Lisa: “Mom, why do we need to move again?”
Mom: “Because Mr. Landlord needs this place.”
Lisa: “But I need it too, I love my room.”
Mom: “I know my dear, but this is not our house, we don’t own it.”
Lisa: “But this IS my home, look, that’s my picture on the wall. This is not fair!”
If you just threw up a little, you’re normal. Unless you’re Michael Lee. He loves this stuff. It helps fulfill his personal destiny “to retire into the life I desire.” The young Port Coquitlam-based serial entrepreneur is doing that these days by simultaneously flipping $60,000 shacks in Atlanta and Chicago while he runs a little lease-to-own program raking in house-craving Vancouverites who actually can’t afford to buy.
Anyway, here’s the pitch. Don’t you dig the pic? Cue the weeping violins…
We can’t agree with Lisa more. She is right. This is NOT fair!
When your family moves in, you clean it up, unpack your stuff and spend countless hours here. Happy times, sad times, boring times and exciting times. This place is an empty space between 4 walls; nothing special. All the memorable stories of your lives make this space home. You love it, you take care of it and you do whatever the landlord says, because you don’t want to move . . . again.
Then one day you wake up to a landlord’s E-mail in your inbox. Yes, you need to go. Again. You need to leave your home, and never have a chance to come back. You pack all your stuff, take pictures of this place, hope to keep some memories of your home, but you know, this next place will never be the same anymore.
I know you’ve tried to own your home, but your pay-cheque only grows by 2% when the housing price increases by 12%. Saving up for the down-payment seems like a never ending staircase, the more you climb the further you fall behind. What can you do, you ask yourself?
You are not alone. That’s why Katlan is dedicated to bring the best Rent-To-Own program to the greater Vancouver market. The program is developed by a team of professionals including a Lawyer, Mortgage Specialist, Real Estate Agent and Investors with the goal of enabling you to own your dream home, and make a difference to your family.
Well, I guess we have to expect schemes like this to sprout in a place where the average detached property costs over a million, the average family makes seventy grand and all anybody talks about is house porn. Katlan Consultants seems a tad opaque and obscure, aimed at people with crappy credit scores who’d never qualify for traditional mortgage financing. Lee and his partners tell people like Lisa’s mom that they can still own a house, sort of. “Our programs are uniquely designed for dedicated individuals who cannot qualify for conventional financing today to achieve homeownership in the near future.”
So, Katlan buys a house, then leases it to Mom. She has to furnish 10% of the downpayment, even though she’s not on title, plus pay an extra amount each month (additional to rent) which will go into repaying Katlan’s deposit. This carries on for “between 2 and 5 years” after which the renter fronts more money for closing costs, and takes over the mortgage payments. If something happens in the intervening time and Mom has to move on, a portion of her downpayment is lost.
Of course, if Mom just took this money she’s handing over so Katland can buy the property she then leases (which Katland owns), plus the additional rent, and invested it inside a TFSA she might do a lot better – with no penalty if the deal never happened. But how could she ever explain “TFSA” to dear little Lisa? Especially when evil Mr. Landlord teams up with the bad Mr. Mulcair and the awful Mr. Trudeau to diddle her tax-free account?
Michael Lee, by the way, lists his formal schooling as “Tigrent Rich Dad Education”. Apparently it didn’t take. His sister company, EPI real estate, tells American wannabe flippers: “With all-time low interest rates, significant house price drops and a weak US currency, this is the perfect time to invest.” Actually rates have shot up in the last year, house prices have gained steadily and the US dollar is at record high levels. But, you know, like, whatever. It’s all about marketing, anyway.
Sorry little Lisa. Your mom’s a wuss being goaded by parental guilt into a financial death spiral that could shatter your future while Mr. Lee will get the one he deserves.
Stop moaning, kid, and pack up the damn toys.