Comment 31594

By beentheredonethat (anonymous) | Posted June 09, 2009 at 10:22:19

Stinson started selling off the plan at 1 king west in the late 90's. I bought a unit in 2001 for $197,900. I was one of the few lucky ones who sold. I got $170,000 in 2008 - that was a really great price and it took us over 1 year to find a buyer. Between 2001 and 2008, downtown toronto condos had INCREASED in price on average by close to 100% and they sold in well under a month of being on the market. How does a building do so badly in such a robust market?

Here are a few reasons why, (not including the activities of Harry and his loyal board members):

Many could not sell because they were locked into the hotel pool. We got out of the hotel pool with much wrath and difficulties from Harry. He sent us some nasty emails and tried to deter us from leaving. We were afraid we would be locked in even though legally we were entitled to leave with 4 months notice. After having a big fight on our hands, we got out. Being in the hotel pool means paying commercial taxes (5x that of residential taxes) and very low unsteady rental returns each month. Once the receiver came in, owners were not allowed to leave the pool and are only allowed to leave now if someone else enters (who would do that?) This is why they couldn't sell- no one out there is crazy enough to buy a locked in loser investment like that. Due to new circumstances, too lengthy to discuss selling has become much harder regardless of being in the pool or not.

When we made the investment, the marketing materials were pretty betlievable. They projected $175/night at 70% occupancy. The hotel would take 20% and the rest would be left to the owners. Our projected profit was $2,500/month. None of this happened in practice. The hotel was taking between 65% and 80% per month and they were not meeting their occupancy rates or nightly rate projection targets. Cheques were as little as $200 and change a month while our property taxes and condo fees amounted to $1,250/month. Add to that interest on the mortgage. Losses were always in excess of $1000/month year in, year out.

Add the losses we made having to finance this unit to losses we made selling it in a hot market and we endured many tens of thousands in losses.

Anyone who thinks they should give Harry a chance, thinks he loves Hamilton or thinks he is breathing new life into Hamilton is a sucker like I was. You should just empty your pockets now; hand 50k to him, don't waste your years stressing over an "investment property". There are suckers everywhere. In a city that might feel like it has been decaying and in decline, it is especially easy to find victims who want to believe the dream.


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