The Sell: One family’s adventures in house flipping
They bought it for a song, gutted it, then learned a hard lesson about house flipping
The sellers: Phares Sekalala, a 41-year-old accountant, and Sarah Sekalala, a 43-year-old interior designer.
The property: A 1,400-square-foot, three-bedroom, four-bathroom house near Yonge and Davisville.
The story: The Sekalalas emigrated from Uganda in 2001 and settled in Queensville, just north of Newmarket. A few years ago, they flipped a house as a side project, and then did another one soon after. With a bit of extra money in their pockets, they thought it might be time to move into the city—something they’d planned to do as soon as they could afford it. They noticed an $879,000 listing for a detached house in Davisville. It needed some work, but it was a steal for the area. The couple jumped on it, started gutting the place, and then got cold feet. Their four young kids had grown used to life in the country and didn’t want to leave. The Sekalalas decided to unload the property, but they’d never flipped anything so expensive before, and the high-end market proved hard to navigate.
The prep: They spent about a year and $150,000 on the renovation, which included combining two of the bedrooms into a master suite (with a new bathroom) and finishing the basement. They opted against some bells and whistles—like backsplashes and new appliances for the otherwise reno’d kitchen—that hadn’t figured into their experiences flipping cheaper homes. In the $1-million-plus market, however, buyers expect all the elegant finishes.
The offers: The Sekalalas listed the house last August for $1.25 million. Two months and several price reductions later, there were still no offers. They got a new agent and did more reno work, then tried again at $975,000. Within a week they had five offers. The two highest came in at $1.05 million. After carrying a year’s worth of mortgage payments, the Sekalalas breathed a sigh of relief. Neither bidder had any conditions and neither would budge higher, so the deal came down to a coin toss. When the winner wanted to close earlier than the Sekalalas (who needed time to transfer their mortgage to another flip they were eyeing), the couple called up the other bidder, who was more flexible, and the deal was done.
![](http://www.facebook.com/sharer.php?u=https://torontolife.com/real-estate/the-sell-hard-lesson/&title=The Sell: One family’s adventures in house flipping&picture=https://torontolife.com/wp-content/uploads/2012/06/june12TheSell-624x300.jpg&description=They bought it for a song, gutted it, then learned a hard lesson about house flipping By Bert Archer
[caption id="attachment_145327" align="aligncenter" width="656" caption="Photographs: house by Daniel Neuhaus; couple by Liam Mogan"][/caption]
The sellers: Phares Sekalala, a 41-year-old accountant, and Sarah Sekalala, a 43-year-old interior designer.
The property: A 1,400-square-foot, three-bedroom, four-bathroom house near Yonge and Davisville.
The story: The Sekalalas emigrated from Uganda in 2001 and settled in Queensville, just north of Newmarket. A few years ago, they flipped a house as a side project, and then did another one soon after. With a bit of extra money in their pockets, they thought it might be time to move into the city—something they’d planned to do as soon as they could afford it. They noticed an $879,000 listing for a detached house in Davisville. It needed some work, but it was a steal for the area. The couple jumped on it, started gutting the place, and then got cold feet. Their four young kids had grown used to life in the country and didn’t want to leave. The Sekalalas decided to unload the property, but they’d never flipped anything so expensive before, and the high-end market proved hard to navigate.
The prep: They spent about a year and $150,000 on the renovation, which included combining two of the bedrooms into a master suite (with a new bathroom) and finishing the basement. They opted against some bells and whistles—like backsplashes and new appliances for the otherwise reno’d kitchen—that hadn’t figured into their experiences flipping cheaper homes. In the $1-million-plus market, however, buyers expect all the elegant finishes.
The offers: The Sekalalas listed the house last August for $1.25 million. Two months and several price reductions later, there were still no offers. They got a new agent and did more reno work, then tried again at $975,000. Within a week they had five offers. The two highest came in at $1.05 million. After carrying a year’s worth of mortgage payments, the Sekalalas breathed a sigh of relief. Neither bidder had any conditions and neither would budge higher, so the deal came down to a coin toss. When the winner wanted to close earlier than the Sekalalas (who needed time to transfer their mortgage to another flip they were eyeing), the couple called up the other bidder, who was more flexible, and the deal was done.){kind=link}
They lost money…
For those that can afford the million dollar plus housing market in Toronto, there’s a lot to choose from .
So the gist of the article is flipping is not easy or for everyone and they lost a lot of money.
This is madness. Did they have a realtor advising them ? only person who came out with $$$ was the realtor who possibly advised them to pay $879K and they could get $1.25mil ( thank god for the people who DID NOT bite!). The agent who sold it came out with what ? crazy!!!
They have absolutely no idea how close to diaster they came, the Canadian housing market is teetering and about to go down.
Tell them to spend some time over at Garth turners blog, this couple needs a wake up call
This article is useless without pics of the newly renovated digs. Before/After please.
true…i would have liked to see pictures too…would have made more sense…
Flipping is so 2000 to 2010 – times are changing and people are realizing that house prices have been rising due to cheap credit. People are in debt beyond their eyes, new cars, trips, nice houses, and most dont make over $60k annually.
If interest rates rose 2-3%, there are a lot of people who wont be able to afford their mortgage payments. Interest rates will not stay this low, they are the lowest in history and were an emergency solution, they are not long term. Stay liquid, rent and keep you money safe, not with a soon-to-be depreciating asset. Boomers are retiring, house prices cannot and will not sustain. Look at the big picture, dont listen to the 6pm nightly news which is CREA PR.
Newbie immigrants with mediocre jobs, 4 young kids and no mention of real estate expertise flipping million dollar houses? Who gave them the loan to engage in this speculative behavior? Did they get a 5% down, CMHC insured mortgage courtesy of one of our ‘conservative’ Canadian banks? Would be nice if the author had dug into the details a bit. Plus the ‘we wanted to live there but got cold feet’ part sounds suspicious. How can you not think about these things before paying a million for a house? Or did they really just make that story up to take advantage of the better CMHC backed financing terms available for owner occupied dwellings? Nice to know people like this have bid up the price of housing to the point where it’s unaffordable for everybody else. BTW, the tagline says ‘bought it for a song…’ Since when was $879k for a small single family house covered in stucco a song?
If you read the article, they bought the house to live in. It was only afterwards that they decided not to move in. I agree that they were naive in flipping particularly in what buyers expected in a renovated house. No question, they lost money. They probably should have moved into the house despite their kids reaction, sold their home in Queensville and waited.
Congratulations to you two. Don’t give up. Just listen to your guts flip more houses and God will bless you once again with another deal. We are proud of you the Sekalalas.
For those who wanted to see some pictures. Here is the virtual tour before they went back for more renovations. http://www.youtube.com/watch?v=w69SoCI3QE0 . I’ve seen pictures from the listing after the minor renos and it was basically the same, they just added backsplash to kitchen and changed some of the horrendous mirrors they originally had. It’s not a surprised that they could not get anything near the 1.25 mil they’re looking for. Mostly lower end finishes, completely lower end kitchen with a bad design; look at ther corner sink, come on, you kidding?!?!?
Watched the video on fast fwd – that kitchen does not say 1 million. The agents use yahoo email addresses?
I’ve lived in Toronto for the last 25 years and in Canada all my life. After a recent divorce, I had to relocate and re-buy near my ex to stay connected to my kids. Last spring/summer was spent chasing and loosing out on homes. I’ve seen a couple of the houses I lost out on already being relisted. Flippers need to eat it as they’re killing the chance for regular people to still live in the city witthout having to resort to condos.
the ability to purchase homes that wreep the gains here are unrealiistic. I would say 70% fail another 20% brake even and only 10% actually come out ahead.
Flipping seminars/scams plant the seeds of greed. Most people dont realise nor are they told the truth.