Now that there have been a good four months worth of resales at X-Condos, I feel it warrants a look back at what these investors (okay, okay, I’m sure some of these people were actual users) paid for their units back in the day.

I’ve been keeping an archive of old condo sales brochures here in the basement of Bosley Real Estate, and it’s times like this when I knew this six foot stack of cardboard would come in handy…

A friend of a friend lives in a building “at Mount Pleasant and Jarvis,” as the friend describes it.

I find this funny since those two streets are really the same and don’t exactly intersect, but what’s even funnier is that she describes here new condo as “the one with the giant crayons out front.”

Just what exactly are those red cylinders pictured above?  Some sort of modern art?

Last Friday, I went to this young lady’s housewarming party at the building with the crayons, otherwise known as “X Condos,” hoping that I might fit in with the slightly younger demographic.

But as soon as I walked through the front door of the 2-bedroom (if you call a 6 x 7 room a “bedroom”), 2-bathroom condo on the 13th floor, I was greeted with that nostalgic, drunken song we all know from university: “O-lay, o-lay, o-lay, o-lay…..o…..laaaaaay, ooooo laaaay.”

Yes, it was a group of adults playing flip-cup.

I’ve never really enjoyed flip-cup.

It’s not just because I didn’t feel the need to act macho when I was in university (although perhaps all the bodybuilding and karate tournaments demonstrated otherwise…), but because I found the game to be pointless and stupid.

I’m not a party crasher – I just don’t like drinking to excess for no reason.

At the risk of getting off topic here, let me take this one step further and tell you how I feel about the time-tested display of macho-ness known as the keg stand.

I could never understand why people did this!

I was at so many university parties where guys were lifted upside down to drink beer through a tube and have it spilled all over their faces and I wondered “Why are they doing that?”

Soon it would be my turn, and I’d say, “No thanks, I’m good.”

There was always that group of guys that would say, “What’s the problem?  Are you some kind of wimp?”

Those are likely the same type of guys pictured here:

And I’d think to myself, “No, I’m just good here – quietly sipping beer from a cup, at a standard and comfortable pace.  I don’t need to be lifted upside down, have a filthy tube shoved in my mouth, so I can ‘chug’ beer excessively and have my shirt soaked with whatever the cheapest beer in existence currently is.  I’m good – don’t worry about me.”

Maybe I’m just old and boring.  Or maybe I’m rational and I’ve always displayed common sense…

Last weekend at X-Condos, I watched a dozen young adults drink excessive amounts of cheap beer out of red cups, and I secretly bet on which ones would be throwing up a short while later.  I only wish I had put money on it…

There was a large kitchen island, made of a nice white granite, which served as the playing surface for the Game of The Night.  Within a couple hours, the hardwood floor was soaked with spilled beer, which likely was never cleaned up, and the beautiful granite counter was about as sticky as George The Animal Steele covered in honey.

This is somebody’s investment property, and that real estate investor has leased out his unit to a couple of young adults who, despite their mature collection of wooden hangers in the walk-in closet, and the lack of Scarface posters on the wall, are essentially grown-up university students.

A lot of investors sold their units during the occupancy phase, and now that the building has been registered for coming up to a half-year, even more investors are selling their units on the resale market.

I managed to dig up the old X-Condos brochure from March of 2006, and it proved for a rather interesting read.

For starters, look at the brochure itself:

At the time, this was ground-breaking!

Look at the design – it’s so simple.  It’s just a black book with an “X.”

Times have changed, and pre-construction condominium marketing has entered a whole new era of launch parties and laser light shows, but back in 2006, this simple design of the brochure itself lured in the investors from near and far.

The “pre-opening” for X-Condos took place on March 22nd, 2006, and I attended.

I was looking for an investment property at the time but I had already contracted to purchase another property and thus my cash flow situation was not ideal.

The small 1-bedroom units were being sold for a paltry $179,990, but the developer wanted a whopping 25% downpayment before occupancy!

I’ve always maintained that I will only buy pre-construction condos if they allow 10% down, no more.  Well, X-Condos wanted 5% within 30 days, 5% within 60 days, 5% within 120 days, 2.5% in 9 months, 2.5% in 18 months, and then 5% upon occupancy.

Even if you were able to wiggle out of the latter two payments, you were still on the hook for 17.5% within 9 months.  That just didn’t work for me.

These junior-one-bedroom units were selling for $347 per square foot; an unthinkable price as we look at the 2011 marketplace.

The “Le Corbusier” model was priced even lower at $338 per square, and models ranged from 518 square feet to 935 square feet in the planned 43-storey tower, although models exist up to 1660 square feet.

So how did these investors end up doing?

What are resale prices like today and how do they compare to what was paid in March of 2006?

The last unit sold in the building was the “Mackintosh” model – a one-bedroom-plus-den unit measuring 593 square feet.  The unit had no parking space, but did have a locker, and sold for $369,900.

This model was originally sold for $226,990 in March of 2006, and an additional $3,500 was paid for the locker.

Not a bad little pay day!  A profit of $139,410 inside of five years.

The reason I always elect to put down a maximum of 10% is because the return on investment is much greater than a property where you’re required to come up with 20% inside of 18 months.  Don’t forget – this $139,410 profit isn’t the return on the $226,990 originally paid, but rather the $45,398 deposit paid within those 18 months, as well as the additional $11,349.50 that was handed over upon occupancy in 2010.  The math is too complex for my small brain, but the ROI is huge.

The “Eames” model also did exceptionally well for investors, particularly the one that sold last month for $500,000.  This is a 2-bedroom unit measuring 803 square feet, and it originally sold for $272,990 plus $29,500 for parking.

That’s just shy of a $200,000 profit for the investor.

This was the same model in which I witnessed the infamous game of flip cup, and I’ll be brutally honest when I say that never once did I feel like I was in a half-million-dollar condo.  But what can you do when you live in a shoe?

Interestingly enough, another one of the “Eames” models sold a month earlier for $417,000, albeit without parking, and 20 floors lower than the one that sold for $501,000.  This unit was vacant during the listing, whereas the $501,000 unit was staged.  Don’t ever balk at the importance of staging again!  Parking can be valued at around $40,000 in this building, and there is certainly a premium on a unit located on the 40th floor, but this still leaves a price gap that I think can be directly attributed to the staging.  Good work!

The “Neutra” model was sold a couple months back for $565,000 with parking.

This 935 square foot, 2-bedroom-plus-den, 2-bathroom unit was originally sold for $333,990, plus $29,500 for parking.  Once again, we see another $200,000 profit for whoever had the foresight (and money!) to hunker down 20-25% back in 2006.

Finally, the “Breuer” unit, which was originally sold for $238,990 plus $29,500 for parking, and recently turned over for $435,000 on the resale market.

One way of looking at each of these sales is by the cost per square foot.

Let’s review:

Mackintosh – $624/sqft in 2011 (no parking), $388/sqft in 2006.
Eames – $624/sqft in 2011, $377/sqft in 2006.
Neutra – $604/sqft in 2011, $389/sqft in 2006.
Breuer – $615/sqft in 2011, $379/sqft in 2006.

All of these calculations account for the $29,500 for parking and $3,500 that was paid back in 2006.

Interestingly enough, the smaller units – the “Aalto” and the “Wright” units that measure 518 and 545 square feet respectively, seem to be trading for well under $600 per square foot, although keep in mind that you were NOT permitted to purchase a parking space with these units.

I’m amazed at the sale of the Mackintosh unit for $624/sqft with no parking!  Some people will pay big bucks for the view or if a unit shows well via staging.

I love the design of this building from the exterior.  It’s a sleek black tower the likes of which Toronto has never seen before.

But keep in mind that there are condos being built immediately north AND south of X-Condos, and many of the “premium” views will soon be obstructed.

To all the investors who purchased at X-Condos, I say “Job very well done!”

You could have thrown darts at a board to pick your pre-construction condo projects back in 2006, and every one of them would have made money.  How much money is another story, and investors at X-Condos certainly led the way.

It once again reminds me why there is no money to be made in pre-construction condos in 2011.

More on this coming Friday with a delicious video…