Victoria on 02.21.20 at 9:14 pm

My husband rightly said if the developer was an investment company and said double your money they would be banned and shut down.

#64 Barb on 02.21.20 at 9:14 pm

They must’ve learned the formula for that “creative accounting” from Arthur Anderson, whose name was changed to Accenture because they were ordered to be less creative.

A condo on a lay-away plan.
Bizarre.

#65 Nonplused on 02.21.20 at 9:36 pm

#64 Victoria

The math these condo builders use is always the same for pre-builds. “We are selling it now before we’ve even dug in the dirt for $400,000, but once the building is built we will sell units for $500,000. So if you invest now and finance our project for us you can see a gain of $100,000. By the way it will take 2-3 years to build.”

I understand that logic but I have never understood why they couldn’t just get the money from a bank. Maybe it works better for them to have other people finance it. And pre-sales do help with financing. The banks like to see that they have a lot of other people’s money to go after if things don’t work out.

#66 Cici on 02.21.20 at 9:41 pm

Fuzzy logic indeed.

Along with a glaring spelling error on the pamphlet: “maintenace.”

If you can’t even trust the spelling, you probably don’t want to bank on the math.

#67 Wise Old Owl on 02.21.20 at 9:44 pm

Just a brief observation on # 54, Reality is stark.

If you get good at doing more with less you could eventually end up doing more and more with less and less. Until you arrive at where you are doing everything with nothing. At least to me that would seem to be the logical destination just like the Winky Wankie bird who flew in ever decreasing circles until he eventually ended up in his own rectum.

#68 Steven Rowlandson on 02.21.20 at 11:33 pm

In Barrie the room rental business offers rooms which may be vermin infested for between $500 and $800 per month to homeless adults who either have jobs or are on some kind of social program. By a room I mean a bedroom with access to common facilities or is part of someones home. Forget about normal adult lifestyles or saving money. The local organizations that help the homeless are recruiting operations for this outrageous usury and exploitation. This is the sort of thing that existed in the Wiemar republic and subjected people to the most inhuman living conditions. One bedroom apartments are sometimes available for $900 to $1400+/- a month. A sum not much smaller than some peoples incomes. Financial vampires indeed… This concept of real estate as an investment has to be quashed, prices abated and access to crown land for those in need has to be implemented to enable an escape from high costs for those less fortunate.
Real estate is a place to live , it isn’t an investment.

#69 Sail Away on 02.22.20 at 12:00 am

#59 akashic record on 02.21.20 at 8:26 pm
#1 Borden Renter on 02.21.20 at 2:39 pm

Garth isn’t joking, people.

I live on base in Borden, about 25 mins west of Barrie, and I routinely have to dodge Elk and Bears on the commute to work. That’s not all, it’s also Coyote season, and there are roving packs in the forest trails at night. Be safe out there! Don’t venture anywhere north of Hwy 9 without a shot gun for protection.

——————————–

Many don’t venture anywhere in the GTA without a Glock.

——————————–

I bike to work most days and have a real problem with roving packs of junkies. Naturally I carry a Glock- the problem is shooting accurately from a bike. I’m pretty sure if they break your skin it turns you into one of them.

#70 WillinSC on 02.22.20 at 12:19 am

Hey USA USA
Comrade Trump 2020 Da!

#71 Ponzius Pilatus on 02.22.20 at 12:25 am

#23 DM in C on 02.21.20 at 4:24 pm
The marketing company can’t even proof-read (maintenance is spelled wrong under Cash Flow), how can they be trusted to do basic math?
———–
300 k new house horny immigrants coming to Canada.
All they want is marble countertops and stainless steel appliances.
Where do I sign, that’s all the spelling they need.

#72 WUL on 02.22.20 at 1:25 am

As an Albertan way up north in the Taiga (The Mac at +3 degrees Celsius and 57 degrees North), I hereby proclaim and pronounce we will not be buffaloed any longer! You can take that to the bank (for low returns)! Damn straight!

Cheerio,

WUL

#73 westsider on 02.22.20 at 2:42 am

Beware when you buy a condo in Vancouver. The condo across from us in the west-end has just has scaffolding go up 360 degrees. The owners have a bill of over $200K each…yes, $200K each to fix the building and at least a year with covering over the building. There is still an add for a 2 bedroom for rent in the building for $2700. Good luck with that!!!!

#74 crowdedelevatorfartz on 02.22.20 at 4:24 am

I was at a suppliers warehouse picking up some material.
Stared talking to the 40-ish fork lift driver.
Asked how busy they were these days.
( the place was like a morgue at 8am and they open at 7am)
“Oh it’s ok, kinda slow.”
I opined that perhaps it was the economy slowing down and the bubble had burst.
“I’m ok, if I lose my job. I own 2 condos and a townhouse that I rent”
“You OWN 2 condos and a townhouse?”
“Well, no. I bought them over the last few years and the renters take care of the mortgages.”

Yikes…..
Reminded me of when I was in Palm Springs in 2007 and the waitress was late for her shift. The bartender asked her where she had been. “Oh i bought a house today”
“How did YOU qualify for a mortgage?, asked the bartender, “You went bankrupt last year!” Shaking his head.
The the bottom fell out in 2008.
This 2020 Made in Canada real estate ponzie is gonna fall hard.

#75 crowdedelevatorfartz on 02.22.20 at 4:33 am

@#59 Akashic record
“Many don’t venture anywhere in the GTA without a Glock.”
+++

Ah yes the anti gun propaganda spews forth.
Everyone is packin heat.
Ignoring the stats that gun crimes are down. ( most crime is down.)
Here’s a solution.
Forget pumping more billions into an already beaurocratic gun control system that punishes Law abiding legal gun owners.
How about we actually enforce the Laws already on the books and start incarcerating thugs with guns?
Oh, right. this is Canada.
We poopoo actual prison time (too costly?) and after years gaming the legal system…..give thugs with guns community hours and time served as “punishment”.
But the stories in the media are so much more marketable when we hear the streets are a “crime wave of violence”.
Just ignore that violent crime is…..down.
That doesnt sell.
But urinating more billions in tax dollars down the drain makes for good pr….. just ask Little Potato
What a joke.

#76 Unicorn farts stink bad on 02.22.20 at 4:36 am

#62 Non. Exactly. Only buy the stuff that goes up. And never mind the cloud of black swans circling overhead. I had a conversation about BKNG Holdings recently with someone asking what to do, given the current Chinese Bat Eater Virus.

“ I asked “How old are you”. They confirmed they had decades before retirement. I pointed out that BKNG enjoys a fat duopoly with Expedia and that fact that approx 30,000 people are born every second on the planet. Blank stare. “Every one of those people wants a vacation too” I said. Do the math.

I apply the same rationale to everything else. Demand is increasing exponentially. Billions of people want their first car, fridge, business class lie flat seat. They’ll want light, heat, condoms etc etc etc. Think about it , Gretas cute, but woefully under experienced with the stuff that makes a life for the other 7 billion humans.

Go long profiteers. The future of the vacation business is assured. You know how Gen X and Mills have hate on for Boomers and want to have everything the Boomers have? The Gen A’s coming down the pipe are going to laugh at your silly tattoo’s and life on Earth will carry on.

#77 under the radar on 02.22.20 at 5:29 am

Condo insurance #20 You are talking about the deductibles for the condo corp , not individual owner policies. Big difference.

Condo Math – Real world maybe a 3% return on cash.

Buying a condo in Barrie to spec is a pure amatuer who can’t afford to buy a condo to spec in the 416.
$1800 rent in Barrie for 563 sq ft wishful thinking, more like 950.00

Debt Storm. It does not hit the fan until there are significant job losses or much higher rates. Not soon.

#78 Stan Brooks on 02.22.20 at 5:56 am

Come again… 1400 for one bedder in …Barrie?

$ 1200 per square feet ‘cheap’ condo, normally priced at # 1500/16 500 per square meter?

Suckerville, indeed.

While you can enjoy 10 % of that cost in parts of Europe with actual higher net salary and much better services and weather.

Makes you wonder what kind of idiots at all levels keep beating the dead horse of real estate in this place, it seems there is no other economy left after all, just ‘housing’ and derivatives.

Enjoy folks.
Cheers,

#79 Fact Finder on 02.22.20 at 6:35 am

BANNED

#80 Cbo on 02.22.20 at 8:00 am

2 important dates when buying a pre-con.
Occupancy date: your unit is ready for possession. You must take the keys. The building is not complete though, so the bank will not give you title yet. What happens is, you are asked to pay a phantom rent to the builder from 3m-12m. It’s completely out of your control and you are building zero equity.
Registration date. You finally take title. The mortgage kicks in. At this point, a board is formed. They now take control of the budget. Those maintenance fees the builder quoted are ALWAYS low ball estimations. Once the budget is transitioned to the board and that fiscals budget is set, expect maintenance fees to increase 10-25%, guaranteed. Plan for it.
Unlike the depiction in this shyster pro forma.

#81 COVFEFE-19 on 02.22.20 at 8:00 am

“I bike to work most days and have a real problem with roving packs of junkies.”

You people are all doing it wrong. I’m retired, can walk to the subway, and see or hear coyotes a few times a week recently. No junkies, though. Location, location, location.

#82 crowdedelevatorfartz on 02.22.20 at 8:43 am

Newsflash:
Trudeau demands protesters take down barricades…
” Its been 2 weeks now and its time they come down…”
Trudeau is not ordering the police to take action.

Protesters ignore Little Potato’s demands…..

https://nationalpost.com/news/canada/wetsuweten-chiefs-to-spend-friday-with-mohawk-supporters-in-ontario

Is it me or do politicians make unpopular announcements on Fridays to avoid the pr and House of Commons backlash for a few days…..?

#83 G on 02.22.20 at 9:20 am

#32 world traveller,

Just an observation. T’s news conference yesterday,
I saw deer in the head lights and a definite shoulder shrug as he said it’s up to them now. (It’s not my fault it’s the other guy’s)
(And it’s the cops job to keep the piece.)

I Hope the OPP has been talking with the RCMP in BC about them removing all there stuff/trailer and people from the Natives land. at least to see if that works first.
Better to try that than endangering your own people by escalating on your own. That’s

#84 crowdedelevatorfartz on 02.22.20 at 9:27 am

I wonder if Little Potato is finally decided to “get tough” with the protesters now that his last bastion of Quebec voters are getting fed up with the rail blockades in La Belle Province.

Je me souvien Oka.

https://montreal.ctvnews.ca/quebec-premier-fed-up-with-railway-blockades-demanding-trudeau-intervene-1.4818511

Poor Little Potato, painted himself into a politically correct corner with no way to get out without ruining his trendy brown shoes and trendy sox.

#85 G on 02.22.20 at 9:36 am

Hi Garth, re: todays post attempt

Your software (I assume) that’s looking at postings as they are being typed here is not helpful, in some ways. I understand if it’s something you already said. But not as you are posting/typing that comes up telling persons, to slow down your typing to fast, and then deleting what you already typed out, is lets say frustrating.
That just my two cents.

It was an add on post to another posters thread. But now I need to do other stuff. Have a nice day.

#86 COVFEFE-19 on 02.22.20 at 10:17 am

Well, I slogged through the Buffalo Dump. What twaddle!

Apparently, my province was settled by shiploads of bankers and lawyers! Because those sorts are always moving from old, cosmopolitan money centres to homestead bug-infested muskeg, right? I sentence the manifesto’s signatories to read some Stephen Leacock and Robertson Davies to get a flavour of their so-styled colonial masters. Then, next time they’re heading to Ottawa on the taxpayer’s dime, maybe they can drive instead of flying, and count all the bankers and lawyers between Nipigon and Chalk River. If that’s too mentally and physically taxing for these claimed descendants of Hard men and women, I will accept, in lieu, proof that they’ve viewed every episode of Letterkenny, twice.

And who the heck are these Laurentian Élites who’ve supposedly been running/ruining the country? Mulroney was the son of a mill electrician, Chrétien was born into poverty, and Harper was neither Laurentian nor elite before his rise to power. Kim Campbell and Joe Clark were from out West, Peter McKay and Robert Stanfield from down East. Is there a secret cottage on Lake Memphremagog where all the REAL decisions are made that Mordechai Richler didn’t tell me about?

I get the points about under representation in Parliament. But much of the rest is so loony so as not to be taken seriously.

#87 Sold Out on 02.22.20 at 10:34 am

Imagine if you had big bucks and bought on the top 20 floors of this NYC project. Now your suite is going to be dismantled. How is that going to affect maintenance fees and prices for remaining owners?

https://www.cbc.ca/radio/asithappens/nyc-woman-ecstatic-as-judge-orders-20-floors-cut-from-already-built-condo-1.5471612

#88 akashic record on 02.22.20 at 11:20 am

#70 Sail Away on 02.22.20 at 12:00 am

#59 akashic record on 02.21.20 at 8:26 pm

I bike to work most days and have a real problem with roving packs of junkies. Naturally I carry a Glock- the problem is shooting accurately from a bike. I’m pretty sure if they break your skin it turns you into one of them.

If you carry your Glock to work you are one of them already, law abiding gun owners have to keep their Glock locked up at home. Unless, of course, you work on a shooting range, but then you have no excuse to miss the shots from your bike.

#89 Doug in London on 02.22.20 at 10:33 pm

What, 410 grand for a small 1 bedroom condo in Barrie, with no dirt included? Please tell me you’re joking. Then again maybe not, April 1 is still about 5 weeks away. How can this insanity not be a bubble?

#90 Steven Rowlandson on 02.23.20 at 8:25 am

I did something I rarely do and that is take a better read of Garth’s posts and it looks like the subject matter is all about the five points project. If not it is about a proposed twin towers project north of the bus terminal at the corner of Maple and Dunlop streets. One is dodgy and the other dodgier. Then there is an allegedly affordable housing hi rise project proposed for the corner of Sophia and Bayfield streets then there is another commercial – residential project planned for a parking lot and other residences across from the Barrie public library. A block or two further east near the court house, town hall and the bank of Montreal is a recently finish high rise formerly known as the Mady center and a proposed Sobey’s supermarket. Both are only partially occupied. All of the projects are going to have parking problems and all parking from my point of view is expensive. Oh yes further east along Dunlop street near the site of the old dairy more high rises are being planned. Like it or not you need more than wild and crazy plans and real estate speculators to make such projects a success. You need plenty of owners and tenants that have exceptionally large incomes.
Those income don’t come from local employers for the most part. You want to know what luxury real estate is?
Anything equal to or greater than a coffin.

#91 Leigh on 02.23.20 at 12:55 pm

Not sure if anyone noticed, but in their sham profit calculations, they also double counted the principal payment to show a bigger profit.