(UPDATED with final video) Remediating flipping grow-ops for HUGE profits!

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Emil1753

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Oct 11, 2009
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Hey all.

Many of you have been asking to see some videos on how I find, buy, remediate and flip grow ops in the GTA.


As promised, I will humbly document my newest project for you all to see. If there are any questions please feel free to contact me directly, I'm always happy to help.


It should be noted that this is an advanced and risky strategy and yes big money can be made but it can also all be easily lost with a few minor mistakes. I`ve been remediating and flipping grow ops for the past 4-5 years. I`ve made expensive mistakes when I first started so I`m providing these videos to help you learn without making the same mistakes I made, thus, hopefully saving you tens of thousands of dollars.



Enjoy :)






























Emil Joseph


twitter: @realemil
 
acurAspec

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That is a LOT of work... I am doing a kitchen gut and the whole 9 yards by myself now and it seems like it's neverending with a full time job in between and a wife and a baby. Thumbs up for doing a complete house-- I guess the positive in this is that you can mess around with opening the floorplans even more if desired as you are not restricted at all + the old wood is out of the way! Good luck!



Just out of curiosity-- how many guys can complete this kind of work and in what sort of timeframe?
 
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Emil1753

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Oct 11, 2009
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Great question.

Pulling out all the dead plants and grow op equipment (because the only thing the police do is just cut the plants off at the stem and take the actual buds/bush away. Believe it or not they leave all the equipment, lamps, etc on site for us to clean. I could probably start my own grow ops with all the equipment thats left on site.) Gutting walls, floors, ceilings, kitchens, bathrooms, etc took a crew of 5 guys 18 working days.

Soda blasting, HEPA vacuuming and wipe down will take another 5-7 days.

Once we have clean air samples and clearance from a 3rd party environmental testing company as well as clearance from the Toronto building inspector, chief of fire, structural engineer and Electrical Safety Authority, we will be allowed to begin rebuilding the house.

Rebuild will take approximately 3 months.



Believe it or not...this is considered a quick remediation.

Because of my previous remediations, I have created a strong working relationship with city officials (chief building inspector, chief of fire, ESA, etc...) and now I know exactly what they want and how they want it done.

So when these officials see an email or phone call from me, they know I picked up a new grow op and they know the job will be done right.

It took me many years to get the knowledge to move this quickly. Sometimes most of the battle is with the clearances and permits so it's important to create those relationships.



Emil.







[quote user=acurAspec]That is a LOT of work... I am doing a kitchen gut and the whole 9 yards by myself now and it seems like it's neverending with a full time job in between and a wife and a baby. Thumbs up for doing a complete house-- I guess the positive in this is that you can mess around with opening the floorplans even more if desired as you are not restricted at all + the old wood is out of the way! Good luck!







Just out of curiosity-- how many guys can complete this kind of work and in what sort of timeframe?
 
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Emil1753

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Oct 11, 2009
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In this video I interview Tommy (www.affordablerestorations.ca). He`s the project manager that`s supervising the clean-up and remediation aspect of the grow op I`m flipping.


Tommy shows us what equipment they`re using and the functionality of that equipment.


I also show how well of a job the guys have done since the first video. All the framing has been soda blasted and is now mould free!

Check it out! For anyone that`s interested in possibly doing a grow op as a flip, you`ll learn quite a bit in this video. Enjoy.





















For those interested in the best remediation company, with the fairest prices in the province, contact Affordable Restorations at http://www.affordablerestorations.ca/
 
housingrental

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Oct 10, 2007
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Interesting post Emil



I'd be curious to know:



How did you get into / do your first project?



Any rough guidelines for Toronto on former grow op impacting time line to sell (ie generally XX days more on market?) and price (ie generally 10% discount vs equivilant non grow op, etc.. ? )



How much cash needed for a project like this?



Barriers to entry to doing first project other than cash (sourcing purchase at significantly discounted price, etc..) ?



What area are you doing this project in?
 
RedlineBrett

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Oct 24, 2007
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I havent' viewed the videos so my apologies if you mention this in there.



In Alberta sellers MUST disclose that a property was once a grow op. You cannot buy a grow op, remediate it and then sell it as a normal house without telling the new buyers. To the best of my knowlege and investigation there is no 'statute of limitations' on this. You must disclose when you sell.



This applies even if you pass all the inspections! This usually keeps the sale prices of remediated homes depressed relative to their competition. Some investors still do it to hold as rental properties though.



Is it the same in Ontario? What is the legal precedent there?
 
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Emil1753

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Oct 11, 2009
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Ontario is the exact same.



You MUST disclose that the house was a previous grow-op. Even after remediation and clearances. In most cases it will be noted on title that the house was a former grow-op so even if you were trying to be shady and hide that fact, the lawyers closing the deal would see and quickly put a kibosh on it.



Thats why you have to buy these houses right. You make your money going in.

Even after remediated, a clean grow op will have to be sold at an approximate discount of 10% of its market value in order for someone to be interested in it.



Emil.
 
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Emil1753

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[quote user=housingrental]Interesting post Emil





I'd be curious to know:





How did you get into / do your first project?





Any rough guidelines for Toronto on former grow op impacting time line to sell (ie generally XX days more on market?) and price (ie generally 10% discount vs equivilant non grow op, etc.. ? )





How much cash needed for a project like this?





Barriers to entry to doing first project other than cash (sourcing purchase at significantly discounted price, etc..) ?





What area are you doing this project in?

















Great questions Adam.



About 4 years ago a mortgage broker I was working with approached me with my first grow-op.

A private lender who was the mortgagee on the property took over possession and wanted to unload the property asap. I made an offer and the next day the house (and the headaches) were all mine.

I broke even on my first grow-op project.



In terms of timeline to sell the property, it depends on what list price is of course.

If you're trying to list the house at market price you wont get any bites. If you deeply discount it, you will sell it quickly.



A project like this needs a lot of cash. You can not get a mortgage from any 'A' lenders on grow ops that need remediation. The only option is to buy the property cash. This may mean cash from your pocket or cash from a 'hard money lender' or 'class B' type lenders. These lenders most often demand a higher percentage based on the risk of the project.



This particular project is being done in a middle-higher class neighbourhood on the border of Toronto and Etobicoke.



Emil.
 
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Emil1753

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Oct 11, 2009
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Hey guys,







I finally had a few moments this beautiful Saturday afternoon to upload the 3rd and final video from this grow op remediation project. I wrapped up this project in the summertime and listed the property for $899,900.

Final sale price was $890,000.





So the complete financial breakdown is as follows:





Purchase price : $415,000


Renovation/holding cost and realtor fees: $220,000


Selling price: $890,000


Profit: $255,000





Total project time from purchase to sale: 10 months.














'>http://myreinspace.com/public_forums/f/62/p/132265/%3Ciframe%20width=%22560%22%20height=%22315%22%20src=%22http://www.youtube.com/embed/teVVBQ09AA0%22%20frameborder=%220%22%20allowfullscreen%3E%3C/iframe%3E
























I hope you enjoyed these videos and I hope they help you learn and understand some of the process for remediating and flipping grow ops.
 
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