Days ago this blog told you about Willow. That’s the outfit seeking to establish a fund which will buy real estate with 100% funding (mortgages and crowdfunding) then pay unit-holders an undetermined return. Willow will make money from real estate fees, transaction charges and a 1% MER. Then it will go to an IPO in four years and make its founders billionaires. Anyway, that’s the plan.
Willow apparently has no properties yet, but it’s building a wait list of horny young’uns who want real estate and can’t afford any. As you may have noticed, the guys behind this were not too thrilled with my attention.
But Willow was just a mosquito. Today we bring you news of a velociraptor.
It’s called Ourboro. Like the government’s dumb shared-equity mortgage (the First Time Home Buyer Incentive Program) this group will give newbie buyers a wad of money (up to $250,000) and then adopt an ownership position in the house. Unlike Ottawa’s plan – where there’s a 25-year period and a reasonable pay-back option – Ourboro has teeth. Big raptor ones.
The pitch is seductive:
“Get up to $250,000 toward your down payment and turn your dream of homeownership into a reality. Our contribution is not a loan, so there is no interest or additional debt. Instead, we buy a share of your home. When you decide to sell, we each receive our fair share of the gains or losses. And shared ownership doesn’t mean you need to share your space. In other words, you no longer need to own 100% of the home for it to be 100% yours to enjoy.”
The formula is simple (but only for those living in the GTA). The kids save up a 5% down payment and obtain loan approval, “from our lending partner.” They make an offer. Ourboro pumps in its cash and the ownership structure is set. If the down is $300,000 and the buyers pony up $100,000, Ourboro has rights to two-thirds of all current and future equity. Ourboro is not on title, but registers a restriction which means the owners cannot sell or refinance without permission.
For ten years the kids get to live there and play house. They pay the mortgage, property tax, utilities and maintenance. They’re contractually obligated to keep the property in good repair. If they want to do a reno, they have to ask for Ourboro’s permission. After a decade it’s crunch time. Either the owners are forced to sell – when the equity (after financing and costs) is split between the two parties in accordance to their share – or the owners buy out Ourboro at market rate.
At the time of forced sale Ourboro appraises the property and, “if it is determined to be in state of disrepair to the extent the value is considerably lower than similar properties for sale, we have a right to reclaim a portion of that difference from the proceeds of sale.” In fact, Ourboro can take the place over entirely in these instances: “(a) Use of the property for illegal activities (b) An unauthorized sale, or attempt of an unauthorized sale, of the property (c) Failure to abide by the owner obligations stipulated in the contract, this includes not selling the property or not buying out the Ourboro share of the property within the 10-year term of our agreement (d) The filing or potential filing of any construction liens against the property (e) An event of insolvency.”
There’s more. Ourboro can transfer its interest in your house to a third party at its discretion. Plus, if the real estate declines in value after a decade, the owners will not be able to buy out the corporate share. Real estate has to appreciate by 6% a year (which exceeds historic norms). If not, “it will be at Ourboro’s discretion whether to accept the buyout offer.”
And this:
“When our 10-Year Term Ends If our 10-year term is nearing its end and you are unable to buy out our interest in the home, you must begin the property sale process 90 days before the term ends. Once our 10-year term ends, you will be obligated to purchase Ourboro’s interest in the property. In the event that you do not buy out our share after the term ends you will be considered in default of our agreement. In this rare instance, Ourboro will have the option to exercise a mandatory sale.”
Now, on the plus side, newbie buyers get to live in a sweet house engendering serious envy among their peer group. Woohoo. The Ourboro raptor living in the basement will be their little secret, until it emerges in a decade to ravish their equity.
Here’s a better option. Just ask Mom. She doesn’t bite.
About the picture: “This is Maui, our 5 month old Cockapoonian who attended online kindergarten for 2 weeks with our son here in Calgary,” write Chad and Karen. “The kids are back in class now but Maui definitely made third wave homeschooling way better for all of us. Thanks again for everything.”
99 comments ↓
Madness, a special kind of madness.
Bad Dino!
Ourboro should be renamed to “Our Borrow”
These sharks smell blood & they’ll have lots of prey.
I think these deals will end up biting them in the tail…
Wow, Ourboro is The Perfect Scam. Designed to blindside the IQs of desperate newbie buyers by appealing to their greed and desperation. Ka-Ching… most will only see the $ signs and forego reading the fine print.
Note to young, Millenial law students: go ahead and rack up the student loan debt. In ten years time, you will be rolling in dough thanks to this outfit!
My cousins in Italy own nothing and are happy. Work part time if they’re lucky and hit the beach daily with a morning espresso at the local bar. That’s the life. Not this life here in Canada of debt and 9 months cold winters. I don’t even hear of them having any medical issues unlike here where our hospitals are crammed of chronic sick people.
Om nom nom nom nom
https://en.wikipedia.org/wiki/Ouroboros
Ourboro has a better chance of success than Willow. The reason is because with Ourboro you get to show of your glorified rental whereas with Willow you can’t walk anyone through the fabulous kitchen.
Comparing these two vulchers is like comparing a mutual fund and holding cash. Neither is a good choice but at least one gives you a chance to get what you want.
Very creative, ourboro. Private equity – with leverage provided by the bank. Basically they have created preferred equity for themselves but with a “coupon” towards the end.
I’m dying to comment on the ‘elephant in the room’ in this scenario, but the clowns just pulled up into the driveway and are pleading with me to take them for a spin. An abundance of animal magnetism can be a real curse…. mercy
Let me get this straight. If Ourboro puts up 50% of the down payment, then they own 50% of the house *forever*? No matter how much additional equity I build through mortgage payments (to which Ourboro contributes nothing)? After ten years, I have to buy out Ourboro based on the market value of the house? If it’s worth 2 million, I have to cut them a cheque for 1 million?
PRECIOUS.
They’ll do anything they can to get their hands on it.
Canada, a nation of RE Gollums.
Sounds like a something from out of a futuristic Mafia movie.
I won’t need to do this. I pumped my entire life savings into GameStop, Blackberry, and AMC stock. My coworker that sits beside me convinced me that they are all going to hit $1000 a share pretty quick here, so he’ll be retiring, and I’ll be getting into the real estate market.
It’s gonna be sweet!!
via wikipedia:
“The ouroboros or uroboros (/ˌ(j)ʊərəˈbɒrəs/, also UK: /uːˈrɒbərɒs/,[2][3] US: /-oʊs/) is an ancient symbol depicting a serpent or dragon[4] eating its own tail. Originating in ancient Egyptian iconography, the ouroboros entered Western tradition via Greek magical tradition and was adopted as a symbol in Gnosticism and Hermeticism and most notably in alchemy. The term derives from Ancient Greek οὐροβόρος,[5] from οὐρά oura ‘tail’ plus -βορός -boros ‘-eating’.[6][7] The ouroboros is often interpreted as a symbol for eternal cyclic renewal or a cycle of life, death, and rebirth. The skin-sloughing process of snakes symbolizes the transmigration of souls, the snake biting its own tail is a fertility symbol in some religions, and the tail of the snake is a phallic symbol, the mouth is a yonic or womb-like symbol.”
I thought willow was predatory but this raptor sounds horrible. Why not just buy some run of the mill REIT???
#77 Sail Away on 06.06.21 at 10:38 am
#74 Stone on 06.06.21 at 9:18 am
Like I said, I like to listen to… people who are smarter than me.
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That is an almost unimaginably long list. You’re welcome.
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Ouch! Methinks Stone has been stoned to death… I think his days are done on this pathetic blog.
The definition of crazy just got upgraded.
Looking forward to making money from investing in the right to breath and drink water.
Oh my…where do you find these gems , Garth ?
The name (Ourboro) seems so delightfully ominous that I can’t help but think this has to be some sort of advanced satire.
Ourboro – sounds like a clever play on Ouroboros, aka the Midgard Serpent the world spanning serpent of Norse mythology who is apparently a key element in their version of the end of days.
The concept sounds very like the RE version of a vehicle lease, except vehicles for the most part depreciate so equity ravishment isn’t something likely to occur. The 2/3rd to 1/3rd ratio upon the sale of the place sounds a tad excessive. Despite hearing that the younger generations are not a fan of owning – rather, they believe in the ‘sharing’ economic model – seems likely that any one of them who take this company up on its offer will not be happy about having to ‘share’ 10 years down the road. This supposing that the kids do stick to the same digs for 10 years.
Regardless, I can certainly see how this pitch will bring in the suckers – er – interested parties. I’ve no doubt most will stop reading at ‘up to $250,000, interest free!’ & sign on the dotted line. Any of the less desirable elements will be vague noise in the roar of excitement at the thought of getting those shiny digs. 10 years seems so far away…..
“For ten years the kids get to live there and play house.”
Haha….what have we done to our kids? Lol! Why is the defining factors of our short lives dependent on what people think of us? We are lonelier, more depressed, have more mental heath issues…than…EVER. I’ve been counting. My Cry Group is as popular as ever!!!
Newsflash**Grass is most certainly NOT greener on the other side. If you think so, you will never be appeased. You will search and search…until you DIE. Unhappy! Haha.
Interested to see how many people fall victim to this scheme – 10 years? I’ve been in my place for that long and am just beginning to like it.
Thanks for the stimulation, Garth and team! Enjoy your Sunday!
Og
This experiment could fail miserably in our “almost” socialist country. I see a lot of lawsuits and craziness after 10 years !
Where’s the government? Should be illegal
#19 Larry Appleton on 06.06.21 at 3:48 pm
Oh my…where do you find these gems , Garth ?
_____________________________
Larry, it’s called the Internet. You know the thing VP Gore took credit for…. before he got into the whole climate change scam… After he found out he could get rich pulling the wool over peoples eyes?
Do give it a try! You might like it.
What about the BOPM (Bank Of Photo-op Minister)? They can print $ galore and buy air’body a mansion and unicorn-pony. What a great country we could then be…
I have my Total Residential Sales, Listings, Absorption Rates and Months of Inventory charts up for the 6 biggest cities in Canada with the May data: http://www.chpc.biz/sales-listings.html
I also include the 10 year spread in these data and sales have increased over 10 years the most in Edmonton at 59% (5.9%/yr) but the 10 year spread in Edmonton inventory rose only 17% in to years (1.7%/yr)
In contrast over 10 years, Toronto re-sales increased 19% (1.9%/yr) and Toronto inventory DECREASED 24% (2.4%/yr).
As inventory levels begin to rise which they are doing now and have been since the start of 2021 (a seasonal event) across the data we should expect to see a return to more price negotiation and away from “buy at any price”.
In my experience, buyers are better informed than sellers, because they physically look at more listings than sellers do in their decision making process and are constrained by personal financial data. Sellers get hung up on “comps” which were created in the past and they get hung up on what they want or worse what they need whether that is to liquidate or move up.
Sadly for the little boy, even reptilian brains still have about 25X the IQ of canines.
He should move up the ladder and get an iguana instead.
A fool and his money are soon parted……
There’s a sucker born every second…..
You can’t fix stupid…..
Garth, thank you for sharing not only your knowledge and wisdom about all assets, but your continuing to show us the unethical schemes put forward by these businesses, and individuals, and courageously, name them!
Freedom First
“
#22 ogdoad on 06.06.21 at 3:59 pm
“For ten years the kids get to live there and play house.”
Haha….what have we done to our kids? Lol! Why is the defining factors of our short lives dependent on what people think of us
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Could be something to do with this quote although the ages might need to be ramped up for this era.
“When you’re 20 you care what everyone thinks, when you’re 40 you stop caring what everyone thinks, when you’re 60 you realize no one was ever thinking about you in the first place. You have enemies? Good. That means you’ve stood up for something, sometime in your life.”
— Winston Churchill
Remeber when Ourboro was called Me to We…
The mutating evolution of financial derivatives began when? What year?
This one takes the cake! I once saw some homeless street kids panhandling in the Byward Market, and they had a couple of signs. One said “Money needed to buy a 24 and a few packs of smokes.” The other sign said “Money needed for a penile implant.”
I suppose some people gave them money, just like some people will buy into the reptilian scam. At least in both scenarios they are both upfront.
Willow and Ourboro are both things to stay away from
because too many things can go wrong.
Comforting to see that dirtbagism is not the exclusive prerogative of real estate agents and the CREA. Please continue outing them Mr. Turner.
#28 Felix on 06.06.21 at 4:24 pm
Sadly for the little boy, even reptilian brains still have about 25X the IQ of canines.
He should move up the ladder and get an iguana instead.
**********
Felix, how could you say something negative about that precious picture. A boy and his dog.
They must have got this whole concept from the template that the CCP has in China where everybody in China can only own their house or apartment for 70 years and then it reverts back to the government
The formula is simple (but only for those living in the GTA). The kids save up a 5% down payment and obtain loan approval, “from our lending partner.”
I love this:
“from our lending partner.”
BUT
The Big 6( banksters )might not like this.
We, at CMHC are providing this Ourboro with money for this to help keep housing affordable.
At risk of settling off TN, This is a 20 minute or so read, but well worth it. It tends to explain where Trudeau, Freeland and the liberals political agenda known as the “Great Reset,” or the “Green New Deal,” or “Building Back Better.” Is coming from. Scary stuff.
https://nationalpost.com/opinion/peter-foster-mark-carney-man-of-destiny-arises-to-revolutionize-society-it-wont-be-pleasant
our borrow
our borough
ouroboros (the snake eating its tail)
the company could not have missed these various interpretations. ask them. if they are reluctant to answer then it’s the snake
So let me get this straight. You have to pay all the mortgage interest, maintenance, taxes, etc. but only own 1/3 of the home? And what happens to any equity you build by paying down the mortgage? Is it yours or 2/3 Ourboro’s?
Just using Garth’s example to keep things simple, if Ourboro gets 2/3 of any equity built up by paying down the mortgage, they are in a “no lose” scenario. That is their return on investment right there even if prices do not go up. At least the bank lets you keep any principle you have paid down.
Also I don’t understand why Ourboro would not be willing to extend the deal another 10 years if things are going well. Why force a sale just to have the house purchased by another Ourboro customer? Why not just renew the contract with the current customer based on market prices and shared equity? I suppose in markets like YYZ where we are seeing 30% y/y gains the original customer would still have to bring cash (lots of it) to renew at the 10 year mark because their equity is only going up at 1/3 the rate Ourboro’s is, but still. If the deal is good for Ourboro over 10 years, why not 20 or 30?
And what happens if you need to sell the house after 5 years due to job loss or the need to relocate? Are there penalties?
Do you have to live in the house, or could you rent it out? If you can rent it out then this is basically a rental franchise similar to a 7-11 or Subway. They own the building, you own the shelf stock (pop & chips) and operate it.
Anyway I see it as a sign of the top of the bubble. The closer you get to the top of a bubble, the more convoluted conniving schemes appear. It seems that it is the nature of a bubble to draw in all available money before popping.
And where are Ourboro’s investors coming from? Why on earth wouldn’t you just buy a REIT?
The end must be near.
https://www.theglobeandmail.com/real-estate/vancouver/article-real-estate-boom-is-feeding-family-legal-disputes/
Death and then ‘death by house’ Act II.
The symbolism is not lost… Ouroboro is an ancient symbol depicting a serpent or dragon eating its own tail.
And the poor er…clients…will be trapped; indentured servants!
Trapped in the event of a job loss, death, divorce or other disaster. Or even a promotion to another city.
And they bring the lender? Oh, that’s just greedy…or a proper lender wouldn’t let you do this, I imagine.
I met a lovely realtor the other day, making more money than she knows what to do with, and she said, “I don’t know how our children will ever afford houses!”
Crocodile tears, madam.
“if it is determined to be in state of disrepair to the extent the value is considerably lower than similar properties for sale, we have a right to reclaim a portion of that difference from the proceeds of sale.”
Insurance companies should expect a lot of lighting strikes and faulty wiring around this time.
Ourboro and the Willow sound “reasonable” to the principal architects who run these ‘rackets’…
But what happens when neither gets enough customers or traction in the market. Or the architects get bored with this business venture…
You the unit-holder get screwed when they wind up these byzantine ventures.
#40 CJohnC, right. Scary, and he advises them.
The only ones who will make money from that contraption will be the lawyers.
Re:0uroboro
It’s a well known fact in marketing that the young ones like foreign sounding brands.
Somebody up for a Haagen Dazs.
@#30 Don Guillermo
“You have enemies? Good. That means you’ve stood up for something, sometime in your life”
– Heard!
Og
Consider the following:
https://www.zerohedge.com/news/2021-06-06/energy-crisis-now-guaranteed
As governments continue to try to legislate the laws of physics and thermodynamics (is that redundant?) out of existence, things will get worse before they need to.
What are they trying to do? Save the remaining oil for the rich and powerful so they can float their yachts and fly their private planes for longer? Oh and the US military of course, which is the largest consumer of fossil fuels on the planet.
I am increasingly convinced that the Ph.D.’s in the “think tanks” know something we don’t, namely that we are closer to the end of the fossil fuel age then they would like us to know. The conspiracy theory being that the carbon emission reduction targets reflect more or less what is going to happen anyway all on its’ own. But this way it can be sold as “saving the planet” rather than “we are running out of gas, kids put your shoes on we are going to have to walk the rest of the way”.
Peak “cheap” oil happened right about 2006, as predicted. Once that is understood, much additional understanding can follow. It explains nearly everything.
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So on to another new conspiracy theory (it’s Conspiracy Sunday after all); Keystone XL. Why would a US president cancel a project that promises to bring cheap Alberta oil down to Texas where them crazy Texans can upgrade it to products and then sell it to the world at huge margins? Create lots of jobs? Well, it will be built and they will sell our oil as products to the world. But it can’t be done until the shale oil producers have paid back their loans to the banks. This is no time to have a new competitor on the block.
The US frustration with and sanctions on the Russian-German Nord Stream 2 pipeline can be seen in the same light. Germany and Europe are already heavily dependent on Russian natural gas transported on existing pipelines, many going through Ukraine. So what then can be the problem with one more pipeline? Well, it is because the US spent untold billions building LNG facilities with a view to sell that gas in Europe and the world. They thought the shale gas would never run out. But the loans are there and they need to be paid back. Nord Stream 2 is in direct competition with all the US LNG that has been built. And the Russian gas will be cheaper because it is not from shale and it is not liquified. A win for Russia, a win for Germany, but a loss for US banks. US banks do not like losing. And there is virtually no limit on how much they can contribute to political campaigns.
The US has the best government money can buy.
#37 Willem Schiere on 06.06.21 at 5:43 pm
They must have got this whole concept from the template that the CCP has in China where everybody in China can only own their house or apartment for 70 years and then it reverts back to the government
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We already have that in Canada. It’s called property taxes. What’s better about it is that property taxes are more of an installment plan.
#46 Hilroy on 06.06.21 at 7:10 pm
“if it is determined to be in state of disrepair to the extent the value is considerably lower than similar properties for sale, we have a right to reclaim a portion of that difference from the proceeds of sale.”
Insurance companies should expect a lot of lighting strikes and faulty wiring around this time.
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Probably needs to be rebuilt anyway.
#51 Nonplused
Consider another hobby
On the horizon or something similar for those whose cash flow begins to slow to keep the party rolling: https://www.unison.com/
https://youtu.be/plzw1NWVYSM
This is how the newbie homeowners will be after 10 years is up.
Well, the financials aren’t quite as bad as they first appeared. From the Ourboro FAQ:
There is a very specific sequence in how the funds from the sale of your home will be distributed. The proceeds will first be used to pay back anything owed to lenders, followed by any third parties as part of closing transaction costs. Next, the total amount of the principal payments you have made towards your mortgage will be returned to you. Lastly, all remaining proceeds will be divided based on our respective equity percentages in the home.
Yellen Admits Inflation Is About To Surge, Says It Will Be A “Plus For Society”
TOTALLY CLUELESS, OUT OF CONTROL AND BASICALLY DO NOT CARE…..
What a world for the 1%…what a word and no one says a thing….stealing the future in plain sight and no one cares…..
You should see what the crypto token Cardano is doing to real estate.
Crowdfunding, HELOCs with stable coin swaps, rental properties, full deeds registered on the platform all through the money invested into Cardano.
Something like 100 to 1 leverage.
That 2M dollar shack in Vancouver now only costs 200k up front. No banks involved.
If I did not read it this from a trusted source (Garth) I would never have believed it.
I am conflicted by why this is happening or ever being allowed to happen?? This country is really becoming a really screwed up place.
Big banks are certainly losing (have lost) appeal for others to challenge them like this.
Beware bankers, more of this is coming but hey, keep raising those rates during a pandemic and record profits, what could possibly go wrong, imbeciles!!!
Time will tell!
#57 Joe on 06.06.21 at 8:42 pm
Well, the financials aren’t quite as bad as they first appeared. From the Ourboro FAQ:
There is a very specific sequence in how the funds from the sale of your home will be distributed. The proceeds will first be used to pay back anything owed to lenders, followed by any third parties as part of closing transaction costs. Next, the total amount of the principal payments you have made towards your mortgage will be returned to you. Lastly, all remaining proceeds will be divided based on our respective equity percentages in the home.
—- –
Except:
“…all remaining proceeds will be divided based on our respective equity percentages in the home.”
The “equity percentage” is set via the percentage Ourboro put towards the original down payment – the only input they ever make. When it comes time to sell, if they paid 50% of the down payment, then they take 50% of the capital gain – **on the entire house**
Sweet deal! I think one of the co-founders is behind the lending scheme too (you can’t use your own bank).
The whole plan here is to get you into a house they think will appreciate huge by shelling out say, 50K for a down, hook you up with a mortgage from one of their associates so they get paid too, then have the home owners cover every penny of the cost of ownership for ten years. If the place appreciates +800k by then, and the down was 100k total, they walk away with 400k. I’ll bet those “closing transaction costs” will be shocking too…
They are shopping for desperate imbeciles with this plan.
Delightful photo from Chad and Karen!
Ourboro obviously isn’t a misnomer.
They will own it, lock stock and barrel, after 10 years.
And we thought Willow was insane.
Trudeau made a big deal about his attending the G7. He didn’t go, why? I guess we find out in 20 years when the Covid Prison Hotel decision secret fiasco is made public? How much more good news can Trudeau hide from Canadians? I might move to Africa for more transparency in government.
i see alot of negative comments on ourboro,yet there is a positive spin for the borrower.ist you get to use their money for free,no interest for 10yrs while you pay for what you borrowed from the banks,plus maintenance and utilities, sounds fair to me. if you are smarter and just sold your house and pocketed 600,000 net,why not borrow from from ourboro and pay cash for your digs and worry about maintenace,taxes and utilities for the next 10 years and save yourself abundle
Yup yup I posted this the other day. Now the Mainsteam twigs. That cold winter week March 2020 – when the world fell. This is WW3. Wags say that all wars are bankers wars. We’ll see
#59 TurnerNation on 06.02.21 at 2:14 pm
Life in Occupied Kanada. Wait and see what else is planned for this post national state.
And why Sir Blog Dog Carney was brought back here.
https://nationalpost.com/opinion/peter-foster-mark-carney-man-of-destiny-arises-to-revolutionize-society-it-wont-be-pleasant/wcm/7cbd3be5-b3db-483d-98d9-ffd057f11c85/amp/
Peter Foster: Mark Carney, man of destiny, arises to revolutionize society. It won’t be pleasant
What Carney ultimately wants is a technocratic dictatorship justified by climate alarmism
……
Looking back the time to flee this country would have been when T2 declared it a Post-National State; and also cried; and declared himself a feminist. Could things really have trended upwards from then? No.
Fool me once…
……….
How did we get here? Perhaps of interest to Yellow Tractor Guy. Kanada from the eyes of fed-up immigrants:
https://trappedincanada.home.blog/2020/04/13/do-you-regret-moving-to-canada/
““ The culture is very much rooted in all the trappings of left-wing ideology. You are taught from a very young age to look at wealth and upward mobility with suspicion. There’s a general mentality of victimhood and entitlement. If you’re not successful it must be the fault of corporations or rich people. The gov’t is supposed to solve all your problems. I find this to be very demoralizing and depressing.””
Who would invest in this country? They are not even hiding it…total takeover. Was I exaggerating the past year?
https://winnipegsun.com/news/news-news/vaccine-supply-no-longer-the-limiting-factor-in-pandemic-fight
We must get to 75%, then to 80% and 85% and higher. Those numbers are achievable and necessary so we can get our freedoms back. Freedoms that perhaps we took for granted until recently. Freedoms that many people didn’t enjoy before they came to this country. Freedoms the many people had taken away from them, like our Indigenous Canadians in the earlier days of confederation. Those freedoms are treasured things.”
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-Ottawa parents protest Ontario’s decision to keep schools closed
Jun 4, 2021 – Ottawa Citizen
Ottawa parents took to the streets Friday to protest the provincial government’s decision to keep elementary and secondary kids learning at home online for the rest of the school year.
https://www.youtube.com/watch?v=vZMIMTBk96Q
— Cute, they still think it’s about ‘health’. Again this all makes more when you realize that our elite rulers consider *us* as the virus, to be contained.
War on Terror, War on Drugs, War on Covid. Endless. Each one results in loss of our rights, jail time, and so on.
https://www.instagram.com/p/CPwEbuBl49r/?utm_medium=copy_link
Live footage from Montreal where thousands have gathered in the streets in opposition to the province’s strict health measures kept in place despite the steep drop in cases.
.California governor won’t lift virus ‘state of emergency’ (turnto23.com)
.Airlines press U.S. on refusal to lift COVID-19 travel restrictions(reuters.com)
.No charges or tickets after Toronto police break up Riverdale Park rave (cbc.ca)
.As southern Manitoba swelters, people warned to use pools, splash pads for heat relief only — not recreation (cbc.ca)
No sane person would enter into an agreement of this sort, having two Goliaths to contend with (the bank and
Ourboro). For the final disposition of the property the Ourboro clan will be the judge and jury; you can imagine if the market is down and the sale price not to their liking, they will enforce some punitive and likely bogus penalty on the owners (property was not maintained to a high enough level, yada, yada….).
Is there not any Gov’t oversight on arrangments like this? Can Ourboro decree any closing terms they choose? No restrictions? Perfectly legal?
. You will have two Goliaths
Um … this is a pretty horrific product. The past big wins on RE are due to leverage, and this letting someone else win on leverage. And it’s not like there’s protection on market declines either.
I guess they figure if people are foolish enough to pay these prices they are foolish enough to take that deal.
Ourboro – for those who can’t get enough cash from the bank of Mom. More liquidity to keep the real estate balloon well inflated.
Another Wework?
Hi Garth, The ourboros as reptile analogy is effective to show their villainous intent, but the velocirapter as reptile analogy is totally inappropriate and outdated. For the past few decades, paleontologists have proven pretty conclusively that dinosaurs including velociraptors were in fact the ancestors and close relatives of birds. Dinosaurs were in fact warm-blooded, and were “birds with teeth”. Please see Robert Bakker’s 1986 book The Dinosaur Heresies, countless journal articles, and all the Jurassic Park movies also mentioned that Dinosaurs were really the first birds.
#54 oops on 06.06.21 at 8:05 pm
#51 Nonplused
Consider another hobby
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Why? This one is so much fun!
And I made you look. As 2030 approaches they idea will be there in your mind and at some point you will “red pill”. The cost of energy will just keep going up and up, and all the wind turbines they can build won’t seem to do anything about it.
https://www.youtube.com/watch?v=o94prWTuBIs
Particularly note that no matter how many wind turbines they build they need to have gas generation on standby and that costs a lot.
“My cousins in Italy own nothing and are happy. Work part time if they’re lucky and hit the beach daily with a morning espresso at the local bar. That’s the life. Not this life here in Canada of debt and 9 months cold winters. I don’t even hear of them having any medical issues unlike here where our hospitals are crammed of chronic sick people.”
Joey I am 2nd generation Italian and if you think that is the life of being a beach bum go for it. That is why Europe will slowly die under those conditions.
Garth, thanks as always with your common sense blogs.
Here is my story:
First house we bought in 1989 for $230k it went up to $270k in 1992 we could have sold it for $180k.
It took 9 years for us to sell it for $240k.
Give it time.
This market is similar to that time, except our governments don’t care because its money for them.
Agents have learned how to become crafty and down right thieves.
Ask the 28 year old agent driving the tesla if you don’t believe me.
In the end we need shelter, don’t rely on the government.
Garth is right ask your family to help.
Learn from other cultures.
Don’t follow your neighbors.
And its not what you make ,its what you do with it!
@73 Nonplussed;
Found it! Jevons’ Paradox:
https://en.wikipedia.org/wiki/Jevons_paradox
I keep harping on ‘reduce energy use’ because, we are programmed to consume.
Jevon’s Paradox says (my words) “make it more efficient, usage increases”
The Psychology PhD’s where I worked mentioned this to me – e.g.
– LED bulbs are more efficient, so no worries if lights are left on;
– Cars get more efficient, so, buy a bigger car – same gas costs;
– houses get more energy efficient, so build a bigger house.
– roads clogged, widen/build more to reduce clogging, increase car use and roads get clogged.
Interesting ramifications for “climate change” or “net zero” or whatever it is called this month.
How does this remain a principle residence and not a shared investment property? What are the tax implications?
#44 Keith on 06.05.21 at 3:13 pm
Trudeau has expressed “disappointment” in the Catholic Church during the same week the Finance Minister Freeland has expressed “disappointment” in the executive of Air Canada over bonuses paid while on the government dole. This is what leadership by a substitute teacher sounds like. I have to confess, I’m disappointed.
_________
Air Canada executives to return bonuses:
https://www.bnnbloomberg.ca/air-canada-says-senior-executives-to-voluntarily-return-2020-bonuses-1.1613591
So putting pressure on Air Canada worked and let’s be serious about the influence the Canadian gov’t has over the Catholic church.
Not sure what you thought the Liberal response to both situations should be. I think both were appropriate and in the only case they could influence achieved the desired result.
This scheme feels like it’s made to fast-track immigrants into the Canadian middle class life. Follow the money. Someone is hiding behind it, trying to stack the deck.
#64 AHMED ISSA on 06.06.21 at 10:29 pm
i see alot of negative comments on ourboro,yet there is a positive spin for the borrower.ist you get to use their money for free,no interest for 10yrs while you pay for what you borrowed from the banks,plus maintenance and utilities, sounds fair to me. if you are smarter and just sold your house and pocketed 600,000 net,why not borrow from from ourboro and pay cash for your digs and worry about maintenace,taxes and utilities for the next 10 years and save yourself abundle
——- —
No offence dude, but you are *exactly* the kind of customer they’re looking for…
Oh, this is nothing new.
It’s been happening for decades and decades.
It’s called La Cosa Nostra. This Thing of Ours.
Y’know – the Mob.
The MAFIA.
Sure….we’ll help you out. We’ll be your partner. No strings.
Then, one day…Badda BOOM Badda BING!
Ohhhhhh!
https://www.youtube.com/watch?v=ZPtjyqgZAUk
#75 Another Deckchair on 06.07.21 at 6:26 am
– LED bulbs are more efficient, so no worries if lights are left on;
———
During big game season, we always leave an LED light on in the tipi for the evening hunt. Nothing better than trudging home through the snow to a glowing beacon of comfort.
The camp battery bank of 2 golf cart batteries could, by amp capacity, run the lights for 249 days 24/7. Storage has become a nonissue. Solar trickle charge makes the camp self-sufficient although we self-restrict to one movie per night.
Its not genocide its ………
“A restructuring of the balance in the population ..”
https://www.reuters.com/world/china/exclusive-amid-accusations-genocide-west-china-polices-could-cut-millions-uyghur-2021-06-07/
#67 yvr_lurker on 06.06.21 at 11:34 pm
No sane person would enter into an agreement of this sort, having two Goliaths to contend with (the bank and
Ourboro). For the final disposition of the property the Ourboro clan will be the judge and jury; you can imagine if the market is down and the sale price not to their liking, they will enforce some punitive and likely bogus penalty on the owners (property was not maintained to a high enough level, yada, yada….).
HA! It would be like trying to settle a claim with an insurance company.
#79 IHCTD9 on 06.07.21 at 9:34 am
#64 AHMED ISSA on 06.06.21 at 10:29 pm
i see alot of negative comments on ourboro,yet there is a positive spin for the borrower.ist you get to use their money for free,no interest for 10yrs while you pay for what you borrowed from the banks,plus maintenance and utilities, sounds fair to me. if you are smarter and just sold your house and pocketed 600,000 net,why not borrow from from ourboro and pay cash for your digs and worry about maintenace,taxes and utilities for the next 10 years and save yourself abundle
——- —
No offence dude, but you are *exactly* the kind of customer they’re looking for…
///////////////
What if ten years went by and there was no price appreciation. You would have received an interest free loan.
#75 Another Deckchair on 06.07.21 at 6:26 am
@73 Nonplussed;
Found it! Jevons’ Paradox:
https://en.wikipedia.org/wiki/Jevons_paradox
I keep harping on ‘reduce energy use’ because, we are programmed to consume.
________________________
Same paradox as living check to check on an income above average.
#85 DavidW2 on 06.06.21 at 7:42 pm
Great post. I only wish I invested more and went all in – now sitting on too much cash. Any new great insights?
———-
Patience. All things come to he who waits. Track, wait, watch.
#65 TurnerNation on 06.06.21 at 10:47 pm
How did we get here? Perhaps of interest to Yellow Tractor Guy. Kanada from the eyes of fed-up immigrants:
https://trappedincanada.home.blog/2020/04/13/do-you-regret-moving-to-canada/
““ The culture is very much rooted in all the trappings of left-wing ideology. You are taught from a very young age to look at wealth and upward mobility with suspicion. There’s a general mentality of victimhood and entitlement. If you’re not successful it must be the fault of corporations or rich people. The gov’t is supposed to solve all your problems. I find this to be very demoralizing and depressing.”
—— —- –
…and it is a 100% chance things are much worse for newcomers today under Trudeau’s bumbling leadership, than it has ever been in the history of Canada.
Today, a house in any urban area in the country is completely, and thoroughly out of reach. Add that to having your foreign work experience and education made null, the cold climate, the overbearing government, the high taxation, and the super high cost of living. Obtaining a decent standard of living in Canada today is like trying to win the 6/49.
I have to assume that today’s newcomers just plain don’t understand what they’re getting in to. Someone somewhere has sold them a bill of goods, and it’s going to take a good 10 years of beating their heads against the wall before they come to grips with the facts.
That’s not even getting into the repercussions yet to come thanks to Trudeau’s inability to stop throwing money around like confetti, and putting a bunch of activist dreamers in charge of running the country.
Pretty much zero bright-eyed and bushy-tailed immigrants who show up in Canada tomorrow will ever manage the prosperity my parents and grandparents did decades ago after coming here. A giant chunk of them will become asset-less tax slaves renting a leaky condo in a soulless concrete jungle – completely unable to progress from there. That, or do like many on that blog did, and head back home…
Thanks for the link.
#76 Phylis on 06.07.21 at 7:12 am
How does this remain a principle residence and not a shared investment property? What are the tax implications?
—- –
That’s a damn good question. Obviously ourboro would have to pay taxes of some kind – but what about the home owners?
#77 Love_The_Cottage on 06.07.21 at 7:58 am
#44 Keith on 06.05.21 at 3:13 pm
Trudeau has expressed “disappointment” in the Catholic Church during the same week the Finance Minister Freeland has expressed “disappointment” in the executive of Air Canada over bonuses paid while on the government dole. This is what leadership by a substitute teacher sounds like. I have to confess, I’m disappointed.
_________
Air Canada executives to return bonuses:
https://www.bnnbloomberg.ca/air-canada-says-senior-executives-to-voluntarily-return-2020-bonuses-1.1613591
So putting pressure on Air Canada worked and let’s be serious about the influence the Canadian gov’t has over the Catholic church.
Not sure what you thought the Liberal response to both situations should be. I think both were appropriate and in the only case they could influence achieved the desired result
#79 IHCTD9 on 06.07.21 at 9:34 am
——- —
No offence dude, but you are *exactly* the kind of customer the Liberals are looking for…
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
I think repurposing IHCTD9’s response works great here.
Ourboro
this is where the provinces should get busy to regulate schemes like Ourboro. How about
“future equity is determined as a percentage of the initial contribution” For instance if Ourboro puts up $200,000 towards the down payment, future equity is calculated as a percentage of $200,000 – if the house doubles in price over 10 years, Ourboro’s equity is $400,000.
it’s not that hard
61 IHCTD9 – I tried a little calculation based on:
$1.25M purchase price
$250k down split with ourboro
leaves $1m mortgage.
I used 4.5% interest over ten years leaving a $725k balance owing. Can someone verify?
Let’s say sale price of $1.5M – $250k cap gain.
“The proceeds will first be used to pay back anything owed to lenders, followed by any third parties as part of closing transaction costs.”
Ignoring transaction costs, leaves $775k.
“Next, the total amount of the principal payments you have made towards your mortgage will be returned to you.”
So you get $275k back leaving $500k.
“Lastly, all remaining proceeds will be divided based on
our respective equity percentages in the home.”
So the down was split, leaving $250k, so “owner” leaves with $525k total.
If “owner” had all or original DP, they would walk with
$775.
So option 1 (with ourboro)
$125k investment, $525 future value – 320% return
Option 2 – full DP
$250k investment, $775k future value – 210% return.
[email protected] notes that you now have partner in the leverage. The original mortgage amount is always repaid, split between the bank and the “owner”.
have I missed anything?
So option 1 (with ourboro)
$125k investment, $525 future value – 320% return
Option 2 – full DP
$250k investment, $775k future value – 210% return.
[email protected] notes that you now have partner in the leverage. The original mortgage amount is always repaid, split between the bank and the “owner”.
have I missed anything?
////
Yes.
You are forgetting that the $275,000 in principle repayment was all you in both scenarios, so lets take that out of the equation.
option 1- 125,000 deposit and return of 250,000. 100% return
option 2- 250,000 deposit and return of 500,000. still 100% return
#87 IHCTD9 on 06.07.21 at 11:03 am
Thanks for the link.
////////////////////////////////////////////////////////////
That blog is hilarious and as a second-generation Canadian, there’s some valid points being made. We ultimately have no culture apart from American and some Québécois things, now with T2 making all our existing issues worse.
The bit on Vancouver being ‘Gotham’ is chef’s kiss.
And I learned a new word today: “cakers”.
92 penny – Ah thats better. So it looks like what this deal does is just lower the DP and splits the leverage and return accordingly.
Someone mentioned Mafia…
Good point. Who’ll “regulate” that Ourboro’s funding partners won’t be the really flush illicit drug-trade guys, and/or the Mafia?
Protect your knees…
#91 Dr V on 06.07.21 at 12:22 pm
61 IHCTD9 – I tried a little calculation based on:
———-
I like “numberless math” on this one:
“The proceeds will first be used to pay back anything owed to lenders, followed by any third parties as part of closing transaction costs.”
This is the same as selling any house, co-owner or not. The only difference is the interest rate and the “closing transaction costs” I bet they’re high.
“Next, the total amount of the principal payments you have made towards your mortgage will be returned to you.”
This is the same as anyone selling a house that appreciated. But it sounds like a feature doesn’t it?
“Lastly, all remaining proceeds will be divided based on
our respective equity percentages in the home.”
The remaining proceeds are what’s left of the capital gain after being soaked for the “closing transaction costs”. Ourboro would get 50% of these if the dp was a 50/50 split. Horrifying.
In the end, Ourboro slaps in say 50% of 5-10% of the original home value, gets mortgage interest out of the deal, and a bunch of fees, plus 50% of whatever’s left over on top.
The homeowner gets 10 years of mortgage payments back, that’s a net zero. They’re out interest costs, fees, COO, and half the capital gain. They’re like property managers paying all the costs and doing all the work for half the pie.
Yes if the place appreciates, the owners will walk away with some cash – just like any other homeowner. The difference is Ourboro clients will walk away with a lot less. All for a measly 2.5% of the value of the home. Whatever they walk away with, the number sucks.
Seems to me it’s a no brainer to give the BMAD a call for the cash instead, much less toothy.
now, not only houses are financial assets, but also derivatives binding on house prices are created. Willow, Ourboro, what’s coming next? I remember there was something called “Credit Swap Default” in 2007-08… not good, actually, scary!
Human nature, Kanadians really lost their minds. Where are regulations from all kinds of governments?
So how Is housing falling when you don’t have enough units in the first place. And isn’t it your bias to pump up stock. No Commission
in gold, housing, silver etc.
Time for Max Kiazer
To make 1000,00 per/month clear. What amt do you need, to get that in dividend stocks
RE: return to downtown TO office tower work
Been there bled my time on that: no thanks. I had enough of the bloody 3 hour a day commute to work and home smelling everybody’s arm pits on the bus, subway and streetcar. What hell it was to live and work in Toronto! Of coarse people want WFH! Why waste your life on getting to work and back when work is just as well done a few steps from the fridge?