What’s Another $15,000 On The Visa? Nothing! – “Friends of mine just bought a Burnaby condo. They told me that they have nothing left over at the end of each month.”

“Friends of mine just bought a Burnaby condo. The realtor told them what a great deal they were getting, then pointed to the comparable unit in the same building listed 50k higher, and expressed his frustration with the owner (also his client): “see – their place has been listed for a year but they will never sell, because they refuse to lower their asking price. You can’t work with them. They will stay unsold for years.” He then said that he liked working with the seller of the unit my friends bought, because she could be talked down to a price that would sell.” …
“As for my friends who bought… I shed a tear for them. They just moved from a $900 co-op unit into a $440k mortgage at 1800/month plus 300 strata fees. They told me that now, there is nothing left over at the end of the month…. holidays will be camping trips to kelowna. And, the husband, who was heavily persuaded to buy by the wife, said that he couldn’t believe how much all the house stuff cost: $1,000 to paint the unit; $500 to have screens put in, some mirrors changed, bathroom stuff… it’s all money, money money, he said. And then saddest of all – he said that “I used to hate debt – I would do whatever it took to not spend on credit cards I couldn’t pay back right away. Now, I am $440,000 in debt. So what is another $15,000 on the Visa? It’s nothing. I just put whatever on the credit card now.”

TPFKAA at VCI 28 Sep 2012 at 10:41 pm and 10:49 pm

70 responses to “What’s Another $15,000 On The Visa? Nothing! – “Friends of mine just bought a Burnaby condo. They told me that they have nothing left over at the end of each month.”

  1. “F***in’ Hell.” As TheLimey would say… Should’a bought bought a distressed PictureHouse instead [and immediately flipped to a WestSide Developer]…

    [G&M] – Last PictureShow at ThePark

    …”Although the Park faces no immediate peril, Mr. Schein is not optimistic. “Our landlord has been very good to us, but at some point I’m sure he will tear down the whole building, the way a developer is going to tear down the Ridge,” he said with a wistful smile.

    Should that happen, the Park on Cambie Street would join a lengthening list of recently extinct theatres: Van East, the Hollywood, Oakridge cinemas, the Denman (soon to become a Dollarama store). This week, the Granville 7 complex – anchor of the Vancouver International Film Festival – confirmed its closing in early November. The Ridge will almost certainly follow some time next year.

    “One tries to be positive,” said VIFF director Alan Franey, who learned of the Granville 7’s pending demise just a few days before Friday’s closing gala, “but for those of us who value these things, every bit of news like this, we have to be a bit sad about, and worry about.”…

    http://tinyurl.com/8aqfj34

    [NoteToEd: A Dollarama. A F***in’ Dollarama.]

  2. Where's the HAM?

    We’ll see people like these crying on GlobalTV very soon. And then Vancouverittes will see that good hard working “Canadians” are the ones who drove up the bubble and were hurt by it popping. Not flat faced slant eyed “foreigners”.

    I wonder if that racist realization will change the schadenfreude to pity?

    • Americans haven’t spent the last five years saying to themselves and each other “I was an idiot to pay what I paid for this house, and to extract so much equity instead of paying it down.” It’s all been put at the feet of the subprime lenders who sold their crafty option ARMs to some other guy, on some other street, and woe is us for getting dragged down with it.

      People aren’t going to be blaming themselves or their neighbours here, either. It’ll all be about Chinese money laundries and those greedy Eastern banks. Mark my words.

      • Bang on. The real tragedy of the Great Financial Crash of 2008 is that we’ve learned nothing from it. The vast majority of people, in the US and elsewhere, believe that the whole fiasco was caused by a handful of Wall Street crooks. And if it weren’t for them, everything would have been fine. That the “banksters” were enabled by the willingness of the masses to take on enormous mortgage and consumer debt never seems to occur to anyone.

      • Where's the HAM?

        “Chinese money laundries and those greedy Eastern banks.”

        Phase 1 – blaming Chinese money is already in affect, and it looks like Phase 2- blaming greedy Eastern banks has already started. Fucking Vancouver and it’s colonial mentality.

        Toronto bankers put the squeeze on Vancouver real-estate developers
        http://www.straight.com/article-805306/vancouver/real-estate-squeeze-play

      • That the “banksters” were enabled by the willingness of the masses to take on enormous mortgage and consumer debt never seems to occur to anyone.

        To most it’s offensive or politically incorrect. They either participated and want to put the blame for their own stupid actions on an easy target OR they have a political agenda that requires tunnel vision.

      • Renters Revenge

        “Vancouver and it’s colonial mentality”
        Ya I saw that last night and had exactly the same thought.

      • Ralph Cramdown

        http://www.straight.com/article-805306/vancouver/real-estate-squeeze-play
        Nice find! VREAA should highlight that one. I was a bit surprised at the banks’ presale requirements, though. Here in the Big Smoke, I think developers have to sell 70 or 75% of units before they get an advance to start digging the hole. Also, Toronto planning requires a certain % of space dedicated to amenities in every condo development, forestalling Vancouver’s “investor oriented” projects with few common amenities. In fact, developers here complain that, for larger projects, the amenity spaces required are so vast that they add to monthly maintenance fees (55-70 cents/month/sqft is common here for new builds).

        But how about this perspective from new condo salespeople in Toronto (from http://www.yourhome.ca/homes/realestate/article/1266824–developers-are-quietly-putting-condo-projects-on-the-shelf ) —
        ‘If investors are taking a breather, builders should turn their focus back to end users, Lyon stressed. “The industry has almost been disrespectful of the end user — the first-time buyers and others — in recent years,” he said. “By the time they got to the sales office, the sold board was full or they just couldn’t get in.

        “The industry has got to get back in touch with that original core market.”’

        No! She didn’t dump me, I dumped her! I realized how flighty and stuck-up she was, and that you were the right one for me all along… “Taking a breather” is just what the PR flack said we should say.

    • lol, but let’s not forget that there are happy locals (add color/racist remark) that sold/flip their house to them flat faced slant eyed “foreigners”
      🙂

    • Denying that Chinese buyers were a large factor is as dumb as blaming the Chinese investors for the complete mess. They were one important factor in the frenzy.

  3. 440k mortgage, and payments are only 1800/month. So their rate is only 1.53%. Hmmm….?

    And if their housing expenses are 2100/mo and they are left with nothing by the endo of the month… perhaps they shouldn’t “own”…?

    $15k on credit card – that’s another $240/mo in interest only…

    But the pride of ownership must be worth it…

    Looks like a family of winners…

    • It’s fun to spend what’s not yours. If you default, you don’t have to pay it back. Great plan!

      • You can also blame the banksters for your “misfortune” and “occupy” the park at Vancouver Gallery.

    • Do I cry when a baby wildebeest is eaten by a lion? Yes. But it’s still none of my beeswax.

    • yeah I didn’t crunch the numbers, but thought it sounded low. It’s likely a VRM and the 440k may have been before downpayment. He said they “didn’t put much down”. The payments could be 18XX. When a dude is pouring his heart out, you don’t stop him to ask for the figures to the nearest ten dollars!!

      (Is a rate that low possible? I know some people are on VRMs at 2 and a bit %.)

  4. Please tell your friend not to get too much on the credit card debt. This could become a begining of the credit death spiral especially if they are young. Even sell if they have to get out of debt.

    • The dude seems pretty down, I don’t think he has much of a choice. It came as a shock to me that they bought; he and I had had bearish conversations in the past. I just never spoke to the wife about it. It seems a unit came up in the building she always wanted to be in, and they jumped on the perceived discount…. i know that his job became secure and full time two years ago, so it’s likely they had just scraped enough of a d.p. together for the first time. I don’t know if family assistance was involved.
      They are not that young.

  5. $15K on the VISA? Pffft, go for $100K directly onto the HELOC:

    http://www.equitylinevisa.ca/product_information.html

    Yes, this is a Canadian product…I don’t think the US ever got to this stupidity level!!!

    • Holy crap, that’s one serious asset-stripping Visa/HELOC.

      Initial setup fee: 3% of credit limit. Wow, so if you’re approved for $100K in HELOC credit, they take a $3,000 cut right from the start, before you’ve even borrowed a penny!

      And those interest rates! Crazy-high for a *secured* line of credit.

    • That’s NASTY!

  6. I wonder what happens when it all come crashing down? Is the wife going to stand by her man or blame him for everything and dump him?

    • “the wife going to stand by her man”

      Never mind how outdated this line is, but anyways, it sounds like it might be the other way round. First clue: “And, the husband, who was heavily persuaded to buy by the wife, said that he couldn’t believe how much all the house stuff cost”

      • There is an alternative scenario, Dr. J… She declares bankruptcy… He starts MoonLighting for ‘UncleVladimir’… but we before we get down to the SeriousMuckRaking… Here’s your Quote ‘O The Day!, DearReaders….

        “We had four kids, a mortgage, and were struggling, I thought, to make ends meet.” – Jennifer Lee Delisle

        [G&M] – Bankruptcy Kept Delisle’s Espionage Secret from Ex-Wife

        …”The couple separated in the spring of 2008, and SLt. Delisle assumed their remaining credit card debt and a consolidated loan, according to court documents.”….

        http://tinyurl.com/8fcvtsq

        [NoteToEd: You will note that, post-Perestroika/Glasnost… even ‘UncleVladimir’ has jumped on the ‘austerity’ band wagon… TskTsk. Box5 is no better, however, and probably a good deal worse… PerfidiousAlbion: http://tinyurl.com/8ohkr3z ]

      • [NoteToEd: F***in’ Hell… It’s Friday. BonusHumour Post… NoteToSelf: Never buy a condo from a Leprechaun in a Balaclava holding an Armalite.]

        [UK Guardian] – Tom McFeely: from IRA hunger striker to bankrupt millionaire property developer – To some he’s a hero. To others he represents everything that’s wrong with modern Ireland

        …”As a British citizen I have always objected to being forced into bankruptcy in a foreign jurisdiction,” he informed the high court in London in June. “I maintain this is a breach of my human rights.”

        The foreign jurisdiction in question is Ireland, where hollow laughter greeted McFeely’s sudden declaration of Britishness. After all, this is a man who once believed so fiercely in his Irishness that he fought in the IRA. He refused to recognise the British court that sentenced him in Northern Ireland in the 1970s, went on hunger strike and was prepared to die in the notorious H blocks in 1980. He later broke from Sinn Féin to join the League of Communist Republicans. Then he became a multimillionaire property developer.

        McFeely is bankrupt in Ireland now and will be out of business for 12 years. He is embroiled in numerous other court proceedings. His Victorian mansion on one of Dublin’s most expensive avenues has been repossessed by the state. He says it’s because he’s a “Nordie”; that he is a victim of southern Irish prejudice against northerners, exacerbated by the global economic crisis. Few, however, see him as a victim. McFeely needn’t worry about a roof over his head. His creditors, on the other hand, include several hundred people who bought apartments from him in Priory Hall, a development deemed so dangerous it was evacuated with fire crews standing by.”….

        http://tinyurl.com/9r6jbrz

      • “Bankruptcy Kept Delisle’s Espionage Secret”

        Wow, Nemesis. On that subject, courts have been testing a new angle for prosecution (and defence):
        http://www.mcmillan.ca/Contrived-Ignorance-Wilful-Blindness

      • And ‘wow’, too, regarding the remarkable Irish story.
        As bad as we expect it to get in Canadian RE, we don’t anticipate seeing anything quite that bizarre and multifaceted happening here. But perhaps we just can’t imagine it yet, and will be proven wrong.

  7. Stories like this make me really glad my spouse and I are on the same page when it comes to the importance of living within our means. That means that buying in Vancouver is out of the question because, if we did, we would have no money to save for retirement, RESPs, vacations, insurance and unforeseen hard times.

    It would be really hard to be with someone who didn’t share the same outlook on debt. I just wish we had a $900/month co-op!

    • West Coast Woman

      Try Kanata co-op in Champlain Heights, built in the 1970’s. Lots of 2,3 and 4 bedroom townhouses. I have no idea what they’re going for now or if they have a waiting list, but it is one of the few co-ops that actually own their land.

  8. Hey how about some sympathy here? Not everyone can get these baller 80k LOCs. The 99% have to rely on credit cards.

    • My lack of sympathy for this family isn’t that they’re putting stuff on Visa– it’s somebody’s choice whether to borrow money to finance purchases. It’s that they bought a place so expensive that their mortgage takes up everything, and they didn’t leave themselves a buffer of cash savings, and the natural result of this is that you’ll slowly dig yourself deeper and deeper into a debt hole.

      If the mortgage takes up all of your income, and leaves you with nothing at the end of the month, then you’ve got no ability to save. No meals out, no movies, no vacations (except camping).

      If you didn’t leave yourself a cash buffer (ie, you put ALL your money down), then you’ve got nothing to fall back on if you run into a hard time (stove dies, car breaks down, plumbing problem, etc.).

      And since you’ve got no ability to save, you can’t build up that cash buffer. So instead, you’ve got to scrimp and save everywhere you can to build up a buffer, or else you go deeper into debt every month (the Visa syndrome).

      Several years ago, I lent a large sum of money to a relative who had a temporary cashflow problem. Basically, all our liquid savings. My other investments were tied up. Oops– my wife and I had to scrimp and save and delay payments for as much as we could for a couple of months, until we rebuilt our cash buffer. We did dip slightly into the Mastercard. But it was all paid off after a month or so, when we had a cash buffer again. And then my relative paid back all the money. But I wouldn’t want to live in that scrimp-and-save mode for years on end.

      • GoodnessGracious, “M”, I seem to recall discussing this at the AfterHours ‘Club’… I thought we’d agreed that, AllInAll, Camping was JollyGoodFun!?

        [NoteToEd: Notwithstanding Fleming’s literary artifice, it’s actually “C”… GreenInk. Naturally.]

    • Hey how about some sympathy here? Not everyone can get these baller 80k LOCs. The 99% have to rely on credit cards.

      BS

    • 0% for 6 months:
      http://www.rbcroyalbank.com/personal-loans/myproject-mastercard.html
      1.2% for 10 months:
      https://www.applyonlinenow.com/CACCapp/Ctl/entry?sc=CMUM&lc=en_CA

      What’s wrong with credit cards? Teach the banks a lesson by showing them what happens when they offer smart people free money. Get ballin’

      • “showing them what happens when they offer smart people free money”

        Um… yeah… only thing is they sorta make money no matter what. Or do you think businesses collectively eat that 2% transaction charge?

      • Screw the plastic… Just ‘borrow’ BR’s Shih Tzu for a few days. Worked for Christopher, Sam and Colin!

      • Ralph Cramdown

        Or do you think businesses collectively eat that 2% transaction charge?

        You do not, DO NOT, use these cards for purchases of stuff. On the first day you receive the card, you write a great fat cheque for the entire credit limit* to your brokerage account, put the card in the file folder with the rest of the account info, and put a notation on your calendar for when the interest free period runs out. Every month make the minimum payment. A few days before the card rolls over to regular rates, go the the bank, ask for the payout amount, and pay it all. If you use the card for a mix of investments and stuff, CRA will say you’re just a know-nothing schlub and disallow deducting the interest costs and fees.

        This isn’t a get rich quick strategy. But you should be able to make a thou or two for the price of an hour or two of your time, plus the happiness that comes with “Bank Error in Your Favour.”

        * Keeping in mind that credit bureaux like to see that you’re not using nearly all of your credit, so you’d better have other lines with thousands unused.

      • Ralph Cramdown

        Or do you think businesses collectively eat that 2% transaction charge?

        At the risk of belabouring an off-topic point: Businesses are free not to accept credit cards, except that then the whine becomes “handling large quantities of cash is risky and expensive, and besides, we’ve found that a lot of our customers don’t HAVE any cash.” Fine, set up your own credit department (can be as simple as a sheet of paper taped next to the till) and offer known customers goods on the tick while strangers pay cash. “But we’ve got cash flow problems and collecting receivables is a hassle.” Also note that the big department stores all had in-house credit going back a century, but sold the business off to the banks. I think retailers are getting a pretty good deal at two percent and, if they don’t like it, they should group together and negotiate en masse rather than paying the CFIB to issue whiny pressers about bank fees, which will get them nowhere. That is all.

  9. holy %(*&$! … anger, rantage, racial slurs from, what? 50 yrs ago? … just the kind of $h!+ that gets brewed when nem starts the page with the F-word … pffft! … http://tinyurl.com/2bcqwz
    aside: my research has shown that masturbation is effective anger management … 3 hrs of therapy is sufficient to defuse 99% of situations … in a just world, angry people would be locked into single rooms with adult fare, lubricants and premium quality cotton hand towels

  10. Interesting comments from one of our best friends today. They had a realtor “evaluate” their house for sale. Looks like my constant bubble talk is “perhaps” getting thru ? You guys may remember that they were featured in my post a while back, about the wine soaked Calgary dinner party I attended at their place a few months ago, where RE was the topic of discussion over cocktails.

    My wife said she told her today that she thought her house would come in at $1.2MM +……..and she was really pissed when the realtor told her bluntly that it would not sell at over $999K, as nothing was moving over $1MM, and that at under $1MM it would take 6 months if she was lucky. Now she doesn’t want to list as the market “will come back” and RE only goes up. Well, they owe about $200K……..and in 5 years from now it will be paid for, but probably only worth $500K……………..

    They are my dear friends and a hit of that magnitude would not dent their net worth by >10%……..but still……..”a fool and there money”…………

  11. Dimitri Tishchenko

    You guys might appreciate this Reddit thread from 10 months ago. The top rated comment is especially hilarious.

    http://www.reddit.com/r/vancouver/comments/n5xsy/vancouver_real_estate_can_someone_explain_to_me/

  12. Dimitri Tishchenko

    I could have been this poor bastard if I hadn’t found vrea, greater fool and vancouver condo info. I managed to convince the significant to wait. You really are making a difference in people’s lives with this blog. Keep up the great work.

  13. Hi VREAA, you may be interested in page 21 of the Georgia Straight this week, Real Estate article, Charlie Smith, gets interesting about half way down the first column.

  14. 4SlicesofCheese

    This sounds alot like friends I have,
    Bought bby townhouse for 430k
    7% down
    2k/month mortgage.
    250 strata
    1k/month daycare
    Single income
    Scary.

  15. I know there are tons of 2 BR condos in Burnaby but wondering if this could be the one sold by my sister-in-law and her husband. Identical unit in their building sitting for prolonged time for 50K more.

    Sad thing is that they went and bought a 799K house in Richmond underneath a flight path. They make combined about 140K, new baby, husband has big consumer debt. She often complains to my wifre about him and his spending habits. Sounds like cash is going to be tight. Lucky for them his parents are rich so worse comes to worse, they can get bailed out by the Bank of Mom and Dad.

  16. Give me a break Georgia Straight…..over leveraged Torontonians were using the same Toronto banks as Vancouverites….So Vancouverites can’t accept responsibility for paying $ 1,000,000 bucks for thousand square foot a crack shack!

  17. I have had Vancouver friends give up on ever buying a house and instead opt to buy nice luxury cars. I think the devaluation of the value of money and hard work is the biggest problem of the bubble.

  18. Pingback: “One of our best friends thought her house would sell at over $1.2M. She was really pissed when the realtor told her bluntly that it would not sell for over $999K, as nothing was moving over $1M, and that at under $1M it would take 6 months if she w

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