5. Where do Buyers get the money?

magician_money009-copy.jpgFirst hand accounts of where buyers are getting the cash for their downpayments.

Financed by Mom & Pop? Grow-ops? Four jobs? Offshore funds? Robbed a bank? Commodity trades? And so forth..

13 responses to “5. Where do Buyers get the money?

  1. This from betamax at RE Talks:
    Posted: Tue Feb 26, 2008 1:05 am
    “My sister bought 3 townhouses (sequentially, not simultaneously) each with 25% down payment but no verified income. She was a beginning realtor and had no income when she bought the first townhouse (downpayment came from sale of previous house w/ ex-husband), which she later sold and upgraded to the second townhouse. She only had stated income (hadn’t done her taxes yet) for the third place — at which time she upgraded substantially with the benefit of a 40-yr mortgage.
    The bank certainly didn’t care — with 25% down, they’re sure they’ll get their money back no matter what. After all, prices can’t possibly fall lower than 25%. Yah, lending is loose here. Don’t kid yourself otherwise.” (a)

  2. This from ‘Property_Magnate’ at RE Talks:
    Posted: Tue Feb 12, 2008 11:48 am
    “My brother in-law bought his starter Coquitlam home 3 years ago with the entire downpayment provided for by his father (my father in-law). He definitely could not have afforded the home by himself (he works with the City in engineering and his wife works as a teacher).
    Another friend of mine had her small Dunbar 1 bedroom apartment entirely paid for by her parents (West Van people) and she is a teacher in her late 20s.”(a)

  3. This from ‘rainmaker’ at RE Talks:
    Posted: Tue Feb 12, 2008 1:22 pm
    “I fall into the latter category (20-30 year olds) and without the inheritance left to me by my grandparents I would likely only be starting out, instead I am moving on to my second condo and can’t wait to finally have a home large enough to raise a family in. “(a)

  4. I know two seperate people who came into money from ICBC settlements and used that as their downpayment. Call it the Auto-Lotto! (a)

  5. I know several people that purchased properties jointly. Instead of each person spending $400,000 on a condo, they would buy a nice house at that time for $600,000 resulting in only $300,000 each. (a)

  6. This from sheeplessinvancouver at vancouvercondoinfo:
    2008-03-03 13:08:25
    “I know of two places that just sold. One was sold without being listed. The seller had a buyer before deciding to sell. The second sold for 10% over list and was probably on the market for a couple of weeks. One buyer used equity from an existing condo and broke even. Another buyer also sold an existing condo and probably didn’t have any problem affording the place they bought.”

  7. This from Greenhorn at RE Talks:
    Thu Mar 06, 2008 1:42 pm

    “My friend is a realtor that sells downtown condos. The investors he sells to are Korean, Chinese and Iranian. He knows they are investors because they do not move in and rent the units out.”

  8. i bought my first place(a condo) back in mid 2006, paid for it with my own money i just sold it last week, made a 100,000 profit from it. so ya i did allright but i had to work for it.

  9. canrocks –
    Well done on your profit.
    What was your return? (Deposit to profit ratio?).
    Have you bought more real estate with the proceeds or are you now renting?

  10. This from Carioca Canuck at Vancouver Condo Info 2008-03-21 09:59:03
    “I personally know 3 Calgarians who have bought property on Vancouver Island in the last 12 months.”

  11. I put down 17,500 it was a presale, i can remember going back a week after i veiwed the showhome and put my name down on one the sales girl told me it was now selling for 5000 more! i thought was just nuts. not sure if i’m going to jump right back in i’ve been checking out some new builts lots of people holding assinments or just finished and trying to sell i’m thinking there may be some deals out there if i wait a bit.

  12. This from Rob Chipman on his blog (04.04.08 at 1:13 pm)

    “Middle aged woman, adult son with baby. Grandma helps raise the child. Everyday commute to work and back is complicated by extra commute between Grandma’s and the son’s place. Grandma owns, son rents. If they buy a house that they can share (house with a good bsmt suite) life becomes easier, and more stable for the baby/toddler/grade schooler. Grandma is willing to transfer her equity out of a condo closer to town into a house w/ suite a little further out if its on a transit route. They’re looking at paying $1200/month each on mortgage. Its doable. On his own the son can’t buy.

    Clearly they aren’t going 10% down. They understand the current market. The bank will lend them more than they’ll borrow. They aren’t buying to make money. They also aren’t spending 60% of their income on housing (and, btw, the son rents from me now, and pays about 1/2 of what he’d pay to buy, so he’ll double that cost, but save some on child care).”

  13. This from View at rob chipman’s blog (04.04.08 at 9.10pm)

    “I thought I’d share this with everyone. I have three friends that have been flipping and speculating individually. They decided to get together for a big flip eliminating most outside labour to potentially increase profit. The house was listed in March and they have had 2 open houses. It is pushing $1 M in Grandview. There are several flipper listings in the same price range to my surprise, as well as the $1 dollar listing that went to auction we spoke of in a previous thread.
    You ask how people can afford to buy? My anecdotal example shows individual friends combining credit and buying to flip, expecting to profit. Two of my friends involved have said this is the last flip for them at this time. “

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