As Toronto’s real estate market continues its wild run, it’s not just potential homeowners who are having trouble finding affordable properties. For infill developers and resellers – otherwise known as flippers – bidding wars and wild-eyed buyers are making it hard to turn a profit rehabilitating broken homes.
“For years, improving distressed properties was our sole focus,†says Bill Crilly, a structural engineer who runs 3 Stones Custom Homes with general contractor Chris Lawrence. The company focuses on what Mr. Crilly calls “dilapidated houses that no one would want to live in,†in the downtown Toronto core, completely gutting and restoring stately, 100-year-old brick houses and outfitting the insides with luxe, contemporary design touches.
In the past year and a half, the duo has found itself regularly outbid and for the past few months has found itself entirely without a house to fix up. In early fall, for example, they tried for a house on Euclid Street, near Bathurst and College, that was listed at $960,000. 3 Stones offered $1,035,000, planning to spend around $200,000 on a six-month fix and sell for about $1.5 million.
The house sold for $1,220,000, almost $200,000 more than they were willing to pay.
“The thing is, we bought and restored the house right beside it, we know what it needed,†Mr. Lawrence says. He says the eventual buyers are in for an unpleasant surprise if they think they can get away with a cosmetic renovation. “We planned a complete gut right back to the studs.â€
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