I see lots of real estate agents selling newly built condos (the kind i want) for like $220-230k. The buildings are either almost finished or just recently finished. I'm curious, how much did they buy these for to begin with, and how long ago? What's the average profit margin on em? 10%? 20%? Also, where could i go to find a chart that shows how real estate has historically appreciated in Toronto?

stats canada.

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Failed at becoming a god...

given the market in recent years, they will have realized a substantial profit if they bought early pre-construction and held onto it for even a year.

I saw a unit in a small, 5 story loft avail. for $200k from the builder...it just sold for 240k, less than two years later (still not finished). $40k (less costs) for doing nothing. not bad :P

Beware doing that yourself now though...CMHC is (finally) calling for a significant dropoff (though still healthy increase) in real estate appreciation over the next couple of years.

I just figured it out...you work for the Google marketing department

If he does, after todays earning reports, he might be out of a job!

The only unhealthy market at this moment in Canada, is Vancouver, they're the closest to burst the bubble than any other city in Canada.

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quote:

Originally posted by d!abolic I see lots of real estate agents selling newly built condos (the kind i want) for like $220-230k. The buildings are either almost finished or just recently finished. I'm curious, how much did they buy these for to begin with, and how long ago? What's the average profit margin on em? 10%? 20%? Also, where could i go to find a chart that shows how real estate has historically appreciated in Toronto?

It depends...

If you're seeing the builder's broker/agent selling the units - then they (generally) have not been bought before - the price that they are being sold for is the "market rate". Realize that people who buy pre-construction often get significant discounts. Usually a developer will pre-sell just enough units to get financing for the project (25% to 35% of project costs). Developers will then reserve a certain amount of units to release at various points during construction - each release becoming more expensive (on a per sq. foot basis).

If the broker/agent selling the unit is NOT the builder's broker/agent - then you are getting a re-sale unit. Your best bet to find how much the unit originally went for is a bit of searching on the internet (which, no offense, you haven't shown a tendency to do since you post questions on TA all the time). Since the initial sale of a new unit by the developer is not entered into MLS - you cannot track the original purchase price. You can check to see who is listed on the title to determine if it is not owned by the developer.

Some investors have made their money simply by flipping, buying into developments pre-construction and then selling before occupancy. Many developers (not wanting to kill the golden goose by inflating the market) are putting "no resale" clauses into their purchase agreements - the purchaser must retain ownership until condo corporation registration (occupancy/pseudo-mortgage payments often occur months prior to condo corp. registration).

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- rabbit.joker [funny¿rabbit] | www.rabbitjoker.com |www.ddtt.org

Dark Dirty Tech Tribal. | Hands in air (trance) and feet on the floor (house).

Last edited by rabbitjoker on Feb-01-2006 at 07:50

quote:

Originally posted by rabbitjoker Some investors have made their money simply by flipping, buying into developments pre-construction and then selling before occupancy. Many developers (not wanting to kill the golden goose by inflating the market) are putting "no resale" clauses into their purchase agreements - the purchaser must retain ownership until condo corporation registration (occupancy/pseudo-mortgage payments often occur months prior to condo corp. registration).

If they don't put this clause in their agreement, and let's say you wanted to invest, wait until it's built and sell as soon as it's completed, what other fees do you pay besides your original down payment?

Sorry for such a newbie question!

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quote:

Originally posted by Pasta If they don't put this clause in their agreement, and let's say you wanted to invest, wait until it's built and sell as soon as it's completed, what other fees do you pay besides your original down payment?

One would be responsible for all costs relating to selling real estate (agent fees, listing fees, possible mortgage discharge fees, possible legal fees, etc).

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- rabbit.joker [funny¿rabbit] | www.rabbitjoker.com |www.ddtt.org

Dark Dirty Tech Tribal. | Hands in air (trance) and feet on the floor (house).

^^^ yes...unless there's been a significant boost in market value in such a short time, you usually won't turn a profit of any substance by flipping in under two years when you factor in realtor fees, legal fees, mortgage fees (penalty, if not an open term), etc.

keep in mind any capital gains implications, depending upon the nature of the transaction.