Let me state right up front, I am guilty of being a skilled “high pressure” salesman! You don’t get labeled the “King Cobra” (in the land of snakes) for nothing.
In my prime I could literally sell you a condo that you didn’t want to buy. That’s actually what I became successful for, selling condos in good markets where people lined up to buy and in bad markets like 1989 when the real estate market in Toronto crashed.
Amidst the crash, I continued selling unit for Minto Developments, at their pre-construction site “Minto Plaza” on Toronto’s Bay Corridor after they started construction of a hotel condo only to be slapped with an injection to cease and desist as the hotel next door had restrictive rights over anyone building a hotel on that site.
So I was left to sell hotel suites as condo homes and/or investment units. Minto had priced them in the $400 per square foot range, confident that the finishes and amenities would justify this leap in price.
They came looking for the big closer and I managed to sell their units only after having them renumber the entire suite count stripping away all #4’s, as I realized that this was a Chinese buy with Toronto’s Chinatown just a couple blocks away yet still on the Bay Street Corridor leading to the nation’s number one financial distric.
I’m stating this all for the record to help buyers understand that when it comes to the condo game in Toronto, you are not playing on a level playing field.
And, all things being equal, that’s fair from the developer’s perspective as their goals are to ring out as much money from every development that they do as possible.
I’ve fought for developers for decades and then introduce Buyer Agency to Toronto when I “went clean and stopped beating up consumers into deals that they many times didn’t want to or shouldn’t be getting into“.
Despite another decade or so of success as a buyer’s agent it has become abundantly clear to me that there really is nothing that I can do to protect the consumer.
The entire game is ridiculous especially when people come to me looking for either a home or an investment and I’m left with the burden of either dealing with them ethically and telling them all about the mine field that is Condo Land, or doing what most Realtors unfortunately are forced into doing which is to just play along.
If you’ve followed my earlier blog simplycondos.com you will already know that my choice was made years back when I saw the market tipping at the break point back in or around 2012/13.
I’ve never been able to sell anything that I haven’t been able to believe in and quite frankly, the Toronto condo market has proven to be something that I no longer believe in.
It is actually a bad joke and something that I personally am not interested in making a living in any longer.
I infrequently still attend those phoney VIP Broker Events just to see what is going on in a market that’s day has come.
In my blog yesterday I outlined a formula that any rational investor should go through and if they do that and come up with a different conclusion I would like to hear it.
The math simply doesn’t work. “Too much product in the pipe adding to too many remaining ‘shadow inventory unsold units’ in recently completed buildings’ all sold requiring acceptance of “negative cash flow” (based on artificially low mortgage interest rates) due to unjustifiably high and artificial prices.
Add to that the sub-standard quality of units in buildings that are destined to be rental apartment buildings and you can quickly see, if you are someone legitimately looking for a home, your best outcome is buying into a rental building!
I was using the gym in our condo this morning and noticed a sign informing residents that the heating/cooling system would be changed to heat in the next few days, while temperatures have hit one degree over night.
I have a townhouse with it’s own independent heating and air conditioning and I wouldn’t think of living without the luxury of having my own climate control.
The building has a couple large (4,300 square foot) penthouses on mls right now priced at over $3 Million and I can’t help but wonder what is going on the head of any prospective buyer when buying into a building that is about 80% renter occupied!
I’m not someone who would be comfortable waiting for elevators. I’ve given up on that concept especially when developers are allowed to force buyers into living with elevators clad in plywood and covered with construction worker graffiti, for up to a year!
Highrise condo living has proven such a disappointment to me, that I am no longer interested in playing the game at all!
I’ve learned from meeting with lots of Realtors at these VIP Events that many “admire me for publishing ‘the truth’ for all these years”!
They follow this up with expressing regret that they can’t as “they have a family and must earn their living“.
I find that to be extremely sad!
That’s why I’ve redirected my career to producing meaningful educational material for Realtors to be able to professionalize!
You’ve got to take pride in what you do or making money simply is not worth it! Pimps make money but who wants to make money like that!
I’m known as a great salesman but I couldn’t sell anything if I didn’t absolutely believe in it!
That’s the difference between me and a con artist. We all use many of the same tactics, strategies and tricks of the trade.
The difference always rests with “intent“. If your intentions are to “help” me achieve something that I am trying to do, like buy a home, your professional “skill-set” is warranted to help me form my buying conclusions.
If your intentions are to grab a commission, then with all due respect, you are conning your client!
When condos bounced back ten years after the crash, I was there with my website simplycondos.com, and cleaned up during the boom.
In 2000 condos were running at just over $325 per square foot (that’s what I bought into Hudson with another 47 global clients at).
Within a decade prices skyrocketed to $700 per square foot while rental incomes remained at about the same or decreased modestly. That’s what I’m talking about when I say “the math just doesn’t work“.
Today Toronto condos are just over $800 per square foot (the math still doesn’t work – read yesterday’s blog).
I don’t know when the bubble breaks! As long as our government continues to use tax payer dollars to absorb deficits by paying down mortgage interest rates, so this “illusion of economic stability” being born on the shoulders of consumers, I guess it can go on in perpetuity.
But what about money losing investments don’t you get?
Canada Revenue Agency has awakened to the financial windfall of collecting unpaid income taxes on condo “flips”.
In 2000 “Assignments” were considered “illegal”! By 2005 or 2006 a common place incentive in pre-construction condos in Toronto was for the developer to give all buyers a “FREE Right To Assign”.
Now if you can sell your condo before it ever registers, there is no official paper trail thus very low incentive for someone to report that income on their income tax filing right?
One big city broker turned developer too, was just caught making his sales representatives buy his unit to “flip” so he could achieve his sales ratio required by his construction lenders to move forward.
After almost then years of these Assignments being introduced as a new marketing concept, Canada Revenue Agency has started, with a vengeance, chasing down these tax-dodgers.
The Internet if full of horror stories over the aggressive approach CRA has taken.
The bottom line is you have to pay your taxes.
I have never Assigned a unit of my own, as I buy as long term holds but unfortunately everything that I’ve purchased but one has been so disappointing to me that I’ve sold the majority of the income units that I held.
I’ve had clients assign units and I’ve always gone to lengths to emphasize that they must pay tax on the upside return recommending that they talk with an accountant.
I’ve been told that CRA has simply required all developers to open up their files which opens up the channels to all original purchasers and assignors/assignees.
If you are thinking of investing in a Toronto condo, or know someone who is, I would recommend that you have them visit simplycharles.com and check out the icons at the bottom of their screen (Toronto Life “Faulty Towers”, CBC Condo Game, CBC Marketplace “Condo Crunch”), as well as my Blog.
If you are a buyer looking for a legitimate home, there are a very few quality buildings that I would be happy to share with you prior to you jumping into this rigged game.
I’m Charles
