can we really make money at this????

[bloomin]

Hi folks,
I'm new...although I've been watching and thinking about this for awhile.  i've noticed that there appears to be some very experienced people out there and so I have a few questions I hope that you will answer.  First, as my subject line says:  Can people really make money at this?  Is it just something you do as a hobby, or is it a "living"?  If your goal is to make $, and I assume it is, do you hope for a quick turnover and big cash, or do you look for small but steady income potential?  Do most of you sit on properties until the time is right to sell, or sell them as soon as you get them?  I hope this isn't too much to ask...but I would really like to know.  I love risk...seems to be in my blood...and making extra cash might be the only way I'll be sending my 3 kids to a decent post-sec. school....so this might be just the thing I'm looking for but I don't want to venture too far without a better understanding about how it's really done.  Thanks in advance to anyone who answers.   

[Pfm1011]

I think everyone has different intentions and plans.

 If you are looking to land a 500K house for 25K and immediately flip it...Go buy a lottery ticket.
 I think most of the money is in long term holds as many properties have zoning problems etc.  I think any piece generally will require lots of work afterwords IE rezoning etc.    I went thru the last couple years of Hamilton results and actually found several houses where people sold the houses again within 6 months and made some nice money. Mind you they were purchase for 40 , sell for 65 . Not purchase for 40 and sell for 400.

Many on here are after northern acreage for long hold or own use. Just look at the last muskoka sale. bids like crazy but many overpaid.

Niagara someone picked up a 2 acre lot on Lyons Creek rd for 7 or 8 k,  ( thats just beer money) could easily sell for 25 as It didn't seem to have any problems. So they did OK with that. Do a couple of those a year and you do OK.  The whole diligence and process probably is less then a days work including walking the land so an eventual 15k profit for a day is a good day. Unfortunately every failed bid takes just as long so you have to add that in to your costing.

I think for many people its a hobby which hopefully will make a few dollars  . Find land, do a bunch of research, study the zoning, etc then drive up and look at the land. Good way to get out of the office for a day.   Then bid a few bucks and if you win. You could make 10 or 20 k in  a few years.  If you lose the bid, convince yourself that someone was a fool and overpaid and you were clearly smarter as you didn't overpay( mind you if you win ..you have to ask yourself if you overpaid and everyone else thinks you are a fool)

As a hobby, it  beats watching reruns of Gilligan's Island.  The Smith falls sale in the fall, Took the day off work. Me , the wife and the kid drove to Smith falls ( 5 hrs) checked out the land , visited some historical locks, went out for dinner.  It was a great way to kill a day and get away from the office. Placed a bid but the sale was cancelled as the owner paid up ( imagine the nerve of that guy) . So no profit but a fun day.

A vast majority of the tax sale property never gets a bid as it is useless land and not worth the taxes owed. Of the ones that do sell its generally low money 10 to 20 k and long long hold but no risk as who really cares if you make a 10 or 20 k mistake in the big picture. 

Any big money commercial pieces that are listed are usually toxic sites which the owners folded the corp. The failed tax sale is just the vehicle the city uses to transfer the property to the city and then to a developer who will clean it on a deal. ( Kingston).  Be very careful on the commercial sites.

Also many parcels have no value to anyone but the adjacent land holder.

The tax sales arent a well kept secret that only a few people know about. Just look at this site , only a few posts but thousand visit every day.

Can you make a living doing this?..No... Can you make a few dollars?  probably in the long term. Will you have fun?..absolutely. Can you get rich?...Absolutely not ...buy a lotto ticket instead. 

If you are looking for big money..sit and wait as Im sure the Power of Sale market is going to skyrocket in the next year. We cant keep ignoring the US real estate and stock market forever.

[bloomin]

thanks pfm1011...
I don't even know if this is the right way to reply to you...we'll see if it posts.  You've given me an informative and seemingly objective answer.....gracios.  I'm not looking for the big bucks (well, of course I'd love them...but let's get real), but it's encouraging to note that most people stick to lower priced properties and actually make a bit of profit.  And it does sound like great fun! 

[dand]

Excellent Post

Im new here, and I am one of those looking for  a piece of property to call my own where I can park my butt for a week during deer season and not worry about trespassing.  Iam not looking to make money at it.  I will even look at into buying a piece of land that is mostly swamp just to have a place to do a duck hunt, which is one of my favourite type of hunting.

I had one experience with a tax sale, I went looking at the property could not find the rightaway spoke to a few neighbours in the area for more info...that had no idea about  the sale, guess what happened. out bid.
oh well.
 great info here
one question where do you go for checking about liens?

Thanks

[Pfm1011]

one question where do you go for checking about liens?

The best place is buy a package from  ontariotaxsales.ca

Once you do all the free due diligence , and you are planning a bid, you can get a title search from them for around 100, Its the property and the owner execution search.   Its the cheapest there is other then actually going to the applicable land titles office and spending a day searching and hope you don't miss anything,

The catch is they charge around 120 for an annual membership so the first search essentially will set you back 225 with the membership, Still way cheaper then lawyers

[Dave2]

I think there are several answers to this question; Personally I am a small fry and lack the experience that Frank and some of the more experienced members have.

Like many of the newcomers; my purchase was intended for personal use.  I got a good price but it is going to take a while before I can get full use or resale value if my mind changes.   I estimate 3 - 5 years.  The sale price reflects that.

I looked at and bid one for resale purposes last fall but did not get it. The bid price was too high for
me to make any money at it. (I believe either a neighbour or a user).  What was important is that I got an education and got an idea where the market prices were. 

For me the opportunity to acquire a local property justified me paying what I am sure some regard as a premium price.  (above assessed value).  The trick will be if the municipality will allow longer term redevelopment.  I am gambling that they would. 

People don't realize how convoluted this approval process can be sometimes.   Recently for one I looked at I was told that the development of the property required the approval of 12 separate government agencies, from several levels of government any one of which can veto changes. 

The bidding process can also be formidable.  One person whom I met at a bid opening and bid on a large number said they got only 1 bid in 12.  Of course the price bid impacts the percentage. 

I would be interested in the experience of some of the long term members like Frank or Rob what they have heard or experienced over the year.   

Dave

[Pfm1011]

Just for interest, what did you buy and how much ?   Several people have posted on here they got pieces but never seem to say  which piece and what they paid ..Of course it could be due to the nature of the net...Some armchair quarter back will  no doubt provide an "expert opinion" that you paid too much because..blah blah blah.....   Of course the fact they own squat wont be mentioned by them

[Frank]

Just for interest, what did you buy and how much ?   Several people have posted on here they got pieces but never seem to say  which piece and what they paid ..Of course it could be due to the nature of the net...Some armchair quarter back will  no doubt provide an "expert opinion" that you paid too much because..blah blah blah.....   Of course the fact they own squat wont be mentioned by them

1011 (wasn't there supposed to be an L in there someplace

When you are right in the ball park of other bids and you lose the bid by a few scheckels, the first thing you do is kick yourself for not bidding higher, but then reality sets in and you pride yourself on being close to the mark in your estimation of the properties value (both to you and others). 

There have been a few times when I have been way low, and yet right in the pack....with the bid being won by someone who came in with a really high bid.  Obviously they saw something else in the property, or were looking at it from a totally different angle than the rest of us  -  who knows, maybe their great grandfather once owned the property, and they wanted it back in the family.  In my last acquisition, I was the one that was really high (with another right behind me, and the rest at half our bids)...in that case we both knew something about the property that other's obviously didn't (I actually thought I would be low).   

Bottom line is - it's a crap shoot.  You just want to make sure that you can, in the end, get more out of it than you put in

p.s. it is human nature not to disclose your financial affairs for the world to see.

[Pfm1011]

p.s. it is human nature not to disclose your financial affairs for the world to see.



How true...One tends to forget that this is a public board and for every poster there is hundreds lurking "with envious eyes , and slowly and surely drew their plans against us "    plagiarized from H.G Wells

[speedfreeksteve]

The amount of quality properties that aren't redeemed is few and far between... and if they're in a place of perceived high value like GTA or cottage country then they're overbid alot of the time.

Although there is one company who I won't name here that apparently makes money at this.. although its unknown how much.. I wouldn't be planning to quit your day job anytime soon. If you wanted to make a living at this.. you would probably be better off searching out land deals by talking to the locals in various rural areas, or just looking for motivated sellers that are undervaluing their properties when they have them listed.

Right now from a pure investment perspective you'd probably be better off buying land in Florida (i did).. although you really have to do your homework.. or know what you're doing when you buy in an area outside of where you live.

[Pfm1011]

Land In Florida...absolutely a deal , as you said "If you do your homework'  They still are overpriced if they find out you are Canadian or if you deal with the companies that target Canadians. If you have friends in Florida or anywhere in the US you can do some real shopping. ( We screw foreigners too in our markets, Its not just a foreign thing)


Friend of mine just bought a house in the Keys. It was 850 us last year ( around 1.1 mil cdn at the time)They offered 600 and were laughed at.   Just picked it up for 350 US  ( 350 ish cdn)
Another friend picked up a 3 bedroom in Naples for 120 US  ( 1 block from beach ) Wife loves the keys but its a pain to get to.

The US dollar will also go up soon as it is highly undervalued and the day Bush gets punted the dollar will climb. The Canadian Government wants it at around 87 to 89 US which it will be in the year and  then hover in that area for the most part. Odds are the the US housing will continue down for another year then flatten for 3 or 4 years.  Great shopping opportunitys .

I think Canada will get some real bargains too. Its the first time in 10 years the realtors arent spreading their BS about "bidding wars"  Same story comes out every March and early April..havent seen it yet.,. Doesnt help that the Canadian Government has finally warned about a "downturn"

[Frank]

The US dollar will also go up soon as it is highly undervalued and the day Bush gets punted the dollar will climb. The Canadian Government wants it at around 87 to 89 US which it will be in the year and  then hover in that area for the most part. Odds are the the US housing will continue down for another year then flatten for 3 or 4 years.  Great shopping opportunitys .

I'm hoping you are right on the US dollars.  For years the Economists were saying the Loonie should have been between .75 and .80.  I had a bunch of US at the time, and disregarded the warnings, only to cash in when it was at .90 and take my lumps.  I should have repurchased at 1.10, but didn't.  Maybe now is the time to recoup some of my losses, but I don't trust the Economists (read crystal-ballists), it could be years before we do see .90 again, and I don't want to tie up my liquidity on something iffy, when I could be leveraging on deals here.

[Pfm1011]

I got destroyed by the US fall as my business is all US revenue with Canadian expenses. Life was good at 65 cents.

Im normally a doom and gloomer and dont play the currency game. I took some sterling I had and just flipped it to US. I guess I will know if my theory is right in six months.  I know the sterling is going to go to sh*t as their housing market is getting killed.

Im still kicking myself as I was in Bangkok when the asian markets tanked. A bunch of my friends bought a pile of Baht and ended up with around 35 to 40  % on their money in two weeks . Of course if I would have put money in it, it probably would still be down 

[speedfreeksteve]

Some say I'm "lucky", but I figured when the CDN $ was 1.06 USD then it was time to pull the trigger on some property down there (I am very familiar with a few places down there as if they were my own hometowns).

Land In Florida...absolutely a deal , as you said "If you do your homework'  They still are overpriced if they find out you are Canadian or if you deal with the companies that target Canadians. If you have friends in Florida or anywhere in the US you can do some real shopping. ( We screw foreigners too in our markets, Its not just a foreign thing)

If you go through a real estate agent (I didn't need to) then most won't screw you just because you're Canadian. The past 6 months is just alot of housing/land inventory that isn't moving so they just want to make a sale at any reasonable price.

These "companies" that come up here and do seminars on "how to take advantage of the Florida real estate market" are more like "how to take advantage of Canadians under the guise of an investment". Most are basically trying to sell you something at close to 2005 prices that they claim is worth alot more than it ever really was. They'll show you how the neighbouring properties have all went down in price, but will fail to mention that the selling price of their properties is the same it has always been.

There's still some upcoming seminars at the Toronto Congress Centre this month.

[Pfm1011]

"There's still some upcoming seminars at the Toronto Congress Centre this month. "


Wow sign me up.!!! Maybe I can scoop a couple timeshares at the same time, I understand they are great values and I fully trust the salesman..he wouldnt lie