More Undisclosed RE Industry Insiders Publicized As Clients – “In 1995, Allan and Karin Hoegg were mortgage-free. But no more. Today their Vancouver home is a valuable source of income as they plan for full retirement.”

mortgages-property
Allan and Karin Hoegg are pictured in their home in Vancouver, British Columbia on March 8, 2013 [image F.Post]

“In 1995, Allan and Karin Hoegg were mortgage-free. But no more: today their Vancouver home is a valuable source of income as they plan for full retirement.
Allan Hoegg says when their son and daughter-in-law wanted to buy a house, they took out a variable-rate mortgage so they could help them out. “We wanted to take advantage of the stability of the current rates.” To cover the mortgage payments, they rent out a suite in the home to students.
The couple also established a home line of credit that allows them to free up cash for investment purposes when they need it. “It gives you maximum flexibility and you can pay it any time you want without penalty,” he says. “It’s dead easy.”
Like many people planning their retirement, there’s a sentimental side to keeping their home, he says. But there are just as many practical reasons. In the Hoeggs’ case, selling to downsize would mean substantial commissions and moving costs. “Besides, real estate is a very good investment in Vancouver,” he says. “The longer we can stay here, the greater the possibility of no-tax capital gains.”

“For the most part, people want to stay in their homes, says Rob Regan-Pollock, senior mortgage consultant with Invis – Team Rob Regan-Pollock mortgage brokers in Vancouver. “The fact is they’re sitting on a big nest egg. So when they get near to retirement, they start asking how they can use that equity to help them in their retirement.”
There are plenty of options to consider, from applying for a line of credit or reverse mortgage to renting out your property to finance your monthly costs at another residence.
A line of credit is the most flexible option, Regan-Pollock says. “If for some reason you can’t meet your monthly expenses, a line of credit on your home can be a very good buffer. The interest rates are low — typically prime or prime plus one per cent, depending on the institution and your qualifications. It’s also quite sustainable, since your home will often appreciate in value more than the amount of debt being drawn down against it.”

- from ‘Home is where the retirement money is’, Denise Deveau, Financial Post, 13 Mar 2013

Comments from ‘Bo Xilai’ below the FP article, 27 Mar 2013:
“Denise, why didn’t you mention Allan Hoegg works for Invis – Team Rob Regan-Pollock mortgage brokers. Of course he’s going to use his house as an ATM… he’s just eating his own cooking. And at the same time you’re interviewing Rob Regan-Pollock as an “expert” in your piece. http://www.teamrrp.com/team/
More fake real estate stories using employees as plants.” …
“They used an employee of the “expert” interviewed without disclosure and, I would argue, in a deceitful manner to promote a strategy beneficial to the “expert’s” reputation and business interests.”

group
Allan Hoegg (top left) part of Team Rob Regan-Pollock mortgage brokers [image teamrrp.com]

[thanks to 'C', for sending news of the article and 'Bo Xilai's comments to vreaa via e-mail, 27 Mar 2013]

This article is interesting..
1. for the undisclosed insider publicized as client
2. for the journalist’s ineptitude or, alternatively, collaboration
3. for the retirees’ dependence on RE holdings for retirement funds
4. for the fact that such borrowings were used to purchase more RE
5. for the need for tenants in their ex-SFH to cover mortgage payments
6. for the assumption that Vancouver RE is “a very good investment”
7. for the assumption that prices will continue to rise.
– vreaa

For those readers unfamiliar with the recent high profile case of industry insiders masquerading as condo buyers, please see:
CTV TV News Featured ‘Condo Buyers’ Actually Marketers Of Very Same Condos!, VREAA 13 Mar 2013

UPDATE:
This article also headlined and discussed by Whisperer here:
‘Another media scandal from the real estate industry? News article appears to be contrived shill piece from PR company.’, 28 Mar 2013

69 responses to “More Undisclosed RE Industry Insiders Publicized As Clients – “In 1995, Allan and Karin Hoegg were mortgage-free. But no more. Today their Vancouver home is a valuable source of income as they plan for full retirement.”

  1. The picture is classic. She looks very nervous and he looks like he’s watching closely to see if she’s going to crack. I wonder if one of her grandchildren is being held at gunpoint in her eyeline to make sure she poses nicely. ;)

  2. This is typical of all of these people running this country,they don`t care about what they have to do ,as long as they just keep getting pampered in their phony ass lives. It`s no wonder nobody vote`s or believes what these phony`s spout about anymore ,what ever happened to all of the people who used to stand for something in this country. Very sad ,money doesn`t mean shit if you can`t look at yourself in the mirror.

    • …”what ever happened to all of the people who used to stand for something…”…

      [NoteTo’BackBacon': We’re still here . We never SoldOut. We’re fighting harder than ever… For RestaurantUnemployees… For Eptes… for EveryBody.”

      “And you shall know the truth, and the truth shall make you free.”

      [NoiteToEd: I still have my berets... Green... Purple... Black. OK, I traded away the Green & Purple for EmergencyProphylactics... but I still have my Black.]

      • Right on, Nem!

        Loved the song parody the other day.

        On this thread’s topic: just when you thought you couldn’t be any more disgusted by unholy alliances between the press and the RE industry, or by uninvestigative journalists…. Muckrakers unite!

    • Aldus Huxtable

      When you get what you want in your struggle for pelf,
      And the world makes you King for a day,
      Then go to the mirror and look at yourself,
      And see what that guy has to say.

      For it isn’t your Father, or Mother, or Wife,
      Who judgement upon you must pass.
      The feller whose verdict counts most in your life

      Is the guy staring back from the glass.
      He’s the feller to please, never mind all the rest,
      For he’s with you clear up to the end,
      And you’ve passed your most dangerous, difficult test
      If the guy in the glass is your friend.

      You may be like Jack Horner and “chisel” a plum,
      And think you’re a wonderful guy,
      But the man in the glass says you’re only a bum
      If you can’t look him straight in the eye.

      You can fool the whole world down the pathway of years,
      And get pats on the back as you pass,
      But your final reward will be heartaches and tears
      If you’ve cheated the guy in the glass.

      Dale Wimbrow 1895-1954

      • Very nice. And holds true for all but the sociopaths and psychopaths.

      • Ford Prefect

        Perhaps the struggle between those with a conscience and the sociopaths are what this site is all about. Every day seems to profile more of them.

  3. Vancouver Hipster

    Shameful..and disgusting

  4. CanuckDownUnder

    Love it, great work Bo Xilai!

    Speaking of deceptive practices, this is an amazing piece of work which developed from a blog post regarding foreign ownership of RE in Australia. Not only are there a large number of circumstances under which foreigners can purchase RE (basically any new dwelling or anything which will be developed), a poster decided to test the application system with astonishing results:

    “Rules governing foreign ownership of Australian real estate have been proved a farce after authorities granted a fictional person leave to buy a $598,000 Melbourne house.

    It took less than one business day for the Foreign Investment Review Board to sign off on a pending purchase in Vermont South by “Chodley Wontok”, a non-existent Russian national with a non-existent Australian visa.”

    http://theage.domain.com.au/nonexistent-man-granted-leave-to-buy-598000-house-20130327-2gu0p.html

  5. Cyril Tourneur

    I am shocked, shocked to find that fraud is going on in here.

    • Did you just watch Casablanca? I am shocked, just shocked to know gambling is going on here…. Sir you winnings…. LOL

  6. Whoops! You guys are starting to rake some decent muck.

  7. Again, this is just bad journalism, not necessarily bad marketing.
    Actually, it’s bad marketing too, because “team rrp” should know better…

    • “The Cassandras have gotten the upper hand recently”…
      As in, Cassandra who sees the truth but no one listens to? She the upper hand in the battle of who is being listened to? Good, then.

      Yeesh. I read to the second page and then realized there really is no way to unread, and besides, life’s too short.

  8. Canadian journalism reached new lows under the Asper empire. However after their demise, I had hoped things would improve. That was foolsih obviously.

  9. Some of us older Vancouverites are very trusting and can fall for marketing lines such as this.

    It is easy to forget now, but Vancouver was a small town till 1990s – people knew each other and life was easy (if born on right side of town).

    The target market for these people are people like me – in my seventies, house paid etc.

    I won’t fall for this but there are others who will – we grew up in a simpler world and not used to all the gimmickry.

  10. Here is the link of that VanMag article about how cheap Van RE is, as posted by Jesse on VancouverCondo.info
    http://www.vanmag.com/Real_Estate/Feature_Stories/Is_Vancouver_Really_as_Expensive_as_it_Seems

    • Vancouver Hipster

      Vancouver is one crap city. Land of charlatans.
      Yes really, I mean it and not talking in hyperboles.

    • Many thanks, Space889. That article was fascinating in my opinion. The author, Jim Sutherland makes a few very good points. One is the references to the Demographia Surveys that are limited from a worldview perspective and the other is that he is correct in one very important area……

      Vancouver is cheap compared to many other major cities in the world.

      Not sure why anyone here would find that threatening. He has been objective enough on those few points (although we can all fight him on many other comments he made such as Vancouver’s land shortage etcetera).

      Where the affordability measure is important is most notable in income/home prices ratios. I had discussed this very point on this site in the past when mentioning how out of balance prices were in the developing world and most of Africa.

      Try to imagine for a second that your gross monthly income was 1500 dollars but typical homes cost over a million dollars. You see, that is reality in Nairobi, Addis Ababa, parts of Cairo and other major African capitals. The differentials are stunning and would give anyone here indigestion if they lived over there.

      Of course, there is only a small middle class to speak of in most of those overseas counties. The majority of good property is held by the top 10%, business elite or government insiders. That is not the point though. What is important is that housing is out of reach of most people if they cannot band together to make a purchase collectively.

      By those standards we are indeed spoiled in Canada and have enjoyed an egalitarian system that offers genuine equity to most people who wish to participate (Vancouver being a big exception this past decade).

      So Jims point that foreigners coming here view Vancouver as cheap relative to local incomes has some validity. When they make comparisons to the cost of housing back home this city does not seem quite as forbidding as it does to locals who are more attuned to price affordability measured by one or two incomes spread across 25 years.

      Not entire families going on the hook for a lifetime of indentured servitude

      • Agree with your analysis.
        Thus, RE prices Canada should only be meaningfully compared with other developed countries with similarly developed middles classes.

      • Farmer.

        Let’s remember that the spec mania in Vancouver is in good part a local-buyer phenomenon–immigration is only part of the story. You’ve handpicked a few oddball examples from Africa (how many folks from Africa are immigrating to Vancouver, anyway?) to suggest that Vancouver is relatively cheap. Fact is, housing in Vancouver is among the most expensive in the world–including most developing countries. Your point seems to be, “Suck it up Vancouverites, you don’t have it so bad”. A sort of variation on the “buy now or be priced out forever” and “the man up and get your real estate groove on” mantras.

      • Not at all, ElNinja. I am just pointing out that I think the author has made a valid point. When you start looking at other cities around the world excluding the US and parts of Europe that we typically use you get a different perspective on pricing.

        Hong Kong is also on the list incidentally as are most major Chinese cities. Would you prefer I used them instead? Have we not worn that theme out anyway?

        And what is the difference which cities get picked when the point is only to show that there are places more costly price/income wise than our fair city, not to necessarily showcase their geographc location?

        So it is not about “suck it up, Vancouver” at all. If we choose to keep living in a mental bubble about our circumstances versus the rest of the planet then that just makes us a little narrower….don’t you think?

        The case is not minimized. Just fine tuned.

      • “When you start looking at other cities around the world excluding the US and parts of Europe that we typically use you get a different perspective on pricing.”

        Really? Other than HK and the African cities you mention, can you provide examples?

        Your argument is that Vancouver’s market is not unreasonable / unsustainable, because there are other markets–somewhere in the world–that are even more unreasonable / unsustainable. That’s a bit like calling Nortel a “buy” in 1999, because there were other tech stocks that were even more egregiously overpriced.

      • Ralph Cramdown

        So how does it work in these African cities, Farmer? Do landlords accept very low cap rates, or do multiple generations typically live together in rentals (thus perhaps breaking the price/income ratio’s denominator)?

        Using averages for prices and incomes doesn’t make a lot of sense when neither are normally distributed, but we in North America have an intuitive sense that they relate, somewhat imperfectly, to the medians in a relatively egalitarian society. Once you’re talking about countries with high GINI coefficients, they really make no sense at all.

        And I didn’t think too many of those cities or those properties were comparable in that article. They compared Highest and Best Use properties, the interiors of which appeared generally to be finished to luxury standards, to a land value play in a provincial city?

      • @Ralph….the original article made reference to comparisons to 325 large cities spread across the globe and found that Vancouver did not rank anywhere near the top compared to the group where price to income was concerned.

        That is what I was referring too.

        I actually did not bother with the photo montage here or the cities highlighted in this particular article as they were not representative of the theme of the story we were discussing.

        Those comparisons just reinforce the Euro/American view we hold of what home prices should be worth from our perspective. What is taking place elsewhere though should be instructive in my opinion. I could have selected Mumbai or Calcutta for my example although it would not have made any difference as I had already noted I was making a comparison to the developing world.

        By the way, you got it just right in suggesting it is the numbers of people per household that makes it work elsewhere. Density is a huge factor and it is not unusual for 10 or 15 people to share a residence. Sleeping quarters are very commonly shared by many family members well into adulthood which is a foreign concept in Canada.

        Rents incidentally are insanely low relative to the costs of land and buildings. It almost makes no sense from our perspective. The vast majority of property sales are also all cash deals. There is very little in the way of formal lending or mortgages….nothing in fact if you do not already own property. If money changes hands to be repaid over time (borrowed in other words) it is typically sourced from family members and there are no contracts signed. Just a word of honour.

        I think this is why we still see immigrants in Canada managing to stump up all cash payments for housing that few of us can understand. There is often suspicion about how that is possible but too few recognize that is how it is still done in more traditional societies. It is a form of tribalism in my view.
        ———————————
        @El Ninja. You obviously have your panties in a knot over my comments. Instead of putting words in my mouth why don’t you make an effort to read what was written. While you are at it go back and look at the original article and references to how many cities around the world were in the comparison and how Vancouver ranked against them.

      • Nice dodge, Farmer. Rather than address my comments you resort to tall talk. Guess that shows how strong an argument you have.

      • Ralph Cramdown

        Farmer, I’m embarrassed to say that I skimmed the article and missed the page turn, thus reading only the first page.

        So it all comes down to credit? In underdeveloped societies, credit comes down to collateral, and the only collateral that counts is land. So people will go to great lengths to acquire land, and will then spend generations accepting an abnormally low return on it (even if you can get a family of fourteen to rent your three rooms, their combined income is what it is).

        Our advanced society learned to grant credit based on the four C’s of collateral, capacity (to pay), character (propensity to pay) and capital (skin in the game). Then we found that you could ignore collateral and most people would still pay, then began raising interest rates, creating computer default models, removing the other C’s, creating asset backed portfolios and the rest is history. Easy credit, lots of land and relative shortage of unskilled labour meant that most people could, on one or two incomes over the course of a generation, afford their own homes. Further, coming as they did from Europe, where land was expensive and spoken for, this was the dream of the typical immigrant.

        Now these heathens show up from places where it takes three generations (either serially or all at once) to buy a house and nobody knows cap rate from a crap rate, and start bidding up the land prices by offering to pay cash with the gold bars they pour out of their boots?

        Dammit, the solution is obvious… More microcredit (which relative to their incomes, is just credit). And send over some banksters to teach them about CDOs and mezzanine tranches while we’re at it. And maybe some goats?

      • Life is not that easy for some, Ralph. Credit is very, very hard to come by for most people across Africa. Incomes are also utterly abysmal by any standard you can imagine and yet housing prices are off the charts when you run the ratios.

        It is indeed about credit. There is none available in some places. Even cars cannot be bought by foreigners using national bank loans if they don’t own local property. Like I said…most big purchases (and all small purchases) are done straight cash.

        If you don’t have money you cannot participate. And forget credit cards. There are not any. This might help explain why saving is so valued and it also helps to explain why so many of them are surprisingly solvent compared to North Americans who live day to day on credit alone.

        So it is no surprise that people from other countries will band together (even when they are not related) to build up the fund necessary to buy a first home. It is the power of numbers, trust in your countrymen and organization. They are not put off by prices once the object has been decided on either and naturally homes are highly prized.

        We have quite a different view in Canada that is for sure. We are brought up thinking anyone can swing the financing for a purchase on thier own. “Screw the family if they won’t pitch in….we don’t live near them anyway” is almost a mantra.

        As I said on another thread….I have come to view the high price of Canadian housing as representing a falling living standard as so many sacrifices are now required to participate. We have gotten poorer in real terms even while the value of homes has risen creating the appearance of wealth.

        And how rich are you anyway if you earn a dollar but need a dollar and five cents to get through every single month? Credit is a form of poverty in my opinion too. This is a different kind of poverty but it is no less significant that those surviving on dollar a day incomes but still managing to save a thousand bucks over a few years time.

      • “Our advanced society learned to grant credit based on the four C’s of collateral, capacity (to pay), character (propensity to pay) and capital (skin in the game). Then we found that you could ignore collateral and most people would still pay”
        ————-
        That is a pretty good summary of where we are at Ralph. I appreciate that insight. Indeed all most need to be permitted to borrow is blood flowing in their body and a pulse. Hardly anyone ever considers that credit is a privelege and not an entitlement. But our system is designed to function on easy money now. There is going to be anguish for some as it tightens up and they discover saving is really the source of true wealth after all.

    • Will headline, with your original comment, space889.

  11. Daniel Fontaine’s article in the 24 hours is a must read…absolute perfect take on vancouver

    • “Our jobs and growth plan is based upon condo development and land speculation. However, take that away, and our local economy is as emaciated as your average catwalk fashion model.

      For far too long, we have associated new condo towers with rising property values. In other words, our region has convinced itself we don’t need jobs to increase our personal wealth — we merely need a hot property market.

      It is painfully obvious we have lulled ourselves into believing we have a “real” economy. The sad reality is we are only one real estate crash away from finding out that we don’t.” – DanielFontaine/24HR OpED

      http://tinyurl.com/dygqny7

      [NoteToTed/Ed: Mr. Fontaine would appear to have developed a 'somewhat' harsher view of the 'ecosystem' since his days as ChiefOfStaff for former VancouverMayor SamSullivan. Hey! It's SUNNY! I'm OuttaHere!]

  12. are they on a Facebook – this guy Allan Hoegg and this company Invis – Team Rob Regan-Pollock mortgage brokers?

  13. More rentals coming on the market then I’ve ever seen before.

    I did a Craigslist ‘vancouver’ rental search (seems to include other cities though) to see what’s available out there. 10 pages of 100 listings each on March 28 alone:

    http://vancouver.en.craigslist.ca/search/apa?query=vancouver&srchType=A&s=900

    1000 units available to rent in 1 day, Wow!

    • Ditto for Comox Valley – Mar. 27, 27 rental listings, x40 (population ratio) and you get 1,080. Like Vancouver, some out of area, but still a very large number for such a small market.

    • To give some idea of how bad the RE market here is, I look at MLS inventory increase. March 1 to 29, 880 to 945, or 65, and again adjusted for population ratios, an increase of 2,600 units! Far, far worse than Vancouver.

    • Vancouver Hipster

      Sounds counter intuitive
      Can someone explain why rental availability goes up if the homes are not selling?

      • The idea is that some properties held empty (speculating upon future price gains) start coming onto the market as rental properties if they cannot be sold for the ‘right price’.

  14. Other notable… parents bending over backward to help kids stay in otherwise unaffordable Vancouver.

    • Agreed.
      That way, when the crash comes, an entire extended families RE holdings go underwater, rather than one home being battered with a price drop. Multigenerational wealth destruction.

    • Re. “parents bending over backward to help kids stay in otherwise unaffordable Vancouver” – I didn’t get it what exactly did the parents do – they have taken a mortgage for the kids home themselves or they shared the mortgage or what?

      • They took a mortgage on their own home, gave at least some of the proceeds to the children, thus allowing the children to put a downpayment on their own home.

        So, from one property being 100% paid off, we now have two properties both leveraged to RE price movement. Nice, eh?

  15. Nothing to see here.
    “Readership” of our two daily pinnacles of the community continues to rise. It is only the paid subscriptions that are dwindling. Hard times for print media.
    Long ago there were two types of employment considered safe in a recession: driving a bus, and printing newspapers.
    Unemployed folks had to buy a paper for the help wanted ads. No more.

    • Ralph Cramdown

      There’s still money to be made in the business. But not in those two properties, unless you fancy a punt on Postmedia being bought by the more famous but less successful of the two Canadian press barons who go by the name of Black.

      • Industries in which I am continually amazed that people try to make money:
        1. newspapers
        2. restaurants
        3. airlines

      • Ralph Cramdown

        Let’s just say that I wouldn’t want to own the kind of newspaper that I’d want to read, or the kind of airline that I’d want to fly on. But the other kind can be lucrative.

  16. Not much of a name...

    @vreaa

    “2. for the journalist’s ineptitude or, alternatively, collaboration”

    The author of the article works for Blue Sky Communications…a pr firm. So yes, collaboration.

  17. It’s the perfect storm: real estate affiliated industries desperately seeking positive mindset, along with CanWest which is desperately seeking revenue….

  18. pricedoutfornow

    I don’t know why people who are retired, or nearing retirement think that it’s perfectly acceptable to take out a huge mortgage to fund this retirement. It’s nuts! My own parents are in their mid-60s, have no debt and moan that they “only” have a few hundred thousand dollars socked away. I tell them how lucky they are, many of their fellow boomers are drowning in debt (it’s true!) and I don’t think the situation is sustainable. Soon, these boomers will be sitting in a house with a pile of debt, that they can’t sell for what the outstanding debt is and wondering where did they go wrong? Everyday when I walk my child to daycare I pass a house that’s been for sale for over 6 months (longer, I’m sure, that’s just how long I’ve been walking that route)-these lovely older people (I’ve seen them a few times, also their name is on the door so I know they are not HAM and the MLS ad says the house has been lived in by same owners for 40 years) are trying to sell this house for just over $1 million. It’s on a busy street, and somehow someone has convinced them that this is what it’s worth. A million bucks! You can’t even get CMHC insurance for that, so what young family is going to buy it? And apparently HAM has no interest. So it sits and sits, never dropping the price. And everyday I wonder why they don’t just drop the price and go. But you never know, they could be the victims of debt as well, and can’t sell for less than that.

  19. One of my old high school buddies finally got her mother to sell the family home in Kitsilano – sold for over $1M, monies realized $185,000. Home equity loans and “helping” out the kids does take a toll.

    • Ralph Cramdown

      Man alive, depending on the details of her age and the debt, it may just have been better to keep the place and let the estate stiff the creditors (as it were).

      • The daughter, four times married, living in a third world Caribbean town and now too old to continue her pursuit of a singing career, wanted whatever there was left before her deadbeat brother could get it. Mom, by the way, was 80ish and moved to the tropics with her daughter where she lasted about six months.

      • That’s pretty harsh ex-kitsie…i hope the old lady went peacefully on her own term….

      • I’m referring to the people in your story, not you ex-kitsie!

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