Investors managing numerous rental condos in Ontario are on edge after SIREG Management, which oversees 1,800 condo units, declared that rent payments to owners can no longer be assured.
In a notice sent to individual investor-owners last week, the Burlington, Ont.-based firm stated they are “currently experiencing market and liquidity challenges that are affecting our ability to make timely rental payments.”
The company couldn’t specify when payments would start again but reassured owners that their ownership of the condos “remains secure.”
Several owners who reached out mentioned they were expecting rental payments last Friday that never showed up.
A ‘serious’ dilemma for investors
“We recognize how serious this is, particularly for investors who rely on these payments to meet financial obligations,” SIREG noted in its statement.
This situation impacts investors and possibly their tenants across 21 condo buildings managed by SIREG throughout Ontario. The properties span small and mid-sized towns and cities like Sarnia, Kitchener, Welland, North Bay, and a notably troubled set of buildings on Kipps Lane in London.
“Without the rents, the bank is going to end up with my properties,” said investor-owner Tanya Petryshen. “I don’t have a lot of room before I’m in trouble.”
The 55-year-old resident from Mississauga owns six condo units run by SIREG. She began her investment journey with SIREG-an acronym for Simple Investor Real Estate Group-after attending one of their seminars aimed at potential investors back in 2013.
Investors drawn to ‘hands-off’ management
Petryshen started by purchasing two condo units in Kitchener for $110,000 each. She was attracted to a model that promised a way to become a landlord and real estate investor without having direct tenant interactions.
“It was supposed to be totally hands off,” said Petryshen, who has condos through SIREG located in Hamilton, Listowel, and Waterloo.
According to this model, investors buy individual condominium units within buildings managed by SIREG. Many of these units were former apartments found in older structures.
Petryshen mentioned that the company charged her $600 monthly per unit for rent collection services and dealing with any tenant issues alongside covering condo management fees. Owners still needed insurance and municipal taxes themselves.
Petryshen indicated she netted about $400 each month from her six rental units-just enough to handle mortgage costs. She hoped once her loans were settled she’d own an appreciating asset along with some passive income.
This notice was sent to owners of condos managed as rentals by SIREG Management. The company said due to problems with ‘market and liquidity challenges’ they can no longer guarantee ‘timely rental payments.’ The news has left many investor-owners scrambling. ()
The rental amounts weren’t as high as she’d prefer; however, she had never missed receiving them until now.
“We were never in the red, but we were barely in the black,” she reflected on how her investment performed.
Warning signs emerged last year
Around a year ago, Petryshen noticed signs that might indicate trouble at SIREG which raised concerns regarding the financial health of the condo board managing the Listowel property.
Condo corporations must keep sufficient funds reserved for maintaining common areas like elevators, roofs, and parking garages. Even buildings occupied entirely by owners can face difficulties if repair expenses rise unexpectedly.
Last autumn Petryshen received word that payment dates would shift towards mid-month. Later she got hit with a $41,000 water bill for her Listowel units (utilities typically covered by either SIREG or tenants). A neighbor whose tenant wasn’t involved with any SIREG investments also alerted her about potential reserve fund issues related to their building.
Petryshen stated she brought these concerns up with Todd C. Slater-the president of SIREG-who until recently had substantial social media influence as both a real estate investment advisor and commentator on investing topics.
“He assured us everything was fine,” said Petryshen.
Then just last week came the notification announcing rent payment guarantees could not be upheld anymore. This message indicated an update would follow via writing by Wednesday September 23rd.
Petryshen immediately tried contacting Slater only to find he wasn’t reachable alongside other managers at SIREG. Afterward , she received an automatic email reply stating Slater was away due to medical leave.
A request made for comment from reached out did not yield any response.
Soon after sending out notices regarding delayed rent , Slater’s social media accounts across various platforms-including You Tube & Instagram-were removed while sections dedicated solely meant informing future investors became inactive links.An image from the Simple Investor website with information for potential investors was taken down last week. (Simple Investor. com)
A few concerned investors chose not disclose identities yet sought assistance via. Several individuals are attempting figure out next steps based comments shared among limited Reddit/Facebook groups formed around discussions involving fellow members invested through S IREG.
An immediate worry is how property owners plan collect rents should operations cease completely since arrangements promoted being low-maintenance; leading some having little contact details pertaining directly tenants residing within those units.
Certain condo proprietors visited their spaces recently-for many it marked first times ever-to inform renters they may need address future payments directly themselves. Online remarks suggest experiences during such visits varied significantly among respondents.
Lawsuits considered by aggrieved parties
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A standout case amongst affected individuals comes from Marcin Migdal based Oakville region. He possesses one unit located North Bay area while simultaneously buying into partnership group established under S IREG designed offer chances acquiring shares respective conversion projects associated varying buildings owned collectively … initially requiring minimum buy-ins upwards $250k!Mig dal fears these particular investments hold added vulnerability since joint participants lack proper titles connected owning specific leased assets capable generating revenue whenever necessary.”Migdal expressed discontentment discussing situations faced surrounding those put into situations whereby family/friends pooled resources creating profitable avenues reliant upon belief promising concept instead …!. p >
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“I’ve talked other players who’ve cashed-out savings relying loved ones contribute invest,” he recounted.”these aren’t necessarily affluent millionaires either we’re referencing regular folks gathering available finances believe strongly idea behind premise offered…”
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Migdal established website designed gather feedback fellow members previously involved(S. I R. E G) players sharing similar stories his goal aims possible route forward inclusive legal action pursued alternative recovery avenues if needed arises.. More than 120 people already submitted information unto him thus far… p >
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While maintaining interest other realty endeavors Migdal remains pragmatic concerning feasible recoveries expected especially amid uncertainty surrounding continued functionality ongoing operation principle holders handling wider community feel supported right now too greatly impacted overall sentiment… ”Even gaining half back without extended wait periods would bring me sense relief,” concluded mig dal ! ” p >
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