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Real estate company collapses, 500 homes affected, $10M from investors across Canada missing –



Carolina Abramovich says the investment appealed to both her pocketbook and her conscience.

The Vancouver biomedical scientist is one of 120 investors who gave unsecured loans of between $50,000 and $500,000 to the Epic Alliance group of companies in Saskatoon.

“I heard about Epic Alliance with real estate investment groups, they were really everywhere,” she said in an interview.

“Excellent reviews from anybody that invested with them, small or big. Real estate investment groups, podcasts, webinars — they were everywhere.”

While it seemed to make financial sense, Abramovich said that she also fell hard for the company’s origin story.

“The story behind the company was great. Try to help investors with their investments while providing, you know, affordable housing in Saskatoon. I liked the fact that they were women and that they were promoting trades for women.”

The Epic Alliance group of companies shut down its operations at the end of January. Its investors and property partners learned of the collapse in a 16-minute Zoom call from the company’s founders, Rochelle Laflamme and Alisa Thompson.

“Everything is gone. Everything is bankrupt, guys. It’s all gone,” Laflamme said in the Jan. 19, 2022, video.

Epic Alliance founders Rochelle Laflamme, left, and Alisa Thompson told investors about the company’s collapse in a video meeting on Jan. 19, 2022. (Zoom)


The news of Epic’s collapse went off like a bombshell in real estate and business circles across the country.

Investors wanted to know what happened to their money, landlords across Canada wanted to know who would manage their Saskatoon rental properties and real estate professionals worried about what would happen to the hundreds of core neighbourhood homes.

According to Laflamme and Thompson, Epic Alliance controlled 504 properties in Saskatoon and North Battleford — valued at a combined $126 million — when it fell apart.

The pair spoke to investors in an “E.P.I.C. Hour” video posted in early January, only weeks before the company shut down. The majority of the properties — a combined $115 million worth — are in Saskatoon, Laflamme said on the video.

Through its network of companies, Epic acted as landlord and property manager for more than 400 rental properties in Saskatoon’s core neighbourhoods, including Pleasant Hill, Riversdale and Meadowgreen.

A still from an Epic Alliance presentation to investors shows how the company’s three offerings were related. (Epic Alliance)

It managed these homes for out-of-province investors through its “Hassle Free Landlord Program.” These investors, primarily in British Columbia and Ontario, are now suddenly long-distance landlords responsible for the properties.

Two former Epic employees say that as many as half of these homes are vacant, with many boarded and in dire shape. The fear in the local real estate community is what might happen should dozens, if not hundreds, of these homes hit the market at the same time.

The head of the Saskatchewan Realtors Association says it’s closely tracking monthly stats to gauge the impact.

“We’re not seeing evidence of a crisis in the market, and I think it’s too early for that,” chief executive officer Chris Guerette said in an interview.

“I would certainly think that it’s a crisis for those who have invested, because of the quantity involved.”

Earlier this month, in a separate development, Court of Queen’s Bench Justice Allisen Rothery assigned accounting firm Ernst and Young to investigate what happened to the estimated $10 million to $20 million the 120 investors placed with Epic Alliance.

The company was not licensed to sell investments or offer financial advice, according to the Financial Consumer Affairs Authority of Saskatchewan (FCAA), which issued a temporary cease trade order on Oct. 21, 2021.

In November, the FCAA held a hearing to consider extending the temporary order. At that time, declarations and support letters for Epic Alliance “indicated that the temporary cease trade order was negatively impacting Epic Alliance’s business.”

It was lifted Nov. 16.

Saskatoon lawyer Mike Russell is representing investors looking to find out what happened to the money they gave Epic Alliance. (CBC)

Saskatoon lawyer Mike Russell represented the 120 investors when they applied to have the special investigator appointed. They want to find out what happened to their money.

When asked by CBC to describe what happened with the company and its various programs, he replied with two words.

“Epic fail.”

How it worked

The Ernst and Young investigators are due to present their findings to the court in late April. Until then, a partial picture of what happened emerges through court documents, interviews with former employees and the words of Epic owners Rochelle Laflamme and Alisa Thompson.

CBC reached out to Laflamme and Thompson through their lawyer to speak to the allegations. They did not respond.  However, they did leave behind hours of video sessions posted online in “E.P.I.C. Hour” episodes promoting their businesses.

The pair created Epic Alliance in 2013. It soon evolved into a web of named and numbered companies, including Epic Alliance Real Estate, Epic Alliance Electrical, Epic Accounting and Bookkeeping, and Epic Holdings. It had 118 employees.

They created and ran three main ventures: a loan program based on promissory notes, a “Fund-A-Flip” program and a “Hassle Free Landlord Program.”

WATCH | Sask. real estate company’s collapse leaves investors as long-distance landlords: 

Sask. real estate company’s collapse leaves investors as long-distance landlords

20 hours ago

Duration 2:36

A judge has assigned a special investigator to look into the collapse of a Saskatoon real estate group in January. Epic Alliance managed more than 400 properties in Saskatoon, most in core neighbourhoods. It also had a pool of more than $10 million from investors. 2:36

Russell, the lawyer representing investors, detailed in a law brief supporting the application how it appeared the three Epic offerings overlapped and worked together. His analysis of these relationships is supported by online promotional material from Epic Alliance.

The company built up its $10 million pool of capital over eight years by enticing people to give Epic between $50,000 and $500,000 in exchange for a promissory note.

The single-page notes, of which multiple examples were provided in affidavits, were models of simplicity. They featured the loan amount, when the term began and ended, and the interest rate.

An Epic Alliance promotion for its ‘Hassle Free Landland Program.’ (Epic Alliance)

The rate of return varied from 15 to 20 per cent.

“You have a pool of unsecured funds that can be used for whatever. There’s no specific purpose given for those funds when they’re loaned,” Russell said.

The “Fund-A-Flip” program had investors buying homes through Epic, doing improvements and upgrades, and then selling for a profit. The company’s promotional material suggested a 10 per cent return on a one-year investment.

Finally, Russell said the “Hassle Free Landlord Program” had investors — most out of province — buying homes acquired by Epic through the Fund-a-Flip program. The investor took out the mortgage on the home and Epic took responsibility for everything from finding tenants to maintaining the property.

It offered the investor a 15 per cent guaranteed rate of return.

The promissory note program is what attracted the attention of the government regulator, leading to the October 2021 cease trade order.

The order stated that Epic had given information and advice on how to invest in securities, including real estate investments and promissory notes, without ever having registered as dealers or advisors.

Russell said he first became curious about Epic when the FCAA issued its October order.

“I couldn’t figure out how the products they were offering made sense together,” he said.

In her March 14 fiat assigning the inspector, Justice Rothery detailed how the company had contravened the FCAA order.

“Although the respondents had executed an undertaking to the FCAA on Sept. 22, 2021, agreeing to not conduct any further trading in securities, they continued to engage in business trading and advising in securities in Saskatchewan without registration,” she wrote.

Rothery added that, after the Jan. 19 video call dissolving the company, “As recently as February 23, 2022, the respondents have been selling assets online from their warehouse located at the corporate offices for [Epic Alliance] for cash only.”

Insider view

Adam Elliott began working at Epic Alliance Properties in August 2020 after being a property manager in Saskatoon since 2011. He filed an affidavit in support of Russell’s court application to appoint an investigator.

Elliott says he spotted red flags on his second day at Epic.

“Generally speaking, residential property management works off fairly high occupancy rates. You need to have 70 to 80 per cent occupancy to make your business make sense,” he said.

“They were running close to 50 per cent or lower, which is unsustainable if you actually want to make money.”

Adam Elliott says he had misgivings about Epic on his second day at work. (CBC)

Further, the company used rent projections that Elliott considered out of step with the realities of the homes and their locations.

Elliott said his epiphany on how the company thrived for eight years came when he spoke with his fellow workers.

“I was, like, ‘Oh, we’re an investment company.’ I realized that most of the business, like the way the company was keeping afloat, was through investors.”

The company was able to pay investors a high rate of return, even with low occupancy rates and unrealistic rent projections, by continually bringing in new investors and fresh money, he said. 

Linda Ranks began as a receptionist at Epic and then moved into the administration and property management side. 

Like Elliott, she filed an affidavit and also struggled to see how the company could make good on its financial promises.

“The money didn’t add up,” she said.

“I couldn’t figure out where they would be getting that much money, especially if 60 per cent of the properties were vacant and not even able to be rented because there was so much work being needed to be done.”

Ranks reached a similar conclusion as Elliott.

“There was always more investors and more properties, and that’s how they continued to get money,” she said. She re-iterated this allegation in her affidavit.

Final video to investors

Rochelle Laflamme and Alisa Thompson organized a video call with investors on Jan. 19, 2022.

The 16-minute presentation is where the people with promissory notes learned the money was gone, and where the people in the Hassle Free Landlord Program learned they were, in fact, now landlords.

Linda Ranks says the numbers never added up. (Dan Zakreski/CBC)

Sitting in front of a whiteboard, the pair began with a blunt message.

“Unfortunately, we don’t have any good news, we don’t have any good updates,” Laflamme said.

“We just couldn’t come back from the cease trade order. The FCAA f**ked us, so that’s it.” 

Laflamme did most of the talking, telling investors how “we are trying to hand over 700 properties” and put together “investor packets” to explain how the new landlords can move ahead.

She had a grim update for financial investors.

“Everything is gone, so shareholder stuff — it’s gone,” Laflamme said.

“Everything is gone. Everything is bankrupt, guys. It’s all gone.”

Looking ahead

Justin Howard is a rental manager with Elite Property Management Ltd. in Saskatoon. He said his office started getting calls from new out-of-province landlords within days of the January video call.

“I’ve got 40 people in the queue that want to sign up with us, we’re having a hard time keeping up with all the properties that are being brought on. There’s never really been a situation like this in Saskatoon,” he said.

“It’s very rare in the property management sector to have so many properties just suddenly appear.”

Russell echoed these comments.

“I’ve never seen anything like it,” he said.

The investors he spoke with who are now landlords are still in shock, he said.

“All of a sudden, as you can imagine, your task list just increased significantly from what you intended to do that day, that week or that month,” he said.

“Because now there are a number of things, from utilities to appliances to frozen pipes.”

Russell said he remains troubled by how investors learned what happened.

“The principals blamed the FCAA and essentially said, ‘we’re bankrupt.’ And of course, people use bankrupt to mean we’re insolvent, but they’re not actually bankrupt like they’ve filed something,” he said.

“They did give back the keys to some of these properties … it’s not like they disappeared. They stuck around, they handed out keys and so forth, which was a good thing to do. But typically you’d seek advice and you’d make statements as needed. There’s a process.”

Carolina Abramovich said she’d like to get her money back, but she’s not optimistic.

She wants Laflamme and Thompson held accountable for the missing millions.

Investor Carolina Abramovich says she was attracted by the story behind Epic Alliance. (Submitted by Carolina Abramovich)

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Appraisal company denies claims in Epic real estate probe – Saskatoon Star-Phoenix



The appraisal company named in that report says its claims are flawed, while the prices Epic used cause wider ripples in the local housing market.

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The owner of an appraisal company that worked with a capsized Saskatoon real estate firm insists claims made in a court-ordered investigation are flawed.

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According to an Ernst and Young report into Epic Alliance Inc. released earlier this month, the company bumped up prices on its housing while doing minimal renovations. The company raised more than $200 million from investors, as appraisals typically assigned a value “well in excess of its original purchase price,” the report stated.

David Lazeski of Associated Appraisal — the appraisal company named in the report — disputes the claims.

Epic imploded earlier this year, when company founders Rochelle Laflamme and Alisa Thompson told worried investors that there was nothing left from the seemingly thriving company. That caused around 120 investors to turn to the legal system to find out what happened to millions of dollars.

Saskatchewan’s Court of Queen’s Bench ordered Ernst and Young to delve into the company’s practices and to prepare a report. The probe found spotty record-keeping and “that accurate electronic accounting records of Epic Alliance were not maintained prior to 2019.”

As well, the report stated, “(from) the Inspector’s review of appraisal documents, it appears that, despite their appraised values significantly exceeding their purchase price, many of the homes had not received significant renovations.”

According to the report, appraisals for Epic “were performed almost exclusively by Associated Appraisal Co.”

Lazeski, in an interview with the Saskatoon StarPhoenix, said his company only started doing appraisals for Epic in December of 2019. Epic opened for business in 2013. He said others were doing appraisals for Epic as well.

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The investigator never reached him for comment about the claims in the report, Lazeski said.

Lazeski, who said he did not personally work with Epic, said in an interview that the appraisals were typically conducted one year after Epic purchased the homes. The time elapsed between purchase and appraisal may contribute to the price difference, he said. Another factor may be Epic finding deals on the market, he added.

“Buying that number of houses, during the pandemic, I’m assuming (Epic) probably got some good deals,” he said.

“When we’re doing an appraisal and establishing market value, it’s based on current sales. That’s really the biggest factor.”

Epic bought at least 700 properties, mostly through its “fund a flip” program under which homes were acquired in low-income neighbourhoods in Saskatoon and North Battleford and were then supposed to be renovated for sale.

Once renovations were complete, Epic would bring on an appraiser. Those properties were then sold as part of the “hassle-free landlord” program and Epic leased back the properties to be rented or used for short-term accommodation, such as Airbnb.

The Ernst and Young report compared the total mortgage on each property with the appraisal commissioned by Epic. It found that the average property’s appraised value was $11,325 over the total mortgage.

The report cited one case in which Epic hired an appraiser one year after it bought a property. Photos of the interior “showed outdated appliances, countertops, and cupboards which were not indicative of a renovation occurring. Pictures of two bedrooms had carpet that was visibly stained,” according to the report.

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The home’s appraised value was $260,000 — which is $62,000 over its original price, according to the report.

Kari Calder, a Saskatoon realtor, says the price bump on Epic homes affected her business by undermining trust with clients.

She warned clients that the company offered low prices to find “desperate sellers,” then added new paint or flooring before listing the home at higher than market value. One seller lost her faith in Calder when her home sold low only for it to sell again at a higher inflated price, Calder said.

Calder won back the client’s trust by explaining the pattern she saw, but it’s a slice of a broader issue.

“I learned through a lot of trial and error that almost every Epic listing that came up as a comparable threw my evaluation off,” she said.

Calder used the example of four recent sales valued at roughly $250,000 to $265,000. If one sold for $315,000, she would include it in talks with clients to explain the overpricing of some homes on the market.

Former Epic homes may be entering the market if their owners see they’ve lost money on their investors. That could create a challenge for second-time buyers looking to sell their home for something bigger, Calder said.

“I suspect that the current owners of many of these flipped homes will be the ones taking the financial hit as they are the ones who unwittingly overpaid for the houses,” she said.

The Financial and Consumer Affairs Authority of Saskatchewan and Saskatoon police are conducting separate investigations into Epic.

  1. Epic Alliance Inc. founders Rochelle Laflamme and Alisa Thompson appear in a January video call to explain the company had collapsed. (Saskatoon StarPhoenix).

    Police investigating complaint against Epic Alliance

  2. Alisa Thompson cofounded Epic Alliance Inc., a Saskatoon real estate investment firm that collapsed in January, sparking a court-ordered investigation. Photo taken in Saskatoon, SK on Friday, January 31, 2020.

    Court probe offers look at collapsed Saskatoon real estate company

The news seems to be flying at us faster all the time. From COVID-19 updates to politics and crime and everything in between, it can be hard to keep up. With that in mind, the Saskatoon StarPhoenix has created an Afternoon Headlines newsletter that can be delivered daily to your inbox to help make sure you are up to date with the most vital news of the day. Click here to subscribe.

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What’s Next for the Real Estate Industry?



Real Estate Industry

The real estate industry has never been static, but things have changed here more than normal on several fronts. The skyrocketing cost of housing is not the only major difference.

As technology evolves, disruptors are leveraging platforms to help people make more informed purchasing decisions. They’re also removing pain points along the journey, so buying a home doesn’t have to be a murky, slow, and excruciating process.

Let’s check out some of the technology in today’s real estate market.


Innovators like Regan McGee have made open digital marketplaces where homebuyers, especially millennials, can enjoy transparent data working for them. Compare qualified and verified local real estate agents based on their pricing, service, reputation, and experience level. Then, pick the agent who works best for you.

On a platform where agents vie with each other for your business, prospective homebuyers get further incentives like cashback or improved services, which are likely to be very appreciated given housing costs. As McGee explained to Toronto Life, “People think buying and selling real estate is complicated, but that’s a way for agents to justify their fees.”

Prop tech helps people entering the housing market for the first time learn what questions to ask so they don’t find out hard lessons after it’s too late. Homebuying doesn’t have to be a nerve-wracking, drawn-out process if you rely on today’s leading technological support.

Virtual Reality and Augmented Reality

While the development of virtual reality tech predates the COVID-19 pandemic, the need for remotely viewing property was only made more acute. Pictures and even videos of the property up for sale don’t give prospective buyers granular control over what they’re viewing.

Exploring a property using virtual reality lets you delve deeper into the home itself. Imagine looking at a picture of a home and wondering what’s around a certain corner you can’t see. Virtual reality lets you step inside the pictures and even the video and roam freely.

Facebook, now known as Meta, has people spending fortunes buying a virtual property you can’t actually live inside.

Short-Term Renting

Airbnb was originally meant to allow homeowners to rent out their space while they were away on vacation or for whatever other reason. In the years since, people have purchased property for the sole purpose of renting it out short-term on Airbnb.

Such practices have driven up the cost of living, and not every community is supportive. Local battles between long-time community members who resent living in ghost towns and short-term landlords who aren’t breaking any laws are increasingly common.

Each jurisdiction responds differently, but technology has created possibilities that didn’t exist even a few years ago, and that is definitely something to watch.

Technology has evolved so much in the past decade or so that it’s hard to think of a sector it hasn’t affected. From prop-tech platforms, developments in augmented and virtual reality, and apps that increase your property’s value, real estate is presently different than ever. In a way, the future of real estate is now.

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Canada real estate: When the appraisal falls short – CTV News



The red-hot housing market over the last several months pushed many buyers fighting through bidding wars to put in unconditional offers at high prices.

But now that the market is cooling, some are ending up with mortgages that can’t cover the full cost of their home following an appraisal.

Toronto-based mortgage broker Mary Sialtsis says there are “very few options” for these buyers.

“In the last couple of years, but especially in the last couple of months, I’ve had a few different clients that have dealt with this situation,” she told CTV’s Your Morning on Friday. “Unfortunately, there are very few options when you’ve purchased a property with no conditions and no financing conditions.”

Nationally, home prices fell 6.26 per cent between March and April 2022 after peaking in February, according to the Canadian Real Estate Association. That’s meant some buyers are ending up with mortgages that are more than $100,000 shy of what they need.

In some cases, especially when the down payment from the buy is 50 per cent more, Sialtsis says the lender may just move forward with the mortgage based on the original price of the home, even if the appraisal is a lot lower.

“It’s a case-by-case situation,” she said.

Another option may be to get a second mortgage from a private or alternative lender. But if no other option works, buyers can try and negotiate a mutual release, which usually means forfeiting the deposit.

“For most, they end up going to the bank of mum and dad,” said Sialtsis. “I highly recommend if anyone is in this situation, reach out to your mortgage professional immediately.”

Sialtsis warns that putting in offers without any financing conditions puts buyers at a huge risk, as the buyer is legally bound to close the deal regardless of whether they’re able to get a sufficient mortgage.

“I really don’t think buyers fully understand the impact of those unconditional offers when they submit an offer to purchase a property,” she said. “It becomes a legally binding contract and that buyer is expected to close on the closing date. So, that’s one of the reasons why there’s very few options for this.”

But the cooling housing market isn’t all bad news. For those looking to buy a home, Sialtsis says now is a good time to jump in as buyers have a lot more leverage to negotiate.

“For many Toronto-area buyers, where often we’re dealing with multiple offers… it might be a good chance for you to get in and get a decent property with less competition or no competition and the opportunity to actually include a financing condition,” she said.

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