HawthorneVillager.com

That's not a business, that's leaching off of someone else's business and depriving buyers who actually want to live there an opportunity to buy their home at its original price. House flippers are just self-entitled douches who caused part of this housing mess.

House flippers have to sell to somebody don't they?
If there was no future demand there would not be any flippers (rational ones at least).
They drive demand short term, and provide supply longer term.
If they do this improperly(low future demand) they will suffer the consequences.

_________________
Jezu Ufam Tobie

Crux sacra sit mihi lux! Non draco sit mihi dux!

They would bat an eye if interest rates doubled or tripled. How does 6 or 7 k monthly payment sound?
Anybody remember the early 90s? How about late 70s/early 80s? Or have most of us never experienced that?

High inflation(and interest rates) is not likely at this point, but people should be aware of the risk they are taking.
sh*t happens over a long period like 25 or more years.

By the way, a large chunk of the current housing prices is based on low interest rates over the last decade+.
Rates go up, price drops.

_________________
Jezu Ufam Tobie

Crux sacra sit mihi lux! Non draco sit mihi dux!

I'm old enough to remember, We renewed at 18%, the guy across the road a short time later was hit with 19% then a few months later his wife walked out on him so when rates go through roof you can lose a lot more than money. BTW we survived.

_________________

[/quote] Not to sound like Garth "Prepper" Turner, but the one thing that I believe WILL eventually cause this to crumble is that more and more people are becoming de-sensitized to being in debt, MASSIVE debt, as posted earlier. I love the general concepts of free enterprise, and understand well that it is key to the success of our economy. However, seeing more and more people stilt themselves up based on theoretically perpetually upward-sloping lines on a realtor's chart seems to me to be absolute lunacy. It defies logic, that there can be no limits.[/quote]

We are one of those "de-sensitized". Sold the house in May, downsized to an 1100 sqft condo in a nice area in Etobicoke and we are now mortgage free + had some money left for investing. We couldn't be happier. The house, the stuff you fill your huge house with, the mortgage and the commute weighs you down. You start feeling it when living in it but you truly feel how heavy it was when you get rid of it. It was hard to say goodbye to our gorgeous detached on a premium lot but it was 3 times bigger than what we need and I couldn't bear the fact that if one of us was out of job we wouldn't have been able to keep paying our expenses (car loans, mortgage, utilities, insurance, cable, etc). We are in our 40's so far from retirement and we choose to work, but technically, we can do whatever and freedom really feels good. I wish more families could realize that quality time is not tied to a 3000 sqft house or a big a$$ car. It's tied to the time a family can spend together, the time we spend on caring for our health and well-being, surrounded by friends, family and the community. I'd love to see a day when people realize that they are barely spending time at home (due to hockey practice, long commute, extra work) or if they spend time at home everybody is at a different corner of the big house, rarely connecting with each other. I'm not bashing on people with big houses since we all make our choices. People thought we were freakin' crazy to downsize and move to a condo. If you can afford the big house and the 2 SUV-s without too much sacrifice (like overtiming to keep your job, having a nice safety money in the bank account in case of a health issue or whatever) then it's fine. I just wanted enlighten people who have all these because "that's the norm" but they do worry all the time about their financials or not having a safety net. If you feel the "stuff" weighs you down, just take a deep breadth and make the change. Know your priorities. Btw, on the "equity in the house" and the "asset": it's like owning a stock. If you are only rich on paper and you are valuing your wealth on paper it's a slippery slope. It happened to us prior to this Milton house that the house prices were steadily increasing, then we bought the Milton house in January 2009 and wanted to sell the existing one. Guess what, the market turned really quickly. So this time we cashed in on the Milton house while the market was strong: we got 3 offers and sold $15K over asking. Ever since, I see comparables in our old neighborhood, all selling $30-40K below and stay on the market for 2-3 months. Apologies for the long post

Except Canada has no future. This is a ponzi scheme. The country manufactures nothing, has shipped all manufacturing jobs to China and India and the only reason people are buying these homes is that they now allow any foreigner in if they bring enough cash. 15 years ago it didn't matter how much money one had, if there wasn't a need for you, you weren't allowed in. 15-20 years ago it was unheard of to see someone who didn't speak a word of English to be driving brand new cars and owning a house, because they came here with nothing and worked factory jobs day and night. Today, the government has people brainwashed to think foreigners come here to leach off social services and OHIP, while in reality it's the opposite, but what's going to happen when it's no longer advantageous for them to move here? Who will be at the bottom of this housing pyramid scheme? The government doesn't particularly care because they'll be long retired by the time it unravels and home buyers don't care because they just want a piece of all of this before it ends.

TOTALLY agree. I've said it before and I'll say it again... Scotiabank is very sly with it's marketing, because contrary to the message they are sending out there, none of us are actually "Richer than we think".

btimmis, your last line nailed it. The mortgage arm of the banks are lenders that profit off what they lend, and how long they lend it for. The longer you're in debt, the more they make. They are not financial advisors, which is a tough grey area to navigate especially when the same company is also advertising the services of helping us invest and plan for our future financial well being. Sadly, this is one of the pressures widening the gap between the economic classes.

Sorry to get off topic slightly...

Not to sound like Garth "Prepper" Turner, but the one thing that I believe WILL eventually cause this to crumble is that more and more people are becoming de-sensitized to being in debt, MASSIVE debt, as posted earlier. I love the general concepts of free enterprise, and understand well that it is key to the success of our economy. However, seeing more and more people stilt themselves up based on theoretically perpetually upward-sloping lines on a realtor's chart seems to me to be absolute lunacy. It defies logic, that there can be no limits.[/quote]

We are one of those "de-sensitized". Sold the house in May, downsized to an 1100 sqft condo in a nice area in Etobicoke and we are now mortgage free + had some money left for investing. We couldn't be happier. The house, the stuff you fill your huge house with, the mortgage and the commute weighs you down. You start feeling it when living in it but you truly feel how heavy it was when you get rid of it. It was hard to say goodbye to our gorgeous detached on a premium lot but it was 3 times bigger than what we need and I couldn't bear the fact that if one of us was out of job we wouldn't have been able to keep paying our expenses (car loans, mortgage, utilities, insurance, cable, etc). We are in our 40's so far from retirement and we choose to work, but technically, we can do whatever and freedom really feels good. I wish more families could realize that quality time is not tied to a 3000 sqft house or a big a$$ car. It's tied to the time a family can spend together, the time we spend on caring for our health and well-being, surrounded by friends, family and the community. I'd love to see a day when people realize that they are barely spending time at home (due to hockey practice, long commute, extra work) or if they spend time at home everybody is at a different corner of the big house, rarely connecting with each other. I'm not bashing on people with big houses since we all make our choices. People thought we were freakin' crazy to downsize and move to a condo. If you can afford the big house and the 2 SUV-s without too much sacrifice (like overtiming to keep your job, having a nice safety money in the bank account in case of a health issue or whatever) then it's fine. I just wanted enlighten people who have all these because "that's the norm" but they do worry all the time about their financials or not having a safety net. If you feel the "stuff" weighs you down, just take a deep breadth and make the change. Know your priorities. Btw, on the "equity in the house" and the "asset": it's like owning a stock. If you are only rich on paper and you are valuing your wealth on paper it's a slippery slope. It happened to us prior to this Milton house that the house prices were steadily increasing, then we bought the Milton house in January 2009 and wanted to sell the existing one. Guess what, the market turned really quickly. So this time we cashed in on the Milton house while the market was strong: we got 3 offers and sold $15K over asking. Ever since, I see comparables in our old neighborhood, all selling $30-40K below and stay on the market for 2-3 months. Apologies for the long post [/quote]

Your strategy as explained is very sound. What you didn't say was whether or not you have kids because an 1100 Sq. ft. condo can be a little confined. Instead of having residents in every corner of the 3000' house, you now have them on top of each other which creates a lack of privacy. If you don't have kids and you're in your 40s, then yes, this is the ideal scenario.

The gov't is actually in a catch 22 situation. Interest rates should be rising but you can imagine what damage it would inflict on the economy in general. Mortgages on housing, car loans, HELOCS and other interest sensitive consumer transactions would be negatively affected. Our economy is not strong enough to sustain such increased costs that could not be absorbed by wage increases such as was the of 10% or more wage gains that was seen in the '70s or '80s. So the traditional use of increasing interest rates to slow down a raging housing market is no longer an option unless one wants to further slow down an economy that has not recovered from the abyss of 2008. So low interest rates could be around forever and housing prices would keep rising. There is a difference in marketing techniques between the US and Canada which is probably another reason why house pricing is kept low. In the US many house builders build on spec ie unsold inventory. So in an economic downturn, it is the builder who absorbs the loss of market value. In Canada, ever since the housing bubble in the '80s, builders only build homes once they are sold, so the market is not affected as much by unsold builder inventories.

Our manufacturing is down, however we are blessed with tons of natural resources, especially oil and gas.
That is what allowed us to prosper better than US and Europe over the last several years.
The US is now having an energy boom as well.

_________________
Jezu Ufam Tobie

Crux sacra sit mihi lux! Non draco sit mihi dux!

Yea, about that... Canada is shutting down their refineries one after the other and opening them back up in Pakistan so we can buy our own gas back.

Free enterprise is a profit and loss system, whoever chooses to participate have better accept the loss part as well as profit -
You better understand what you are doing when buying house for 900k that used to cost 450k 5 years ago.

Refreshing to see people thinking for themselves, and not following the heard mentality.
Over-consumption is vacuous and unfulfilling, frequently to the detriment to those practicing it(financial, health, etc).
The size of an average house over the last 50-60 years have doubled while the size of families living in it have shrunk significantly.

_________________
Jezu Ufam Tobie

Crux sacra sit mihi lux! Non draco sit mihi dux!

That will be the look on my face after my 12th successful new house flip this fall.

The 4 year old deline thread is this way -> http://www.hawthornevillager.com/phpbb/viewtopic.php?f=1&t=29572

Really? and you're still making that much money on it?

Are you paying the full HST as these are not your primary residence?
Are you claiming Capital Gains on these new house flips?
What about Real Estate Agent Commission? or are you an Agent? If so are you claiming this commission on your income tax?
What about legal fees? closing costs? Land Tranfer Tax?
Borrowing fees/interest for the hefty deposits?

These days, I just don't see how you can make much money on house flipping (new or old/renos) with all the taxes and fees if you do it all legit.

prowdowner will have the taxman knocking soon. you're not allowed to just flip a home. the whole must live in it for 2 years is a myth. if you bought it and sold it soon after (even up to 5 years) expect a knock on the door and have the money ready.