Here is the recipe for a $2,000,000 house:

Take a $939,000 house from an estate sale.

Add permits, plans, and permissions.

Spend $600,000 in renovations.

Carry the cost for six months…

I wouldn’t necessarily use the word “ugly” to describe this house.

Perhaps “Fugly” is a more appropriate term.

What is the world coming to when we are calling $939,00 a “building lot” in Toronto?

301 Bessborough Drive is an estate sale, and in real estate, when we see the words “Estate of…” under the name of the seller, a red flag goes up and we assume that Mabel has passed away at 97 years old, and her house is full of green shag carpeting and WW1 artifacts…

In this case, I think we’d all be right.  With no interior pictures of the house being posted on the MLS system, everything being sold in “as-is condition,” and the knowledge that this house has been in the same family for over 40 years, I think this house is beyond a “fixer-upper.”

Leaside is also beyond a “hot area.”  It may be the hottest neighborhood in all of Toronto, but at this pace, who could tell?

301 Bessborough is on a 50 x 118 foot lot on a beautiful tree-lined street in North Leaside.  “Bessborough Drive” is the most prestigious address in either North or South Leaside, and people have been so vain (or smart…) as to change their address to Bessborough if they happen to live at, oh, say the corner of Bessborough & Sutherland, with a former Sutherland-address…

Fifty-feet is well above average frontage for a Leaside property.  In fact, since 2005, the average frontage of a detached house to sell in Leaside is 33.3 feet.  So needless to say, 301 Bessborough and it’s massive 50-foot frontage will be attracting a ton of potential buyers!

But let’s not forget how many builders work in the area, and how many people want to live in Leaside.  This creates a situation where both builders (looking to capitalize on the rich Toronto Leaside-wishers) as well as end-users (looking to do their own renovations rather than buy from a builder) will be lined up on offer night to pay 120% of the asking price.

My thoughts?

Listed at $939,000, this house will fetch over $1,100,000.

This is more than just land value, since there are four walls and a roof that are useable, but the term “gut renovation” is an understatement as to what needs to be done to bring this house up to 2007 Leaside standards.  I’m thinking at least $500,000 is needed for renovation costs.

That brings us up to $1,600,000, so throw in the $18,475 in Land Transfer Tax, the $30,000 in financing costs to carry this house for the six months needed to build it, and of course the $100,000 in commissions payable to Realtors if the house sells for $2,000,000…

….and we’re looking at a paltry $250,000 profit for a builder.

Is it worth it?

I guess we’ll find out during “builders versus end-users” on offer night next week.

In the meantime, peruse the photos below of new houses in Leaside.  Which house has the best curb appeal?

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