Taxpayers funding condo flippers?

By now everyone knows about the high cost of the Olympic Village project.

Current estimates are that it will cost taxpayers between $400 – $600 million to pay this off.

There are 68 units still left unsold over the last six years, but over at the ‘Canada House’ building it looks like a number of units have been bought and flipped, at least one for more than $400k profit in a month.

Hat tip to Mac who pointed out this article in the Province.

So whats going on here? Should these units have been priced higher or considering the tough sales across this project were they right to unload them quickly even if there were buyers willing to pay more?

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1) lostsajobs Says: at April 17th, 2014 at 9:44 am (post #81) I know a friend who makes over $60K per year working part time as a server. ————————————- I call that BS.There is no way that person is making $60k per year just being a part time server , unless the food is served with suck sucky or fucky fucky on the side instead of fries ################################################## 2) lostsajobs Says: at April 17th, 2014 at 9:44 am (post #81) I can tell being a manager responsible for hiring entry level workers over the last 20 years there are tons of jobs available in the $15 to $16 starting range which require almost no skills. ————————————————- Please enlighten us so we could get teadoneastside a job, better show proof of jobs that need no skills,so tedoneastside can move out of… Read more »

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@93 “Owning is a forced savings plan for people who need to be forced to save.” That has to be the lamest excuse to buy real estate. Those who wouldn’t save otherwise are the same ones who will take out a HELOC and go into other debt extracting all the forced savings out anyway. Many people who own end up owing more many years later than they started with. It also forces you to pay taxes and fees such as PPT, PT, basic maintenance, interest and realty commissions which are forced but not savings and make up the bulk of your payments. The fact is housing is an expense and is consumption just like rent and most other things you buy. If done outside a bubble the expense should be lower owning vs renting over the long term but it… Read more »



It’s incomplete in the sense that he ignored the opportunity cost of his negative monthly cashflow and ignored the time value of money.

What he’s calculated is essentially the owner’s cashflow for the 7 year period. To properly compare the investment he’d want to calculate the net present value or internal rate of return.

who is ahead


how was the owners calculations incomplete as you say?


Also, if the renter was diligent with investing the difference each month in the S&P500 then his internal rate of return would’ve been 6.2% during that period. Fairly similar to the owner’s return.



The opportunity cost is even higher than that. $1250 is only the mortgage payments. You also listed $225/mth for strata, ~$114/mth for property taxes (I assumed the taxes you listed also included property transfer taxes since it looked high), and an unknown amount for maintenance. Wasn’t clear if insurance referred to CMHC or home insurance.

I calculated the owners internal rate of return as ~6.6%-7.2% so who did better would depend if the renter was able to beat that return with his investments.

The renter was definitely more wrong in his analysis though. The owner’s analysis was just incomplete.


Does anybody know a good place for a tropical vacation now that Thailand has been totally ruined by filthy locusts?

and another culture ruined

Who is ahead - renter or owner

Spoke too soon…

A complete analysis would see that the difference between owning and renting the same unit is 800 vs 1250 a month for 7 years. So the renter ‘saves’ an extra 450 a month which invested at 7% over the 7 years would yield a $21,000 proft ( 37800 ‘principle’ yields 58,8000 at the end of 7 years)

So the renters ‘profit’ is 21000 which, when added to his costs of 67,000, would take his total ownership costs to 46,000 vs 52000 for the owner…

Pretty even either way it seems

Who is Ahead - renter or owner

Thanks for weighing crab man…no real downpayment (0% down) so no real opportunity costs

Shows you how easy it is to misunderstand the total costs and the true profit….even other posters here do not get it….

I guess its easy to do when you become dogmatic in your belief in renting or your belief in owning


@Who is Ahead – renter or owner,

The owner did better. His total costs were $158,800 and he walked away with $106,000 after paying off the mortgage balance. That means his actual cost of ownership was only $52,800, which was less than what the renter paid.

The renter’s math is wrong because it counts principal payments as an expense without considering the fact that they also increase the owner’s equity.

Of course, if you wanted to do a complete analysis, you would have to include the opportunity costs of the down payment (was there one?) and extra monthly outlays over the 7 year period.

[…] Atomic Frog had this to say: […]


If the renter can’t save money to build an investment portfolio, the owner is ahead. Owning is a forced savings plan for people who need to be forced to save. Once you have money, how you invest is your choice. But there is always a price to be paid for living: food , shelter, clothing. With shelter you can attach a type of onvestment to it but over a lifetime it usually adds up to something similar to renting. Except if you live in Vancouver, then all bets are off :).


the Caribbean and Thailand should do whatever they can to stop unwanted foreigners out of their country. it’s their right as sovereign nations.

if we don’t have the same right, can we say we are a sovereign nation? we used to be, but maybe not anymore. maybe we are a colony of an overseas nation.

crimea on the edge of the rain-forest.

how long till sinophiles storm richmond city hall? or is that even necessary at this point?


@BPOM – there is always the Caribbean overrun with overweight Americans and Canadians who are full of themselves and think they are the best thing since sliced bread to these island nations.

Also since you love to slam Chinese, how about the thousands of pedophiles that frequent Thailand?? I believe the practice is bad that Canada had to enact laws to explicit prosecute such crimes and actually have law enforcement officers in Thailand to catch such vile scumbags.


@Yalie – yeah, as I said maybe less than 5% of the jobs fall into that category, definitely not requiring tens of thousands of foreign IT workers. Funny how the C level jobs which should be even harder, more complicated, and with even harder to find skills rarely needs to use TFW programs. Apparently, Canada has no shortage of highly sought after executive skills.

Also, a lot of the so called talent/skill shortage is also as I stated earlier, company wants 5 or 10 years skill with some tech that’s only been out for 3 or 5 years. Hello!!! Only the developers who developed the technology might have the required years of experience! Geez…

A big part of the problem is also the brain dead HR screening people.

An Observer


I doubt we’ll see lower averages this month than March since the average is really based on the distribution of sales. This month the Van West SFH has been selling while last month was horrendous. The fact that Van West sales this month are somewhat normal is enough to boost the average up. Median is tougher to say.


@58 “Well, it’s a tactic. When you’re dealing mostly with elderly people and their waiting-in-the-wings children, you’d be surprised how well it works as a negotiating tool.” BS. That is what you hire a realtor for. All negotiations start from one realtor contacting another. A seller is never contacted directly. The realtor is responsible to advise the client. In this case the realtor would likely direct them to a lawyer for advice. If this was common practice the brokerages would know about it and start advising clients to ask for higher deposits and would black ball offers by buyers agents involved in this practice. If the deal falls through the realtor and brokerage does not get paid either. A deposit is held in trust and will be tied up until a court decides on it and the buyer can be… Read more »