Investment group working to boost rental supply in northern Ontario

A new investment group is working to renovate and rent homes in northern Ontario that were part of a real estate insolvency last year.

Out of the ashes of a massive insolvency, a group of investors are working to bring a large number of residential properties onto the market in communities across northern Ontario.

Big North Capital Inc. now owns almost 200 properties in Timmins, the Sault, Sudbury and Kirkland Lake that were owned by a group of 11 companies that filed for creditor protection a year ago.

Weighed down by a debt of almost $90 million, audits of the companies' books showed that the insolvency was linked to a number of questionable business practices and extravagant spending. Officials with the groups are now being investigated by police for fraud.

A group of 177 investors who were victims of the insolvency joined together to form Big North Capital and acquired the properties, which include single-family homes and duplexes.

Some already have tenants, but many others are currently being renovated and will be available to rent.

“We have roughly about 73 properties in Timmins, 82 in Sault Ste. Marie, 25 in Sudbury at about 14, give or take, in Kirkland Lake,” said John Alegrias, Big North’s vice-president of real estate operations.

“Most of them are vacant and … 90 per cent of them are duplexes or … single-family homes.”

The properties with tenants are welcoming Big North, Alegrias said, and the company is committed to helping to ease the housing crunch by renovating the empty properties.

Additional rentals on the market come at a time when officials say there are few listings available.

Amanda Denis, president of the Sudbury Real Estate Board, said the market could use the additional properties.

“The rentals are very tight,” Denis said.

“I think that’s why we have been so busy even throughout December and now through January -- people are really going to those homes.”

While the homes “may need a little bit of work,” she said they are in demand.

“Students don’t really care what it looks like,” Denis said.

“People are scooping them up and renting them out as fast as they can.”

But housing advocates said it’s concerning that the insolvency happened in the first place.

“There was no regulation at the government level or at the banking level to, you know, raise a red flag,” said Dania Majid, a lawyer with the Advocacy Centre for Tenants Ontario.

“It’s a concern to us that there aren’t any government regulations to prevent schemes like this from happening.”

Alegrias said Big North wants to get the word out that they are a new group and have nothing to do with the group of companies now under investigation.

“There’s been a big misconception of Big North that we’re associated with the other people,” he said.

“We’re not the old property management companies. We’re totally new.”

Alegrias said next steps will be renovating the units. He expects properties requiring minor repairs will be ready to rent in a few weeks, but those that need more work will be ready within a year.