As City of Toronto sells off its homes, buyers see $$$
The houses are the very definition of “as is.” Most are dilapidated and untidy – some are downright squalid.
And almost all of them have sold well above the asking price with a handful of bidders competing for the chance to rip up the tile floors and tear out the old bathtubs.
The properties are in the portion of the Toronto Community Housing Corp. portfolio designated for sale, two at a time. TCH plans to sell 68 vacant properties in 2013 and 2014.
Last week, for example, a rowhouse on Booth Street in Leslieville drew 11 offers. The house – listed at $499,000 – has crumbling plaster and a sagging porch, but it offers a coveted location, a private backyard and parking. The winning bid was about $580,000.
Most of the buyers are renovators and flippers who undertake a thorough overhaul, then resell the property, says real estate agent Leonard Fridman of ReMax Hallmark Realty Ltd., who has taken on the task of selling more than 40 of the houses.
Mr. Fridman and his team of agents are listing two properties each Monday, with an offer night scheduled to follow a flurry of open houses and appointments.
This week’s houses are in the east end, at 176 Eastwood Rd. and 93 Empire Ave. Potential buyers are expected to swarm through at the open houses this weekend.
“They tend to be in urban pockets that are gentrifying and continue to gentrify,” says Mr. Fridman of the houses in such neighbourhoods as the Beach, Riverdale and High Park.
Mr. Fridman, who specializes in buying and selling investment properties, has a large database of more than 2,000 potential buyers. He sends out an e-mail each week to let them know which houses are coming onto the block. He also lists them on the multiple listing service of the Toronto Real Estate Board.
TCH spokeswoman Sara Goldvine says Toronto’s social housing agency has all of the properties appraised to ensure that they are sold for fair market value or above. TCH is using the proceeds to offset a repair backlog on its remaining properties that stood at $750-million in 2012 but is expected to swell to $1-billion by 2015 without new sources of funding.
Ms. Goldvine confirms that the six deals that have closed so far in this batch – with approximately 10 more slated to close in the coming weeks – have produced bounteous selling prices.
“The sales are going better than expected,” Ms. Goldvine said.
Real estate agent Nicholas Bohr, who is working with Mr. Fridman on the sales, says the builders and renovators who are buying them like the fact that they’re not paying anything extra for embellishments.
“They tell us the more that’s wrong with the project the better because they have more opportunity to make money from it.”
Mr. Bohr, like everyone on the Fridman Elkind team at ReMax, is an investor himself.
Mr. Bohr says some potential buyers are young couples and other people looking to get into a single-family dwelling. In many cases they find the scope of the renovation just too daunting.
“They’ve been vacant for two to three years,” he says of the shabby condition of most of the houses. “That has taken its toll as well.”
But he thinks some buyers could end up with a desirable house in a sought-after area if they are willing to put in some time and effort.
“These are all great opportunities for a young couple to save some money on their first home,” he says. “But they get scared of the scope of what they’re getting themselves into.”