Kitsilano’s Farm House Flip

Unusual Home Sales

Well that’s what some people call them. Others simply call it a farm house flip.

Vancouver Real Estate has many stories of house flips. Some remain less obvious than this.

Kitsilano Flip

In this the real estate heartland of all things good, a high stakes flip was probably not a card envisioned by the long time home owner who sold her home six months ago.
In November of 2011 this little Kitsilano home sold for $1.4 million. On the market for only five days, the $1,400,000 paid seemed high at the time. The price was considered to be lot value for after all, it was just a tiny, turn of the century home, which some people might view as a 100 year old Kitsilano farmer’s shack with questionable room additions tacked on over the years.

Stats Don’t Lie

As 2011’s 4th quarter results of the Vancouver home market unfolded, it revealed a house market in decline. With passing time, the statistical information continued to compound the thought that the price paid seemed high. Now, with the most current statistics, one would firm their thoughts in the belief that the market was not improving.

Property Improvements

Improvements were minimal but sufficient to upset tree huggers who got excited when the sound of chain saws buzzed through the neighbourhood slashing down some well established tall fir trees at the front of the property. This angst settled somewhat when the presumed second ‘improvement’, was seeing a young couple move in. The act of making trees disappear trees now seemed less important than knowing that this young couple were hoping to live their expensive Kitsilano dream. The dream changed with a revelation – they were a mirage, they were renters!

Sign is Up

The six month lease is almost up. Now 6 months later and almost to the day the place was first sold, so is the For Sale sign. Bright and shiny it stands gleaming in proclamation that this property is now for sale. The asking price – $1,388,000.

24 Hours

With the rising sun of the next day that sign has a sticker on it that says – SOLD! I checked the Realtor’s® web site to find that it SOLD for $1,500,000!

About Larry Yatkowsky

Larry is a recognized real estate expert. A veteran professional, his experienced counsel leads Vancouverites in his west side community to place their trust in a man passionate about his work. Uncompromising ethics bring a balanced approach to realizing your real estate dreams.

When Life Moves You - contact Larry:

*Disclaimer: Statistics Courtesy REBGV. While believed to be accurate they are not guaranteed.
**Numbers provided may vary as they are dynamically posted by the REBGV.

Reader Comments:

Bubbleboy Says:
April 7th, 2012 at 1:07 pm

Realtor fees, PPT, closing costs, and possible mortgage penalties add up and profit could be peanuts.
Mmmm, let’s see……

Realtors fee= $42,000
Property transfer tax = $17,000
Legal fees = $450-$700
Insurance ????
Maintenance?????
Property taxes ?????

Maybe a profit of $35,000
Just lucky enough that inventory for kits is low and the seller was able to get out on top. Most other areas, would likely result in a loss. Flipping is now history. The next few years flipping will all result in losses as these investors try to unload their depreciating and unwanted properties. Especially if you own a sky box.

fish10 Says:
April 7th, 2012 at 6:04 pm

Larry

Not pertaining to this particular deal at all.

However, there is some odd stuff in the sales, and I hope to God we do not end up with a major rash of mortgage fraud out there.

In the US there were lots of cases of certain homes flipping for higher amounts and for bigger and bigger mortgages.

The net result was that money was being ‘washed’ and the final bag-holder would default, with the other players having made a nice sum in the middle.

Flip Side Says:
April 7th, 2012 at 8:00 pm

On the other side i know of instances where the opposite is/has taken place, if you could do a entry of one of the not so lucky flips that would be appreciated! Its not all sunshine and lollipops in Vancouver.

April 7th, 2012 at 10:06 pm

@Flip Side
Not sure that the first seller is feeling lucky.

AG Says:
April 8th, 2012 at 6:54 am

Given that there is no chance of profit on that, has anyone looked into money laundering?

BubbleBoy Says:
April 8th, 2012 at 7:44 am

Larry,

If you want to see a really successful flip, check this one out.

3247 Commerial St.
Depending on the cost of renos, which was estimated by my contractor to be up to $200k, they made large! If these renos were DIY jobs, $50k and lots of help and time. Cost of home in 2010 was under $600k, sold in 2011 for $1.2 mil. It’s a (Name removed by editor) listing, so this house is likely not a quality reno’d home. Looks really nice, but could fall apart tomorrow .

April 8th, 2012 at 8:13 am

@bubbles,
Don’t mean to be righteous but unless you want to stand by your comment with your real name I felt compelled to edit your comment.

Smoking Man Says:
April 10th, 2012 at 7:44 pm

Hi Larry,

Do you think all the press about debt levels/etc. will (or is it already) have any impact?

Any coffee chatter about planeloads of HAM (or lack of them)?

Keep up the good work.

I just got back from Las Vegas, speculators are starting to buy the place up.

Christie Says:
April 15th, 2012 at 1:06 pm

The person who sold the mansion for $1,500,000 has to be the guy who was never called up in lessons, never broke a limb and has luck whenever he’s playing cards. With today’s market trends it’s almost a miracle. Although the actual profit isn’t so high, it’s still a profit. Sometimes you wonder if it’s of any help to know all the pros and cons of house flipping when luck has its own laws.

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