All Forum Posts by: Robert Gunther

I found a property that has a foundation issue.

At first, I was turned off and passed it over.

Doing some Google searching I see they also tried to sell this property in 2014 (at a higher price) but it did not sell.

It has been sitting on the market now for a few weeks.  The listing agent says they had an offer but the financing fell through.

I am wondering if financing this property with bank financing would be possible?  I doubt many conservative Canadian banks are lining up to lend on properties with foundation issues and that may be why the buyers financing fell through.

I am a cash buyer, so getting financing is not an issue.  I know the foundation is fixable for about $50k so obviously I will take that into consideration when making an offer.

I'm am just wondering how much of a disadvantage it is for the seller that people might not be able to get financing.

@John Lusk I think in 2014 there was something like 12 legal suites in the entire city.  Since at least one of the units must be owner occupied I guess it does not happen legally often.

There are hundreds and hundreds of illegal ones.  If you look at the property listings a great many of them have existing suites.

In 2014 the council was considering lifting the owner occupied rule but it does not seem to have gone anywhere.  

So they are thinking about it, and with no vacancy anywhere hopefully they relax the rules.  

I believe it is a BC law that a duplex can never have a legal suite, so if they do make it legal at some point the duplex properties with basement units will still not be legal. You mentioned SFH, so hopefully someday they become legal.

@John Lusk there are no legal basement suites in Vernon, unless the owner occupied one of them.  So you can get away with it until you are reported but it is a risk and the city may shut you down.

I suspect if you are buying in a lower end area of the city you can probably get away with it for a long time as the neighbors probably don't care as much.

If you try and operate an illegal suite in the 'fancy' parts of town like East Hill I suspect the neighbors will be calling the city very quick to complain.

Here is an update on this. It has quickly turned out to be a nightmare, not only because of the water damage but also because of the property management company (notice, I said company – it is a large internationally known company).

I spoke with the PM, their handyman, the tenant and a mold remediation company to put the pieces together.

On April 16th all new appliances were installed. The dishwasher was hooked up by the PM’s handyman.

The following morning the tenant woke up to a flood he could not stop. He was using 4 large bath towels to try and soak up the water.The flood was so bad it had soaked a mat in the garage below – right through the floor/ceiling.

He could not get the water disconnect to fully shut off. He ended up taking the dishwater’s supply line and letting it leak into the sink.

Finally the next day the management company sent the handyman out and the water supply was fixed.

A few days later the smells start.

Despite repeated calls from the tenant the PM does nothing, no one goes to even look at it.

Finally about May 3rd the handyman shows up and they take the floor apart as seen in the photos.

Now it gets interesting.

The management company says the problem existed before, could not have been caused by the leak.The handyman claims there were only a couple of drips from the water supply line (despite the tenant’s description).

I had a mold company come in, they did moisture testing and determined the water goes under the cabinets, under one wall and into the hall and down into the garage below. In total it is about 25sq ft of soaked flooring all centered around the dishwasher.

The actual mold is not a big issue as far as mold goes, the cleanup costs are the same with the mold or without the mold.

They are currently drying the place out and will determine the course of action once dry.

Still waiting on the insurance company’s adjuster, hopefully they will come on the next business day.

Accidents happen but the PM’s actions here are seriously lacking. If the floor is spongy and wet after a leak, it is not going to dry on its own.

The PM’s most recent action is to turn the keys to the property back over and wash their hands of it.

Thanks @Steve Vaughan, the building was originally constructed in 1995 so I don't think it is tar based installation.

Does particle board go black like that when wet, or could it really be all mold?  The PM was saying to avoid restoration companies due to their high cost.

If there really is black mold I think it would need to be professionally taken care of, don't need it spreading.

I have a property management company who manages a remote condo.

When I woke up this morning I had an email that basically said there was a water leak in the kitchen and the place is full of mold.  The tenant called about the kitchen floor being weird (no signs of water reported).

Here is a photo of the floor, you can see it is not level.

The property manager contacted their handy-man and they set out to find the cause.  The flooring is the peel and stick type so they cut some out and found some water.

There was a 2nd layer of flooring under the fist layer so they kept going.  They made the call that this was all black mold and decided to keep digging.  I have still not been contacted at this point.

They took out all the sub floor and are down to the last layer of the flooring.  They sprayed some type of anti-mold stuff on it.  I don't know if all the moisture in this photo was because the floor is soaked or if this is because they sprayed it with something.

This is quite an aggressive home renovation they have done without even consulting me.  Does this type of flooring go black when wet or could this really be an entire floor of mold?

@Roy N.  Yes, thanks for the correction.  I often says arms-length, but mean non arms-length.  In my messed up head arms-length means something is more than arms-length away.  Gotta get my terms correct.

In your home, as in primary residence or in investment properties?  I'm getting flat out no chance from every broker I have spoken to.

I have a couple places that are clear title.  I want use those as collateral to get financing to purchase additional properties.  Everywhere I have turned is a flat out no, they only suggest private lending with high interest, interest only and 1 year terms.

It came as a bit of a shock a few months ago when I contacted a mortgage broker about financing, using equity in a property to secure financing.... it is just not possible with traditional banks in Canada anymore.

One broker actually gave the example that if I had 10,000,000 in equity I could not even get financing for a single dollar.  Blew my mind.

I talked to some private lenders, they only want to do 1 year, interest only.  That might work for flips, but I want longer term more traditional funding.

I am aware of arms-length RRSP  mortgages and that works, but you have to find someone who has funds to lend.  There is no RRSP mortgage forum that I know of, would be cool  though.

What financing options are available to borrow against equity?

@Cal Ewing, the arms-length mortgage must be applied against a freehold property in Canada (no leasehold land, and I believe no native land either).

If you have a property with equity in it, in Canada, you could have someone you know (arms-length) lend you funds against the equity in the property you already have.  You can do whatever you want with the funds.

So for example if you own a home in Canada that is clear title and you want to purchase a property in the USA you can take out the arms-length mortgage against your clear title property in Canada.  Once the mortgage is in place you can spend it on whatever you want, a new car, a vacation, repairs or a property in the USA.

I know this is not exactly the answer to your question, but if you have equity in a Canadian property you can get the funds.