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Grow-Op Homes are Cheap, Here's Why

2/27/2015

26 Comments

 
I have borrowers who buy these former grow-op homes in all stages, even with the health hazard still registered.  However, I wouldn’t let just anyone try and buy one of these unless they knew exactly what to do and had a solid exit strategy or rental plan.  These homes are usually bought as essentially land value. These homes need to be taken back to the shell in most cases, including a specialized and expensive remediation process.  There is a video below from a recent 2015 Calgary bust that illustrates why these homes are a challenge to repair.  Once remediated and repaired, these homes typically have a ‘stigmatized discount’ attached to them on the open market.  In my experience, in a balanced market, this discount is at least 10% and some as much as 20%.  That is AFTER it has been repaired!  So between re-building the entire house and the stigmatized discount, you can see why these homes are super cheap (not to mention the potential lingering health issues). 

Contrary to popular belief, there is financing available to those who know what they are doing with these stigmatized, health hazard properties.  Those real estate investors who take on these projects and do them correct are helping put homes and communities back to normal.  


Take a look at the video of the recent Calgary Grow-Op Bust:   

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Price Drops Arriving Quicker Than Thought!

2/2/2015

2 Comments

 
Oh wow, my house price drop predictions might come earlier than previously thought!   In Calgary, homes sales have plummeted by over 35% below the 10 year average.  There are nearly 2,600 active listings detached listings pushing the market quickly from a sellers’ market to a near buyers’ market. 

That escalated quickly.   I had predicted in previous posts a market correction heading into the summer.  These price drops may come much sooner.  Buyers are sitting on the fence looking for bargains, while sellers are rushing to list their homes.  If you are downsizing then I suggest you move quick!  If you are upgrading then waiting might not be too bad as lower priced real estate will drop less than the higher-end homes.  If you are renting and looking to get into home ownership then you might want to talk to me in the next month or two.  Either way, brace yourself for a rough real estate market in the coming months.

For more info or if you have questions or comments please let me know.

William Charlton

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William Charlton is a direct private mortgage lender and does not provide mortgage advice, mortgage brokering services or arrange third party financing.  Should you need mortgage advice please contact the Real Estate Council of Alberta or the Alberta Mortgage Brokers Association.​

William Charlton does not accept other investors and does not raise funds. 

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