I agree. The lower level units at the VIP event are good investments. The risk of losing money is much smaller than the higher floors with $$$ floor premium.
I don't think it's a smart investment if someone assumes/predicts the market will be up in 4 years (based on a guess) and he/she does not care about cash flow to hold the investment until it's the right time to sell.
you are missing the point!!
To put it in very simple terms!
1. Everyone here is looking to flip as soon as interim closing hits! Then, the cash flow analysis has a much, much smaller impact on profitability than where the overall market will be! Because once you lease it out, you have to lease it for at least a year. Are you willing to hold out that long, you will have already waited 4 years, are you going to wait 5 years, 6 years? That would start to look like a GIC, where you just park your money and hope for that meager 2% interest or in your language, the + cash flow.
2. Regardless of the importance of cash flow analysis! The point is that NO ONE can make any type of accurate prediction for something as micro as rent vs. cost, 4 years down the road! Talk about "guesses", that would be a much much wilder guess than my prediction that the market would be higher in 4 years, at least mine is macro and based on the common sense that everyone has observed, that the Canadian market is generally upswinging. Similarly, predicting the GDP growth over the next 4 years, would be much easier than to predict the exact cash flow of a particular stock 4 years down the road.
3. Again, it is common sense and general knowledge that:
1. higher floors are easier to sell or flip
2. lower floors are easier to least out, since renter care less about the floor (better for holding out)
If you got into the lower floor because it's easier for leasing out, then you are probably not confident about the market , then you should not have gotten into the flipping business to begin with!!
You do have a point about the higher floor premiums, however I believe all of the 20ish building in the ParkPlace complex project will be like that! So if you are trying to flip a higher floor, you would not be at a disadvantage to those from other buildings in the complex! In terms of comparing higher to lower floor, I would say that it's sort of like different market segment. People who want 25th floor would not settle for 5th floor. Even if there is a premium.
In the case of TANGO, the higher floors are especially important for flipping because,
1. it will be blocked in the southside by a building, so the southfacing units would need to be higher to get more sunshine, this is most important since potential buyers who are buying to live are more driven by the look and feel, that this so called 'cash flow analysis'.
2. 401 is to the South, so the higher floor will be better for the noise factor. I actually did my experiment by visiting the NY Towers, compared a 5th floor unit to a 23rd floor unit, noise was much much more noticable in the 5th. Do you honestly think, people are going to want live with all that noise just to save $20K on a 400k condo?
3. Again, as a flipper you are selling to someone who wants to live there, so the 9' ceiling would be much more important than you and I. I am saying that the 10K premium is cheap, but it is definitely not expensive either.
2.
