Real Estate

Can't Close on Pre-Construction - Please help

  • Last Updated:
  • Aug 15th, 2019 5:29 pm
[OP]
Member
Jan 16, 2017
415 posts
254 upvotes

Can't Close on Pre-Construction - Please help

Hi RFD,

I got myself in kind of a predicament. I bought a pre-construction condo a few yrs back and closing is coming relatively soon.

My career didn't work out as planned and I ended up with a much smaller salary than I imagine it to be. I don't have the financing to qualify for a mortgage. Unless I somehow convince a company such as (Google, Facebook, etc) to hire me, I don't see how I would qualify for a mortgage.

Is there any way I can close? Since it is downtown it can possibly be cash flow positive. I was hoping if somehow I can close then I would be saved. I thought about CMHC and that would just decrease the deposit but I would already have to put 20% down based on the developer's requirements.

If I can't find a way to finance would be forced to sell and I would be hit with (*hst on deposit, *hst on gain, *tax on cap gain).

Edit: I am also such an idiot for buying parking for like 60k.....fml
Salary: 75k
Purchase Price: 730k
Last edited by reesefitzmaurice on Aug 14th, 2019 11:09 am, edited 2 times in total.
46 replies
Deal Guru
Jun 26, 2011
12247 posts
2433 upvotes
Markham
Without some numbers I don't think anyone is going to be able to give you an accurate picture of what options may be available. Have you already spoken with a mortgage broker?
Jr. Member
Sep 7, 2018
145 posts
87 upvotes
Confirm that you have already put down 20%?

Also is there a cap on levies?

You are going to need to set aside anywhere from $5k - $20 k for closing costs.

You can also try to do an assignment, sell the unit before you close on it.

If you intend to keep it, I would try to rent it the second you get the keys, then with a one year lease in hand, submit paperwork to the cra for the landlord rebate to offset the hst you would pay on an investment property.

Of course we need numbers from you
Deal Addict
Jan 13, 2014
1316 posts
372 upvotes
Calgary
Please post your annual salary (approx) with your monthly liabilities and payments along with the condo's final price and any expected condo fees. The only other option would be to sell the place.
[OP]
Member
Jan 16, 2017
415 posts
254 upvotes
RolandCouch wrote:
Aug 14th, 2019 10:44 am
Without some numbers I don't think anyone is going to be able to give you an accurate picture of what options may be available. Have you already spoken with a mortgage broker?
Any sources for high leverage financing?
Deal Guru
Jun 26, 2011
12247 posts
2433 upvotes
Markham
reesefitzmaurice wrote:
Aug 14th, 2019 11:06 am
Any sources for high leverage financing?
No numbers = pointless to even try to help.
[OP]
Member
Jan 16, 2017
415 posts
254 upvotes
masarwar wrote:
Aug 14th, 2019 11:06 am
Please post your annual salary (approx) with your monthly liabilities and payments along with the condo's final price and any expected condo fees. The only other option would be to sell the place.
75k. I live with my parents and don't pay for anything.

Final price: 730k

I was thinking of just renting it then continue to live with my parents.
Newbie
Jul 29, 2019
10 posts
10 upvotes
You may have to check your contract to see if you can sell before closing.

See how much the bank will approve you for and see if there's any way to make up the difference, meaning you will have to put a larger down payment (more than 20%).

Try talking to a broker as well. I had a friend that tried to go through the bank which she got denied but a broker helped her get her mortgage approved.

My understanding is if that's your principle residence, there's no cap gain on selling.
Deal Guru
Jun 26, 2011
12247 posts
2433 upvotes
Markham
reesefitzmaurice wrote:
Aug 14th, 2019 11:07 am
75k. I live with my parents and don't pay for anything.

Final price: 730k

I was thinking of just renting it then continue to live with my parents.
That's a start....

Right from the outset I think it's safe to say that even if you came up with 20% down and were able to cover the costs to close you are still in over your head numbers wise. Not sure what your parents' financial situation is like, where the condo is, what is might rent for, what it might sell for, etc...but if they have the means then having them "gift" you a significant chunk of money to rent it out and then sell it (to get the HST rebate) might be the best situation you can hope for here IMO. Assigning is something else to consider.

I'd talk to a mortgage broker who after having all of your information can give you a proper list of options.
Jr. Member
Sep 7, 2018
145 posts
87 upvotes
How much have you put down to date? Most pre con deposit schedules end up equaling 15-20% when added up.
[OP]
Member
Jan 16, 2017
415 posts
254 upvotes
superscoots wrote:
Aug 14th, 2019 11:16 am
How much have you put down to date? Most pre con deposit schedules end up equaling 15-20% when added up.
15% and the other 5% is due on closing. I feel like I am ****.
Last edited by reesefitzmaurice on Aug 14th, 2019 11:25 am, edited 1 time in total.
Jr. Member
Feb 19, 2019
193 posts
148 upvotes
Stouffville ON
Talk to the mortgage broker, see if you can get your parents on the title, that's a start for you.
Go to this thread:
https://forums.redflagdeals.com/officia ... 1105/3514/
number of very good brokers there (including one I use and recommend for clients), get in touch with them and see what possible options you have.
Full Service / Rebate Realtor.
Jr. Member
Sep 7, 2018
145 posts
87 upvotes
reesefitzmaurice wrote:
Aug 14th, 2019 11:20 am
15% and the other 5% is due on closing. I feel like I am ****.
I just don't understand, you knew it was coming, why you didn't aggressively save for 3-4 years...

I would look into doing an assignment sale, you'll still make a bit of money, this property is way too expensive to carry on one income.
[OP]
Member
Jan 16, 2017
415 posts
254 upvotes
superscoots wrote:
Aug 14th, 2019 11:28 am
I just don't understand, you knew it was coming, why you didn't aggressively save for 3-4 years...

I would look into doing an assignment sale, you'll still make a bit of money, this property is way too expensive to carry on one income.
please make me feel worse....fml. you know when you're young you are full of ambition and light. I guess I got run over by the drunk taxi cab of reality
Jr. Member
Sep 7, 2018
145 posts
87 upvotes
reesefitzmaurice wrote:
Aug 14th, 2019 11:32 am
please make me feel worse....fml. you know when you're young you are full of ambition and light. I guess I got run over by the drunk taxi cab of reality


Just be happy knowing that you bought a few years ago and if you do an assignment sale, even for 20k less than comparables you'll still walk away making money, best to contact a realtor to assist you.

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