Just the subject line alone will conjure up images in your head; the possibilities are endless.
Maybe you’re picturing yellow police tape surrounding the home, or a biker gang being arrested and led out the front door of the home.
But what if I told you that inside a “former marijuana grow-op” was family who had been living there for 13 years with no issues?
Then would you consider buying a former marijuana grow-op as your primary residence?
It’s a tough market out there, folks.
I probably don’t need to say that, again, because it’s getting pretty old at this point.
Most of my recent blogs, and my Pick5 videos, are about how tough the market is. I think you get it, by now.
And yet despite how tough the market is, every once in a while, I still get a naive, hopeful, albeit clueless buyer out there that says something to the effect of, “We’re not, like, really serious right now, but if an absolutely unbelievable deal comes along, let us know, and we’d be willing to take a look.”
No problem. You’re the first person I’ll call…
There are no absolutely, unbelievable deals out there.
And even if there were, you’re not going to find them by being passive.
“Deals” in this market are next to impossible to find.
They’re like……well, I guess you could say they’re like teams being down 28-3 in the Superbowl, and coming back to win 34-28 in overtime. 🙂
And when you do find a deal, you have to make absolutely certain that the thing that looks too good to be true, isn’t.
I’ve been working with my oldest friend in the world in the past three months to find him, his wife, and his son, a house.
I’ve known Duncan since he was 3-years-old. He was actually my brother’s friend growing up, but since I was incapable of making friends of my own, I basically stole all my brothers’ when we were in our early 20’s.
Duncan and his wife Amanda live in a semi-detached bungalow in Mississauga, and have one child, but there’s one more on the way!
Their house was originally a 3-bedroom, but as is the case with those silly condo townhouses on the south side of Sudbury Street in King West, the three bedrooms are like closets, and many people open up the wall between the two 8×8 jail cells to create a functional “master bedroom.”
So with a second child on the way, Duncan and Amanda began the search for something larger last fall.
Their house is worth about $650,000, but their budget to find something larger is only $800,000. That’s not a lateral move, but it’s not a massive move up either. We had a tall order right from the get-go.
For those of you that know Mississauga, you know that the housing stock is very different from that in Toronto.
There are a ton of backsplit and sidesplit houses, which are all unique in their own way. Some work, some don’t. Some have great layouts, and some are just confusing as hell.
Have you ever been in a backsplit that just keeps going, and going, and going?
You go down to the basement, and find another level below it, and you’re shocked. But then you find another level below that one!
These backsplits and sidesplits come in both detached and semi-detached form, and of course, the price is higher for the former.
I told Duncan and Amanda right from the start that my goal was to find them a detached bungalow on huge lot – a 50-footer! They would gain the extra bedroom and the space they needed today, while having an unbelievable opportunity to build a mansion, or sell to a developer, in 15 years when these 50-foot lots are getting their due.
We cast the net wide. Really wide!
From Dixie Road to Winston Churchill, and from the 403 right down to the water.
Looking in Mississauaga always seems to end up that way, and it’s so different from Toronto.
In Toronto, I find most people have a small geographic area in which they want to search. They might go outside that area, but barely.
Few people say to me, “I’ll live in Bloor West Village, but also in The Beaches, and basically anywhere in between.”
But when it comes to Mississauga, I find my buyers will live just about anywhere.
We started to look in early November last year, with the knowledge that we probably wouldn’t find something in 2016, since the market was drawing to a close rather quickly.
Amanda was on fire with the new listings, emailing me 4-5 per day, and keeping on top of what was selling.
There was that one house that sold in the fall, that we looked back on in the spring, and said, “Oh that would have been perfect.” A lot of buyers feel that way after they get discouraged in a market, and look back to when they started. There’s always that one house that they “would have, could have, should have” bought, but they weren’t ready.
As a lot of buyers out there are finding so far in 2017, it seems as though the market went up 5% as soon as the calendar turned from December to January.
Duncan and Amanda felt this right away, and as the 2017 market wore on, it got worse.
We spun our wheels with a lot of semi-detached backsplits, and although I kept trying to convince them that the space – and all those levels, were great value, we never found one with the right “flow.”
We watched as houses we didn’t like at all routinely sold for $780,000, $790,000, or some of them even over $800,000, which was our max. It was really tough to see houses that we wanted to pass on sell for more than we could afford. At times, it felt like the search was pointless.
We ventured west of Winston Churchill a couple of times, and found ourselves in Oakville.
“Wanna live in Oakville, Duncan?” I asked as we stood outside this one house – a “link,” where the house looks detached, but actually shares a foundation with the houses on both sides. The house checked all the boxes from the outside, but once we were inside, it actually felt like a downgrade from their semi-detached bungalow!
Duncan and Amanda have a massive finished basement, with a guest bedroom, and a family or rec-room that’s perfect for watching epic 25-point comebacks in Superbowls…
And yet every time we saw a basement in a sought-after “detached” on a 25-foot lot, the basements were tiny, often less than half the size of what Duncan and Amanda already had.
We bid on a few houses, never really getting close.
We got absolutely blown out on one – losing by over $100,000. That’s never fun.
I looked back to my original idea of a detached bungalow on a 50-foot lot, and felt irresponsible for even suggesting it.
These were going well past $850,000 now, and into the $900’s.
The ugly backsplits that we didn’t like were pushing past $800,000 as well.
Through the whole month of January, we only found one house we liked, and that was the one we bid on, and lost by $100,000.
Then last week, I was looking on MLS and saw a house in our price range – $800,000 even. A very odd price, since most people price at $799,900.
This house had been on the market for 14 days, though, which I thought was odd. Why didn’t I see it?
Then I saw the “PC” and realized this had a price change. But when, why, how?
This looked like a $950,000 house!
A 2-storey, detached, on a 50 x 120 foot lot, with a goddam pool in the backyard!
It didn’t make sense.
I figured maybe they were out at $979,900 or something, and the “PC” was them dropping the price to $800,000, to try to set an offer night and solicit multiple bids. I hate when agents do that, as though the market was asleep, and/or born yesterday, and were unable to do a history on the listing.
But as it turned out, this wasn’t the case.
The property was actually reduced in price from $850,000.
And the listing even said, “Offers any time.”
I couldn’t figure it out.
$800,000? For this house?
What was I missing?
Well, folks, at the risk of milking this too long, and since you already read the subject line for today’s blog, I’ll tell you the obvious: this was a former marijuana grow-op.
There was a small note in the broker’s remarks that said, As Per 2003 Listing “Former Grow House.”
That explained a lot.
In fact, that explained just about everything!
No buyer out there looking for a place to raise their family is going to purchase a former grow-op.
And even if they wanted to, not a single lender in the province would advance a dollar.
But I was intrigued by this, and even though I don’t make it a habit of chasing unicorns, I decided to spin my wheels a bit.
I asked our in-house legal council at Bosley, one of our managers, and my mortgage broker, and their responses ranged from, “You’re wasting your time,” to “You already know the answer to this,” to “Have you ever successfully got your hands on a unicorn?”
I probably should have quit there.
But I ran the history of the property, and this house sold in June of 2002, closed in August of 2002, and was then sold again under power of sale by a bank in October of 2003, having been listed in September.
There were only thirteen months in between the closing of the house by the alleged grower, and the listing by the bank.
And you can assume that it took a few months for the bank to foreclose, and this would be after an investigation.
So perhaps the “growing” stopped in, maybe, May or June of 2003?
And how long did it take for the growers to set up? A few months?
Maybe they didn’t start growing until, say, November of 2002?
So all told, we have maybe 4-6 months of growing here, absolute, max.
That was hardly a full-scale “grow op.”
I noticed in both the 2002 and the 2003 listings that the basement was unfinished, and yet in the 2017 listing, the basement was fully finished, and the notes said, “Home Fully Renovated By Current Owners.”
The grow-op could have taken place anywhere in the house, but it was more than likely the unfinished basement.
And if the basement was now finished, it meant the current owners did a lot of remedial work back in 2003.
In the photos of the property, you could clearly see children’s bedrooms.
Now call me naive, but what kind of parent would raise two children, for 13 years, in a house that was infested with mold from a marijuana grow-op?
At the risk of chasing a unicorn, I started to think that perhaps this house was stigmatized, but in practice, there as nothing wrong with it.
I told Duncan and Amanda about it, and after a handful of jokes directed at themselves, me, and the house, we decided to go take a look.
The listing came out at $800,000 mid-day, and by 6pm, Duncan and I were in the house for a look.
It was perfect.
Beyond perfect – it was way out of our league.
A 50 x 120 foot lot. A detached house. A 2-storey, 3-bed, 3-bath.
It blew away everything else we’d seen to this point.
Duncan and I called Amanda from the car, and said, “This house is perfect, we want to make an offer.”
She more or less said, “So you two geniuses went to see a former marijuana grow-op, and you want to make an offer, without me even having seen the house?”
We looked at each other and started to nod in agreement. “Yeah, yeah that’s fairly accurate,” we said.
There was dead silence on the phone, and then finally Amanda said, “Alright what the hell,” to our surprise. “Let’s make an offer.”
“Well, if we don’t get the house,” I told Duncan, “I’ll buy you a pound of weed,” I said as we both laughed hysterically.
(TO BE CONTINUED)