Shaughnessy Flip Attempt Targets Gain Of $1.7M In One Year

1656 Laurier Ave, Shaughnessy (Vancouver West-side)
6,687 sqft 1925 SFH on 106×200 lot

Sold 2011 $7,000,000 [thanks to jj for final sales price info]
Now listed for $8,680,000
Same realtor.

Anybody know more of the story here?

[hat-tip Beth Seaton]

33 responses to “Shaughnessy Flip Attempt Targets Gain Of $1.7M In One Year

  1. It sold for 7,000,000 in 2011,according to a quick google search. They will be lucky if they break even…

  2. Aren’t there tons of stories like this in Shaughnessy?

  3. As a former realtor for 27 years, you’d think the agent would stage the home? It looks awful. This place is going nowhere. What justifies the million dollar increase? The furniture removed?

  4. Naked Official 9000#

    Loyal cadres!

    The price is justified because of the 8s!

    Questions are disharmonious!

    • There was a price drop today here in The Big Smoke — they took out an 8 and added a 4. A little knowledge is a dangerous thing.
      Nov 25: $1,488,888
      Nov 27: $1,448,888
      That’ll help!

  5. There are so many like this with no renovation / expansion etc and million+ increases from last year. Here are a few obscene ones

    * V958898 was bought for $8 million last year and is now listed for $12.8 million
    * F1221641 is a white rock building lot purchased for $4.08 million last year and relisted for $6 million
    * F1209730 is another one in white rock purchased for $3.4 million last year and relisted for $4.5 million

    • Naked Official Overdrive

      Loyal cadres, it is important to steep oneself in the local culture of this treaty port!

      Assimilation was never the goal, but rather, to rent the land back to them! Sins of the father be damned! Keep your fingers crossed when you are made to pledge loyalty and fielty to the Windsors! Their kind is responsible for the humiliation of the motherland! Turnabout is fair play! (even if it IS 150 years later and these british colonialists can’t remember 15 minutes ago)

      We will liberate this land like Tibet!

      As glorious Hu has told us, go deep into the realty! Err… Reality, sorry.

      A million is a nice, round number – every loyal cadre deserves a million!

      • Cyril Tourneur

        Hey, put some clothes on would you! And slow down!

      • This song now reads like that scene in the Mike Myers comedy where Dr Evil returns from suspended animation and holds the world hostage for ‘TEN MILLION DOLLARS!!!” (or similar order of magnitude number) and everybody laughs…

        Q: What were people in this 2010 Vancouver audience thinking when he sang “If I had a million dollars/ I’d buy you a house..”?
        A: Perhaps, but not much of a house. And definitely not on the West side.

    • Thanks, observer/vancouverpricedrop -> Your monitoring of the situation is proving to be really useful.

  6. Isn’t it fairly easy for the buyer/their agent to get the details on the last sale? If I was shopping for a home, I’d laugh at a seller like this.

    • You wouldn’t if you were swept up with the idea that next year there would be bidding wars at a million over the current ask!!
      (Just kiddin’, but you get the idea… this is the mentality that drove sales up to this point… now running out of oxygen).

    • 4SlicesofCheese

      They dont even have time to get off the yellow copter let alone do a house tour, these are busy people my friend.

  7. The more things change the more they stay the same….

    “During the depression, when many Shaughnessy residents lost their homes, the area was referred to as Poverty Hill and Mortgage Heights.

    In 1939, the spectacular “Glen Brae” sold for $7,500, although it had been appraised at $75,000 in 1920. It was used as a kindergarten and nursing home before being transformed into Canuck Place, a hospice for children.”

  8. There are also examples of over 90% price corrections during the bubble collapse of 1913-1915.

    Vancouver has a long and infamous history of real estate booms and busts.

  9. They’re still out there!!! Just had a realtor knock on my door with an Asian lady who doesn’t speak English, who has a client that wants to buy on our block on the wsetside. The realtor obviously hasn’t done his homework, as the house across the street was for sale for 6 months with no offers, so they leased it out a few weeks ago. You couldn’t write this stuff!!!!!!

  10. The sad thing is many, many, many people have gotten rich in the last few years flipping. Now they are caught and can’t sell and will need to take a loss. It’s hard to imagine how you can imagine real estate prices going up forever, like there is an infinite amount of offshore money that will never dry up, no matter how expensive the real estate. (Local money of course can never support the prices in this city).

    We saw that in NYC in the 80s when the Japanese economy was hot hot hot and the Japanese were buying up all the NY real estate. The Japanese economy has been in the tank for 20 years+ now and it still hasn’t recovered and money has long since stopped. The same thing can happen to China too (and signs are the Chinese economy is sputtering), especially with the demographic trend in that country. Money from China drying up, who would’ve thought.

    • As a clever guy I just recently talked to opined, betting on a timing window for China’s rebalancing is a tough call. I would not bet on there not being a crash, but I also wouldn’t bet the farm on there being one in the next 5 years.

      • Naked Offiial rallies the troops

        Loyal Cadres! Gaze upon this pathetic propaganda hit piece against the glorious integrity of our beloved middle kingdom! We must push back against this disharmonious editorializing!

        Private companies in China are increasingly turning to “shadow lenders” to seek loans. The WSJ’s Dinny McMahon reveals why some commercial banks may be at risk if defaults increase.

        TAIYUAN, China—Facing the loss of his business when the government decided to nationalize small coal-mine operators for safety reasons, Wang Pingyan went on a buying binge.

        The farmer-turned-entrepreneur figured that to stay in business, he had to get bigger, say former employees and others familiar with his business. Since state-owned banks were reluctant to lend to him—a common problem for private businesses in China—he turned to private investors. In total he raised about 5 billion yuan ($794 million), according to these people.

        Enlarge Image

        Bloomberg News
        Some coal-mine owners in China took on debt to expand and avoid nationalization. Above, workers in Shanxi.

        Three years later, Mr. Wang is in financial trouble. The price of coal has plunged by 20% since early last year, causing him to default on several of his loans and landing him in detention.

        Even though state banks provided no direct funding, they aren’t necessarily off the hook. The biggest loan to Mr. Wang was 3 billion yuan and came from China Credit Trust Co., one of China’s biggest nonbank providers of credit. The firm raised the money from customers of China’s largest bank, Industrial & Commercial Bank of China Ltd. 601398.SH +0.26% ICBC acted as an agent for China Credit.

        Mr. Wang couldn’t be reached for comment. A representative of his company, Zhenfu Energy Group, declined to comment.

        ICBC said in a statement that according to Chinese laws, agent banks “are not responsible for investment risks” associated with those private loans. It also said the bank has “strictly implemented” its agent agreement with China Credit.

        Mr. Wang’s case highlights the hidden risks to banks from their links to China’s fast-growing “shadow-finance” industry, a term for all types of credit outside formal lending channels.

        Shadow finance in China totals about 20 trillion yuan, according to Sanford C. Bernstein & Co., or about a third the current size of the country’s bank-lending market. In 2008, such informal lending represented only 5% of total bank lending.

        The sector is lightly regulated and opaque, raising concerns about massive loan defaults amid a softening economy, with ancillary effects on the country’s banks. Banks often work with private lenders by selling loans to them or marketing investments on their behalf for a fee.

        “Regular banking and shadow banking are not isolated from each other. Many activities in the two systems feed into each other, and could influence each other if things start to deteriorate,” wrote Xiao Gang, chairman of Bank of China Ltd., in an editorial in the China Daily newspaper.

        Although China Credit has the legal responsibility to repay investors, according to Chinese law, “for reputation’s sake and potential social stability reasons, a portion of these loans can be banks’ contingent liabilities,” said David Cui, China strategist with Bank of America Corp.’s BAC -1.59% Merrill Lynch unit.

        Others agree. “Banks might be held liable if bank representatives didn’t adequately evaluate the products’ risks for their clients,” said Peng Junming, a former official at the People’s Bank of China who now runs his own investment firm, Empire Capital Management LLP.

        How Mr. Wang’s situation gets resolved will help set a precedent for how informal loans get worked, analysts say.

        Mr. Wang, who is in his early 40s, went into the coal business a decade ago. According to former employees and associates, Mr. Wang’s troubles began in 2009 when the government in northern Shanxi province, responding to several mining accidents, launched a campaign to force small coal mines to shut down or sell to state-owned enterprises. Only operators producing three million metric tons of coal annually would be allowed to stay in business.

        Enlarge Image

        Bloomberg News
        Workers in Shanxi province, where one-third of China’s coal reserves lie.

        Over the next three years, Mr. Wang amassed about 5 billion yuan of high-interest-rate debt from private investors and lenders to make acquisitions, say people with direct knowledge of his finances. His company currently has five coal mines and one coal-washing plant.

        ICBC, acting as China Credit’s agent, recommended the investment to its wealthy customers. It offered returns of between 9.5% and 11.5%—much higher than bank deposit rates. A prospectus issued by China Credit included standard disclosures on risk, but offered no detail on Mr. Wang’s business and financing activities, people who have seen it say.

        Assets at Mr. Wang’s company were valued at 6.4 billion yuan as of the end of 2011.

        “Nothing looked wrong when my ICBC manager recommended it to me,” said one investor, who said he bought the minimum 3 million yuan tranche.

        China Credit in June said Mr. Wang’s company had been sued three times in the second quarter, “all because of off-balance-sheet fundraising from the private sector.” China Credit said Zhenfu didn’t disclose those debts in its balance sheet.

        China Credit added that it is cooperating with regulators in their probes into Mr. Wang’s financials, and that it “will resort to legal means if necessary” to protect investors.

        One of the private lenders who sued Mr. Wang is Gao Tanlin, who runs a property-development company. “He came to me for money to make acquisitions,” Mr. Gao said. “I’ve known him for a while. He’s credible, so I lent him 100 million [yuan].”

        The loan from Mr. Gao has an annual interest rate of 36%, more than four times the official lending rate in China. Early this year, the 100 million yuan loan came due and Mr. Gao went to Mr. Wang to ask for his money back. “He said he has no money,” Mr. Gao recalled.

        Mr. Gao sued Mr. Wang in a local court in May. The lawsuit helped trigger concerns over Mr. Wang’s ability to pay off the 3 billion yuan investment arranged by China Credit.

        When the tide goes out..

  11. “I also wouldn’t bet the farm on there being one in the next 5 years.”
    Have you looked at recent credit growth vs GDP growth for China? Epic debt bubble…makes me want to buy the farm.

    • Is it possible for China to keep GDP growing at 7%+ for the next five years? I think so. I don’t think it’s likely they avoid a big GDP hit in that time, but I’m not going all in.

      If you have the conviction you state, you have only one trade to make over the next 5 years. Good luck, I’ll be watching for you in the credits.

  12. Terminalcitygirl

    I’ve always kinda suspected that many flips like these are all about money laundering- drug dealers and other nefarious sorts buying and selling to their “business associates.”

    • Not on the Boat.

      Why use houses when art and other way more liquid and portable assets exist?

    • Funny you should say that, TCG… The ‘Nefarians’ of this world have a long history of involvement in RealEstate… Here’s just one HeadLine from today’s ‘flow’ which may illuminate the matter for you [and following this comment – I’ll link to some resources that you may find interesting… I know Dr. J certainly will.]

      [UK Independent] – Swiss prosecutors say death of Russian whistle blower will not derail huge fraud investigation

      …”Prosecutors in Switzerland say the sudden death of a Russian whistle blower who was helping them uncover a money laundering network will not derail their investigation.

      Alexander Perepilichnyy, a 44-year-old businessman who left Russia three years ago, was found dead outside his luxury mansion on an exclusive private estate in Surrey two weeks ago.

      The Independent revealed today that he was helping investigators uncover a network of Swiss bank accounts that were used by Moscow tax officials who became incredibly wealthy in the immediate aftermath of an enormous fraud that cost Russian tax payers £230m.”…

      [NoteToEd: I haven’t practiced the DarkArts – officially – in more than a decade, but I can reliably inform you that ‘real property’ is a preferred medium of reaggregation/exchange/concealment of illicit funds… and that, much like certain ocean currents, illicit GlobalFlows frequently result in curious local ‘eddies’. Now, if only I could convince Prof. Wedel to stop calling them “Flexians”.]

      • Transnational Criminal Organizations, Cybercrime, and Money Laundering: A Handbook for Law Enforcement Officers, Auditors, and Financial Investigators
        James R . Richards
        CRC Press 1998
        Print ISBN: 978-0-8493-2806-0
        eBook ISBN: 978-1-4200-4872-8

        Anti-Money Laundering Literature Search
        Control & Investigation
        World Bank Institute

  13. At the severe risk of ‘DeadDonkeyFlogging’ [and today’s last on this theme]… the following piece is instructive as regards the ‘rebound’ in Dubai’s sagging property markets…

    [AlJazeera] – Report: Kabul Bank lost $900m in embezzlement

    …”A new report commissioned by the Afghan finance ministry says deliberate deception and systematic failure led to the embezzlement of more than $900m from Kabul Bank, Afghanistan’s largest bank.

    The report, leaked on Wednesday, also says the scandal, which saw a small group of well-connected Afghans become extremely wealthy, will cost the country an estimated five per cent of its GDP.

    Among the allegations facing 22 people put on trial are fraudulent property deals, massive off-book loans to officials in the government of Hamid Karzai, the Afghan president, and loans to fake corporations.

    The Independent Joint Anti-corruption Monitoring and Evaluation Committee, which conducted the investigation, says airline food trays were used as one means through which $861m was smuggled out of the country and into banks in more than two dozen countries.

    According to the 87-page report, 10 pilots working for Pamir Airways, which the bank had a stake in, were paid annual salaries of over $300,000. These costs, dated from March 2008 to November 2010, were categorised as “pilots of cash delivery”.”….

    [NoteToEd: FoodTrays. Next time I fly the FriendlySkys of KabulAir, and after the final Kebab has been savoured, I am so going to volunteer to help the CabinCrew clear away the trays.]

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