Five Condos (Graywood Developments, Mod Developments) - Real Estate -

Ric said:
In that case, we all should go out and buy because house/condos always rise in the long run.

The "smart money" buys low (or close to the mean) and sells high (outskirts of trend line close to bubble territory) while the heard buys at the top of the market (bubble territory)

If your buying a home to live in and don't plan on moving for awhile then by all means buy now.( Even if prices drop and your moving, the place ur moving to would also have declined so it's kind of a wash). If your buying on speculation that your $500-$800/sq.ft condo will worth $700-$1000/sq.ft in 3 yrs good luck.
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IMO if you have the money then by all means you should do the research and buy condos/houses. The problem with these investment are the money is locked for awhile. Of course there is risk involved in real estate. Why do you think FIVE is not a 'smart buy'? We are getting at rate lower than completive in the area/reliable builder/great amenities /unique design. I don't see the logic in your argument for buying to live and buying to invest. If you are guaranteed to be able to rent the condo then they are both the same. Note: I can sell the unit right now for +$25K easily which is approximately +$50psf. If you are predicting price would dip to $400psf good luck!
 
T.O.Condo said:
IMO if you have the money then by all means you should do the research and buy condos/houses. The problem with these investment are the money is locked for awhile. Of course there is risk involved in real estate. Why do you think FIVE is not a 'smart buy'? We are getting at rate lower than completive in the area/reliable builder/great amenities /unique design. I don't see the logic in your argument for buying to live and buying to invest. If you are guaranteed to be able to rent the condo then they are both the same. Note: I can sell the unit right now for +$25K easily which is approximately +$50psf. If you are predicting price would dip to $400psf good luck!
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At no point did I say that Five wasn't a "smart buy". My comments are general to downtown toronto pre-construction condo prices. The argument of buying to live vs. buying to invest is quite simple. If you're buying to live then the normal up and down movements in prices shouldn't matter as you should have a long term view and prices "always" go up long term (as you said earlier). If you 're buying to invest by flipping, then your time-frame is shorter. You're gambling that in 3-4 years your condo would have appreciated enough to cover all ur costs and come out with a profit. But what happens if prices are stagnant or fall over the next 4 years? Your next option is to rent the property out. But, that only make sense if your revenue from rental will cover all your costs (thus the reason I keep saying that +ve cash flow is paramount). As it is today, most (if not all) downtown pre-contruction condos will not provide a +ve cash flow when rented if prices are above $450-$500/sq.ft.(based on 20% downpayment on 5 yr fixed loan). The unit you bought at 5, how much can you rent it for based on similar type units in the area? Can the rent cover all your projected expenses, if you cannot flip it in 4 yrs and have to rent it out?

You haven't made any profit until you have sold the property and the money is in the bank, so don't tell me about paper $25K profit.

I never predicted prices dropping to $400psf either.

So as not to prolong this debate, let me try and reiterate my point. If your an "investor" looking to buy pre-construction condo anywhere, with the hope of flipping in a couple of years, make sure ur investment can generate a +ve cash flow if your forced to rent due to a downturn in the market.
 
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By the way, as a Realtor, shouldn't I be the one telling you all to go out and buy because all is well and prices always go up. If I advice to buy; I get bashed. If I say be prudent and choose wisely, I also get bashed. Darn, can't win.
 
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Ric said:
At no point did I say that Five wasn't a "smart buy". My comments are general to downtown toronto pre-construction condo prices. The argument of buying to live or buying to invest is quite simple. If your buying to live then the normal up and down movements in prices shouldn't matter as you should have a long term view and prices always go up long term (as you said earlier). If your buying to invest by flipping, then your time-frame is shorter. Your gambling that in 3-4 years your condo would have appreciated enough to cover all ur costs and come out with a profit. But what happens if prices are stagnant or fall over the next 4 years? Your next option is to rent the property out. But, that only make sense if your revenue from rental will cover all your costs (thus the reason I keep saying that +ve cash flow is paramount). As it is today, most (if not all) downtown pre-contruction condos will not provide a +ve cash flow when rented if prices are above $450-$500/sq.ft.(based on 20% downpayment on 5 yr fixed loan). The unit you bought at 5, how much can you rent it for based on similar type units in the area? Can the rent cover all your projected expenses, if you cannot flip it in 4 yrs and have to rent it out?

You haven't made any profit until you have sold the property and the money is in the bank, so don't tell me about paper $25K profit.

I never predicted prices dropping to $400psf either.

So as not to prolong this debate, let me try and reiterate my point. If your an "investor" looking to buy pre-construction condo anywhere, with the hope of flipping in a couple of years, make sure ur investment can generate a +ve cash flow if your forced to rent due to a downturn in the market.
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Ric said:
By the way, as a Realtor, shouldn't I be the one telling you all to go out and buy because all is well and prices always go up. If I advice to buy I get bashed. If I say be prudent and choose wisely, I also get bashed. Darn, can't win.
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It's refreshing to hear an unbiased, thoughtful and logical analysis from a realtor besides the "it's always a good time to buy"

The numbers currently don't make much sense from a cashflow perspective, but many 'investors' (ie speculators) have seen unprecedented appreciation for the past decade and have come to expect it. Some who feel they missed the boat, continue to jump on board.

The funny thing about this debate/opinion, even BJL was quoted in a Toronto Life article stating that some parts of TO are inflated in his opinion and pre-construction prices of $600 PSF are getting ahead of themselves getting into bubble territory.
 
Ric said:
By the way, as a Realtor, shouldn't I be the one telling you all to go out and buy because all is well and prices always go up. If I advice to buy I get bashed. If I say be prudent and choose wisely, I also get bashed. Darn, can't win.
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Hey, I agree with everything you've been saying. Anything over $500PSF for investment is really pushing it IMO. Everyone buying pre construction should be buying to live in.
 
Ric said:
In that case, we all should go out and buy because house/condos always rise in the long run.

The "smart money" buys low (or close to the mean) and sells high (outskirts of trend line close to bubble territory) while the heard buys at the top of the market (bubble territory)

If your buying a home to live in and don't plan on moving for awhile then by all means buy now.( Even if prices drop and your moving, the place ur moving to would also have declined so it's kind of a wash). If your buying on speculation that your $500-$800/sq.ft condo will worth $700-$1000/sq.ft in 3 yrs good luck.
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I agree with Ric on this. I just hope for the rest of us that there are not alot of people just barely covering their mortgage at today's rates counting on a quick flip because that is the single biggest risk to the market in my estimation. Number 2 would be that the so called "international investor" decides another location makes more sense for their money. I think one has to remember that wonderful thing called "affordability" and while in the short term it may be reasonable to exceed it, it cannot be a long term strategy as surely eventually you will be caught off-side.
 
t.o said:
When is the public grand opening for the Five Condos?
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It's starting from Saturday June 19th. They got few model I and VI on a high floors around 340k (25k more than the original VIP price) and are giving preference to their VIP Realtors first.

To all those who couldn't get a 1 br unit here now is your chance to get one (still a good choice even though it's 25k more) or move on to the next project Chaz on Charles which is next to Casa condominium and One Bloor.

We are expected to get the floor plans and price list from the developer sometimes this week and will be more than happy to share it here. Prices of Chaz on Charles will start from low 200s and are expected to be somewhere around 625/sq.ft. It will be a good one.
 
Sunny Batra said:
It's starting from Saturday June 19th. They got few model I and VI on a high floors around 340k (25k more than the original VIP price) and are giving preference to their VIP Realtors first.

To all those who couldn't get a 1 br unit here now is your chance to get one (still a good choice even though it's 25k more) or move on to the next project Chaz on Charles which is next to Casa condominium and One Bloor.

We are expected to get the floor plans and price list from the developer sometimes this week and will be more than happy to share it here. Prices of Chaz on Charles will start from low 200s and are expected to be somewhere around 625/sq.ft. It will be a good one.
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LOL ... the consumate saleman to the end .....
 
cdr108 said:
LOL ... the consumate saleman to the end .....
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It is interesting to contrast Ric's and Sunny's views. I believe Ric is correct.

Everything I read is that the market is slowing down and rapidly so. There is now 6 months inventory from less than 3 months 3months ago. Sales are dropping. Prices have stagnated, next step will be down I am quite sure. Preconstruction still has $100/foot or so premium "for future appreciation" built into it. I think it is extremely risky to be buying on the assumption of future price increases over the next 2-4 years and as has been pointed out, at $500/sq. ft. (let alone closer to $600/sq. ft; renting out as an investment will not work based on the numbers).

Unfortunately for all of us in the market, those buying at these inflated prices will eventually (likely soon) encounter some price declines. the longer it takes, the worse will be the overshoot in the other direction so I hope the steam comes out soon and as a slow leak, not a big pop(which I don't expect but if prices continue to climb, that will be the risk).

I agree with cdr108 that it is refreshing to hear Ric actually put on paper what I am sure alot of his colleagues really think and present a view that every rational investor, home buyer should be considering prior to making any purchase.
 
Sunny Batra said:
It's starting from Saturday June 19th. They got few model I and VI on a high floors around 340k (25k more than the original VIP price) and are giving preference to their VIP Realtors first.

To all those who couldn't get a 1 br unit here now is your chance to get one (still a good choice even though it's 25k more) or move on to the next project Chaz on Charles which is next to Casa condominium and One Bloor.

We are expected to get the floor plans and price list from the developer sometimes this week and will be more than happy to share it here. Prices of Chaz on Charles will start from low 200s and are expected to be somewhere around 625/sq.ft. It will be a good one.
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Sunny, what are the new asking price for 507sft and 511sft models?
 
Ric said:
At no point did I say that Five wasn't a "smart buy". My comments are general to downtown toronto pre-construction condo prices. The argument of buying to live vs. buying to invest is quite simple. If you're buying to live then the normal up and down movements in prices shouldn't matter as you should have a long term view and prices "always" go up long term (as you said earlier). If you 're buying to invest by flipping, then your time-frame is shorter. You're gambling that in 3-4 years your condo would have appreciated enough to cover all ur costs and come out with a profit. But what happens if prices are stagnant or fall over the next 4 years? Your next option is to rent the property out. But, that only make sense if your revenue from rental will cover all your costs (thus the reason I keep saying that +ve cash flow is paramount). As it is today, most (if not all) downtown pre-contruction condos will not provide a +ve cash flow when rented if prices are above $450-$500/sq.ft.(based on 20% downpayment on 5 yr fixed loan). The unit you bought at 5, how much can you rent it for based on similar type units in the area? Can the rent cover all your projected expenses, if you cannot flip it in 4 yrs and have to rent it out?

You haven't made any profit until you have sold the property and the money is in the bank, so don't tell me about paper $25K profit.

I never predicted prices dropping to $400psf either.

So as not to prolong this debate, let me try and reiterate my point. If your an "investor" looking to buy pre-construction condo anywhere, with the hope of flipping in a couple of years, make sure ur investment can generate a +ve cash flow if your forced to rent due to a downturn in the market.
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Very well said Ric, totally agreed and this +ve cash flow model sure is a simple way of quickly determine if mathmetically a pre-construction project is feasible for investment or not. I would have bought suite 901 ( one of the hottest units in this building, original prices should be around $295K, before builder hold all 01 units and added another $25K even before the VIP sales start), but decided against it after that hike.

By the way, if I were you T.O.Condo, I will just go ahead and flip it right now for $25K instead of holding on to it for another 4+ years
 
funkybuda said:
By the way, if I were you T.O.Condo, I will just go ahead and flip it right now for $25K instead of holding on to it for another 4+ years
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I don't think T.O.Condo has that option at this moment ... even with an assignment clause, most builders won't allow it until a high % of units are sold (ie. 90%) or only during occupancy period.
 
cdr108 said:
I don't think T.O.Condo has that option at this moment ... even with an assignment clause, most builders won't allow it until a high % of units are sold (ie. 90%) or only during occupancy period.
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right right, totally forgot about that :)
 
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