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Sunday, 20 January 2013 08:08

Investor Insight: Time to hold'em or fold 'em?

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If you're the slightiest bit ambivalent about whether to hold onto an income property or flip it, join the club. That's increasingly the conundrum facing all Canadian investors, but there is an answer. Jemima Codrington reports.

Video transcript below:

Jemima Codrington: In a recent Crew poll, 79% of readers said that they think flipping doesn’t make sense in the current market. But is this really the case? Hi, I’m Jemima Codrington and welcome to this week’s episode of Investor Insight on Crew TV.

Falling house prices, slowing sales, all this that points to a market that’s pumping the brakes. Investors are getting a little bit wary of flipping, but is it a justified worry?

Cindy Wennerstrom, President, Oro Properties Inc.
Cindy Wennerstrom: I think investors should be wary of flipping in any market, not just today’s market. I think that you should never buy a property with the full intention of only flipping without having a back up plan.

And today’s market things do change, being financing rules and hot and cold market. So if you buy a property with the intention to flip, make sure that property can cash fill for you, if you have to rent it out for a little while, maybe 6 months or a year before the market recovers for you to make a successful flip opportunity from it.

Jemima Codrington: So how can investors leverage the current market conditions to sell successfully?

Marcel Greaux, Founder, Toronto Real Estate Club
Marcel Greaux: I think investors can leverage the current market to sell successfully by doing two things. The first is offer creative financing strategies, such as VTBs or second mortgages. That would help the buyer and often that will [ ___ ] that of the buyer you know come in and get a better purchase price. The second one will be to strategically renovate your property and increase the yields. So market right now is yield starved and if you can show your property with high yields, you will get a better price as well.


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