hehe. Everyone thought it would just keep going up and up and up. Nope.

Lol people had it so good for so so long. Now a small dip and the cry festival started.

He needs to sell all 3… the whole market is about to crash – values will drop over 60%. Interest rates will continue to rise and will be close to 10% by the end of 2023.
The entire global banking system will fall to its knees. The banks will collapse, taking your life savings with it.

It depends how deep into red ink he is. If the two rented house are paying for themselves, I would say rent the third one as well. If they are barely paying for themselves, but not quite, see if you can rent the third one for a good enough price to keep the other two afloat. If there is no way this can work, then sell the cheaper one. The very best scenario would be if just adding a bachelor to the basement would keep his finance in balance.

But if there's no way, there's no way. Sell the cheaper one to make some cash cushion to save the rest.

I would have to look at the whole picture but i would consult myself and start the sale of his property first. Then to the rentals. That only changes if he is in a detach. I would hold detach rather than lease hold or condos etc prices are coming down. Get it listed with santos asap

Inflation going down, sellers bout to make a comeback, hold strong!! Home prices going to 2+ million!!

Sell me @35% discount, I proposed one solution.

Asset prices do not always go up – even in real estate markets. Corrections could be quite dramatic as these prices drift farther apart from fundamentals and sustainable levels. Just look at the equity markets for an example. Folks who were gladly bidding tens or hundreds of thousands over asking prices will, and should, absorb these losses.

He would be in an excellent shape if he just bought one house with the money and worked hard to pay it off as soon as possible. So he could use his income to invest once he has no more payments. Instead greed took over

Emergent trends in this Real Estate correction are suggesting valuations/appraisal/financing collapses are primarily concentrated within Canada's well documented "frothiest" markets Ie: GTA/Fraser Valley…. and those ancillary investment 'wealth effect' secondary markets that have seen the highest price gains in recent years ? are exhibiting "proprtionally" speaking, the greatest declines which are now accelerating rapidly.
Conversely….
many Real Estate markets in Canada that were still compliant within macro fundamentals to their Geographic region…. are seeing little to NO price declines other than within rate effects on Mtg qualifying ? (Sask/Ab/Man/parts of the BC interior and elsewhere)

How often do you think you should buy second third homes etc. Using heloc or refinance

I would sell 1 for sure !

So basically house prices of 2 m or higher need not worry.

I'm going to add another comment about people buying and not thinking considering all of the options. Buying and exiting is a very expensive proposition. Agent fees, legal fees, the ridiculous land transfer taxes not to mention the capital loss is huge. Don't buy unless you are very confident about not needing to sell. The realtor fees and land transfer taxes could easily be into the hundreds of thousands.

Now this gentleman needs to sit down and figure out if he could rent all of the properties while paying the mortgages and eating the potential capital losses. So a year from now he might be down 100k per property more? And be paying extra on his mortgages by 50 to 60k? Can he do this for 2 or 3 yrs and wait out the dip vs taking the hit immediately? Or will he break even renting all of the properties?

If I am someone who is currently saving my down payment. At what point should I start contacting realtors?
When I think I have a good chunk saved up or get in touch when I'm starting to save so that I get better idea on how to proceed?

Garland, TX Housing Prices Crater 24% YOY As North Dallas Housing Prices Drop Like A Rock

He got hoomed.

I would re adjust my finances
Take my losses
Hang your hat
Where it can be reach!!!

I would try to rent out the properties. That would cover the mortgage as Rent is high right now. I have been in the same situation in 2017. I was fortunate enough that everything worked out for me.

Never go all in on one asset class, especially a inflated asset class like Toronto Real Estate 😂

He is underwater. Foreclose or negotiate with bank for short sell all three and may be walk away with some cash 👍

Don’t know for some reason I visualize you singing your intro song…na na na na….naaaa. Lmao! Is that really you though?

2nd mortgage business is golden now hit me if u need one

never understood why ppl get variable mortgages…

damn i'm surprised how many ppl are saying sell and cut losses. i wonder how many would actually do that if they were actually in those shoes. also, so many heartless ppl; even if he was greedy, can still shed some sympathy for a fellow person in a tough situation. you don't know them or how they ended up making these now obviously bad in hindsight decisions

Re: story in the beginning. Client can’t afford payments because variable interest rates are up. How exactly is this resulting in more money out of pocket for him? Higher interest rates do not equal higher monthly payments. Payments would remain the exact same with the difference being that less of that money would go towards the principal payment of the loan. Term would also increase. I understand that there are ‘trigger rates’ but I can not foresee that being the problem. Seems a bit misleading no? Am I missing something.

Cut the losses and get out

imaginary scenario, don't get fooled..rented properties pay by themseles plus the profit

If he was an experienced investor, he woulda at least had 2 of the 3 on fixed terms and it wouldn't be an issue. But since the guy is a literal noob he better sell one and take the hit. Then turn one of the 2 to a fixed payment and take out some of the variability. He def needs to switch one to fixed at the earliest convenience when banks start competing in Sept/Oct for market share and start cutting their 5 yr fixed rates…..as 5 year canada bonds are over 1% off their highs from months ago.

Rates won't go too much higher after September tho, market is already pricing in multiple cuts afterwards.

Trouble is trying to borrow to cover the loss is going to be an unsecured loan. Good luck.

I would move away from Toronto , move in a basement , hustle harder. Get another job. Save money. Cut on that starbucks,

Just like the renters do 😉 wink wink

He should cut his losses as soon as possible.
I was in a similar situation in 1990 and had to take $100,000 loss on a house purchased for $450 k, when I did the numbers to value the property back at what I had paid I felt I would have to wait possibly 10 years to do that, so for me the 100K loss was easier than struggling for 10 years to carry property that would eventually go back to what I paid.

2o12 real price good luck sellers

Hi, could please break down numbers excluding 2 million and over ?

Townhomes are going down another 50 percent…..i have a hard time putting a 4 in front of a town….stockyard towns are a disgrace

it's a shame everybody thought they were a financial guru and went with Variable, turns out us chumps who locked in at 2.2% for 5 years are ahead of the 1.8% variable crowd.

I hope everyone learns their lessons, mortgage brokers lie, realtors lie, advisors are not the same as advisers.

Risk is real, be careful where you put your money.

Fvcking muppets.

I wonder how much revenue the city has lost just with a decrease in people paying land transfer tax

" inheritance" red flag 🚩the cra came a knocking mortgage fraud rampant in Ontario big problem

What will be the trend in next few months?
Which properties ( detached, semi, condo) will loose more?

All numbers are skewed due to the sales … Wait for fall and winter… You'll see the market turn around…. Canada can't survive without housing .. GDP needs sales…. The BOC will pivot faster then ppl realize, ppl on the sidelines are already getting anxious to jump in …. Scroll out to see the bigger picture

The BOC is going to hike on Sept 7th another 0.75%. If this man can't cover his mortgages and is facing a liquidity issue 6-10 months from now then he's got a serious problem. 

Re: your averages for central Toronto, I'm looking in central Toronto and I'm not seeing things move and everything is selling lower than ask. I suspect that average was skewed because of the low volume.

Chart wise, the support is way down at the 2018/19 lows. Now if this follows a normal correction, it will overcorrect.

Better off renting at a smaller loss

Ya makes sense to buy 3 properties at all time highs 🤔

nice review.

Back home very famous saying Greed takes you to Grave..

He can't do anything just declare BANKCRIPCY.

And enjoy life as a HOMELESS on the street of TORONTO with thousands of others be soon gonna join HIM.

😆😆😆😆😆

Toronto and Vancouver enjoyed lots of free money over past few years and people got lot greedy. Now its the time to pay all that back and not sure if Chinese money will come to rescue this time around. All the best folks..stay safe