Table of Contents - Canadian Investing Strategies that Actually Work Time and Time Again with Nick Karadza
Dave Debeau [00:00:08] And everyone, this is Dave Debeau, welcome to another episode of the Property Profits Real Estate podcast. And today it is my pleasure to be interviewing a an old marketing acquaintance that we've known each other for quite a few years, a fellow Canadian real estate entrepreneur and an overall good guy and a rock star in more ways than one. Mr. Nick Karadza. Nick, how are you doing today?
Nick Karadza [00:00:32] Good, good, good, good. Thanks for having me. I just I listed the name of it property profits. I guess if you put one more in there, there's no way I could spend
Dave Debeau [00:00:43] three times in a row. It doesn't work. So Nick for folks is definitely very, very everybody. I'm thinking pretty much everybody, at least in southern Ontario who has anything to do with real estate, definitely knows who the heck Nick Karadzas is. But for some folks, it might be in the States or in other parts of Canada. Can you tell us a little bit about yourself, your background and how you got into real estate investing in the first place?
Nick Karadza [00:01:09] Yeah, totally. So I can I can tell you I appreciate you saying that, but there's a lot of people that have not heard of us or rock star anyone on our team. So even in southern Ontario. But look, I got it started investing in real estate when I was twenty one on my first property. Didn't know any better about a beat down two bedroom bungalow, flipped it, I guess three or four months. The reason I did that was I actually of started I went to a Robert Allen seminar, Robert Allen, Mark Johanson, when they came on their book tour for the one minute millionaire.
Dave Debeau [00:01:41] I remember that
Nick Karadza [00:01:42] they came on their book tour and I went to that and they were talking about real estate. They were doing their their thing for their coaching. And that's a thing. And I'm like I remember sitting there like the guy who showed me the picture on the boat that I can do this. I can invest in reality, too. So that's how I started. And I got started out of frustration. I was working a government job, which I know is the Holy Grail to a lot of people. It was a lot of perks of the government job. I was very frustrated because of the glass ceiling that you were up against for pay raises and responsibility and that type of stuff.
Dave Debeau [00:02:12] You're only twenty one. How did you ever have enough time to start getting frustrated?
Nick Karadza [00:02:16] So, yeah, I don't know. I guess it was maybe working on the construction site when I was younger with my dad, who would like chased me around the construction site to make sure I was working hard and fast enough. Right. Yeah, there you go.
Dave Debeau [00:02:26] From that to a government job.
Nick Karadza [00:02:27] Yeah, but so that's why I started. I was like, you know, I can do more with my time. I have a lot of free time here. I wasn't taking I wasn't showing up a lot of my life to look to do very well in that position. And I wanted I wanted more for myself. And that's what I kind of started looking at, real estate as an avenue.
Dave Debeau [00:02:45] Nice, nice, nice house. So I know you've got a variety of different things. I think you probably do some deals with your brother as well. What's kind of your what's your main focus as far as a particular real estate investment strategy goes?
Nick Karadza [00:03:00] So so we do. So my brother and I have we started out kind of investing ourselves. Then we started doing some stuff together that we do have some things ourselves beyond that. And then the majority is together. And we don't really have one strategy because we do have two properties we would do differently tones. You do buy and hold. We do some properties, we're getting some commercial stuff. So there is a variety of different kind of like areas we're playing in. However, the common theme among them all is that we're looking to buy, hold and own assets. So we want we want to build an asset base underneath ourselves that we can that can support our lifestyle or our lives going forward. And I always kind of buying and selling and entering and exiting markets and generating some cash, which is good. But we after a certain amount of short term cash, we felt that we needed to start acquiring long term assets. And we just looked at other just other countries that have a little bit more history and something than us both kind of long generational family lines like how of these types of people get all this wealth? And we realized that one of the biggest commonalities with owning things and it wasn't like owning things like it's mine, but ninety five percent of it is the banks. Because I owned all this money on the mortgage, it was really like owning assets. So it's a very old school way of thinking in some ways, but it's served us pretty well and we've taken it from some history. Don't get me wrong, we do borrow and we do leverage. But our goal is to, you know, in a perfect world, I would just buy more and more properties and never have to sell it.
Dave Debeau [00:04:38] Yeah, and not only that, but you'd buy them and you'd really be pushing towards owning them debt free. That's a total.
Nick Karadza [00:04:44] Yeah, because it just it changes, it just changes are counted. Once told us this was about principle property. Yeah. Our accounting had been there a long time, started mutual funds with big company that I forget the name. But he said look, he goes that he goes real. The people that I've seen generate real wealth. None of them have a mortgage on the property. It was not a single one. And I'm like, wow, that's really. And again, that was principal residence, but it just started my mind going down this path and I'm like, that's a very interesting point. And then we bought our first property overseas and there was no financing available. We bought it. We bought it all cash. And I was like, wow, this is a really different feeling. Like there's no payments to be made or anything like this is really new to me. And it was kind of cool. So it aligned with everything that we were doing. And and that's
Dave Debeau [00:05:33] just out of curiosity, what kind of properties are buying overseas? I know that's not your main thing, but I know
Nick Karadza [00:05:38] this was so it was a it's a property on the Adriatic coast in Croatia. Our father's Croatian. So so we're right on the coast there. We love it now. There are all the islands and it's a beautiful, beautiful
Dave Debeau [00:05:49] house on my bucket list to go visit that country. Yeah.
Nick Karadza [00:05:51] Hit me up and I'll be I'll meet up with you. And I know some of the best restaurants down there. We're going to enjoy the best views, some of the best restaurants. So we'll enjoy your time. So we plan to rent it when we were there and we liked it so much, we don't have to rent it. We go there for about a month, a month every year. And we are some of our family uses it when we're not there. Some friends have stayed there like we're doing that. We just use it and we actually don't we don't even rent it. So it's it's not even income property. It's like might be the worst investment we ever made other other than from a lifestyle point of view and
Dave Debeau [00:06:25] a mindset at a peace of mind point of view just to have enough places to go to.
Nick Karadza [00:06:29] It's been nice. And the memories of the family, I feel very fortunate that I'm definitely biased towards real estate because of what it's allowed me to do. For ten years, I've been able to take off there for months, every summer, spent a month in Europe going to different cities. My family, which is really nice.
Dave Debeau [00:06:42] That's beautiful. That's awesome. So, Nick, I told you before we jumped out the call, chances are we'll get to some of the questions I sent you. Chances are we'll go completely off the track. So I want to make us in a completely different direction right now because you and I are both marketing nerds. We originally met way back when with the Glazer Kennedy gang and Kennedy being a big girl, Bill Glazer being a big girl for us. So what I'd like to explore for a minute or two with you is some of your ideas and some of your thoughts around marketing and finding good deals and or motivated sellers. So what can you and I know you weren't prepared for that question. I just thought you're the perfect guy to talk to about that. So what's some of your insights or some of your thoughts about that?
Nick Karadza [00:07:31] Well, look, the two biggest things that we did for that that got us the most response. And I have to go back and I don't know, I wasn't tracking things at that time to the point where I knew what would be the most effective. And it gave me the best. Deals are not with them. But the two things we tried the both made the phone rings ring are very, very basic. One was those big signs, those big signs, bandit signs. Are we going to call them on the road with plastic bags? Sign I got years ago when I first started investing, it said I buy houses and it was four one six six hundred I buy. I remember the number because I thought it was I thought it was a marketing genius idea. I buy it like no one's going to forget that. No, let's this is the best marketing tactic ever. And I had a pager. Remember pagers. I had a pager message. Yeah. And it would leave a message on a pager, go off and check the message and call them back. So those signs get the phone to read them. They definitely get the ring. And the other thing we had success with was an old school yellow letter campaign.
Dave Debeau [00:08:31] Yeah. Legal patent.
Nick Karadza [00:08:33] And I'm sure you've probably talked about it in the past. And, you know, for anyone that doesn't know, it's just a piece of yellow lined paper. We would write a letter on it. I mean,
Dave Debeau [00:08:41] if black Sharpie, write
Nick Karadza [00:08:43] black Sharpie. Absolutely. And then we would photocopy it and we'd take it to our printer. Who would like this paper's too thin, I can put it through. So I just do it and it would get jammed, but eventually enough would come out and we sent a bunch of those out. And those works surprisingly well as well because they looked like a legitimate like a like you hand addressed hand each one of those even when the photocopy. But if I had to if I had to do something today, I would definitely I definitely try some stuff online. But those two things you can revert back to the phone will ring.
Dave Debeau [00:09:14] Yeah, definitely. Yeah. That sounds like good old fashioned good old school stuff. And the and the circle at a classified circle ad in the classified section, what people used to read newspapers and all that kind of good stuff.
Nick Karadza [00:09:26] Yes. Some things just you know, the certain some principles of things don't change, you know.
Dave Debeau [00:09:31] Yeah. Well so you guys, I mean, I know you and Tom have created an amazing brokerage, a real estate brokerage. And that's I'm guessing I could be wrong, but I'm imagining that's where a lot of your deals are coming from these days or that's when you're where you're seeing properties. Are there any other things that you guys are doing to create deal flow for your own for your own portfolios?
Nick Karadza [00:09:53] No, I see it's been because of the area that we've been at. Right. So so that area has been such an active real estate market for a period of time. There hasn't been as I mean, they exist. They definitely exist. There hasn't been as much of an opportunity to be able to pick up these kind of like off market deals because anyone can list the property and sell it very quickly at a decent price. So it's limited what we used as we did. We used to do more of that stuff in the past when the market turned. We lost the advantage that way because why would I deal with you guys? I mean, yeah, you can close quick, but you know what? I can put a for sale sign on my lawn and there's going to be five other people lined up to buy it and the locals quick to and they're not looking for favorable terms. They just they just need to get a property rights. So it has made it more difficult.
Dave Debeau [00:10:42] Seller motivation has declined drastically.
Nick Karadza [00:10:45] Oh, my gosh. Especially in the area we play in and we play in typically for residential stuff. We do play in the starter home category and in there's barely been a hiccup even with the slowdown in other areas. There's really been a hiccup in areas we play with the category. So I haven't been able to kind of do much else that way in the relatively recent recent past.
Dave Debeau [00:11:07] Right. OK, very, very cool. So, Nick, I know you and Tom are very, very active, not only real estate investors yourselves, you're also going to a brokerage. Last time I heard you had got those 20 plus people working in your office is probably. Way more than that now, and you're you're rocking and rolling with groups out in your area, you've got real estate clubs and some clubs and branch clubs, and you've got all sorts of stuff going on on the go there. What are what are some of the now that you've been teaching and training this stuff for for a long time, what are some of the biggest mistakes you see people making when they first get involved in real estate?
Nick Karadza [00:11:50] How long? We have 17 minutes. And what are we going to do? There was a one
Dave Debeau [00:11:55] that just popped into your mind first. What's the screw of people?
Nick Karadza [00:11:58] Look, I think there's a lot right. And it depends on the type of person. It depends on what what they're doing. But I think initially, what always comes to mind first is people want to invest mostly because there's some sort of financial reason. Right. So there's always some sort of it's an investment. They want a return on investment, which is great. So there's a financial reason they want to make money. However, there are different ways to make money, even with real estate. And there's kind of a lifestyle decision around that as well. And we're strong believers that you have to figure out what you want that money for. What you're looking for is a short term, is a long term. What are you willing to sacrifice and then build the portfolio around the plan that you're trying to achieve? So put put the stake in the ground and then go reach it instead of just going say, well, I don't know, like Brillstein, I heard I need to invest. Obviously it's a good opportunity. And then they just go buy a property and there's not real much thought into it. There's not real much research into it. And you don't want to you don't have to research too much like you don't want to, just like for three years, try to study investing real estate. You're buying a if you're buying a single family residential property, it's not rocket science. Right. So you don't need that much. But understand what you're doing and understand if that particular investment that the property and the strategy you're choosing to use is actually going to get you one step closer to where you want to be. And the reason why I share this is because my initial goal when I was investing in real estate was I wanted enough passive income passive that you're kind of going to work on. But I wanted a passive income coming in every month. By the time I was 30 to pay off my mortgage. That was when I was after I was like, seems like people are happy when they're done paying off the mortgage. So I figure if I don't have to worry about the mortgage payment, life's going to be kind of good. Right? Remember, I'm twenty one. I don't know what the heck's going on. So I went out and I flip the property. I bought it and rehabbed it and I did some research and did make a little bit of profit and loads of money. But I did make some money. But quickly I realized and that was silly, like I'm trying to get this passive income thing to pay off my mortgage every month for ten thirty. But then the type of strategy you stop me no closer to that goal. And ever since then it's made very clear to me that you have to understand what you're after and then build the portfolio that's going to get you there, because a real estate portfolio, depending how it's built, can take you to ten different destinations. Which one is it for? You build the portfolio for you so you can't
Dave Debeau [00:14:13] decide what that destination is first and then see which strategy is going to take you there.
Nick Karadza [00:14:18] Exactly. Exactly, exactly. Don't do it my way. I did it backwards. I set the destination and then did something that got me not one single step closer. And it was a lot of work to do it. I thought that was backwards.
Dave Debeau [00:14:30] But you got started. Yes, that's that's the thing, right? You can always change course. So you took action. You got started. That's what most people never do. That's good stuff, Nick. And the other thing that's one of my pet peeves is over and over again is what you alluded to, the analysis, paralysis and learning every frickin strategy there is. In the book and then try to do well, first of all, probably doing nothing or trying to do a little bit of this, a little bit of that, a little bit of that, and not getting really good at one thing, right?
Nick Karadza [00:15:02] Yeah, it's amazing. And we do it in so many avenues that like as soon as something's working for us, we're often like, let's go try something else. Well, you know what? You were talking about Kennedy before Ted Kennedy talked about that same speech that he gave them cognitive marketing, one on his success stories. So that story one billion times, I'm sure. But, you know, there's value to figuring out what works for you and then just plodding away. It is not sexy. It doesn't make for good social media polls because you're doing the same thing over and over again. But, man, if you figure out something that works for you and you can create repeatable results for yourself, why why fix what ain't broke right now?
Dave Debeau [00:15:44] Very, very well said. Nick, I told you before we jumped on the call, these things run real fast, I mean, keeping it to 17 minutes means we zip right through. So we're going to wrap up here in about a minute and a half. But before we do, I know you guys, you know, provide phenomenal resources and training and all sorts of good stuff. So if somebody is interested in finding out more about you and what you guys do, what do they do?
Nick Karadza [00:16:11] Best place to go is the rock star inner circle. Just how you hear rock star, inner circle dotcom. And then there's like there's articles, videos, podcasts, whatever. They if they need anything that can be useful there, that'll be the place to check it out. A few of our books are up there if you want them for like like as giveaways, all that stuff.
Dave Debeau [00:16:30] Yeah, I know that sounds good. Now, you guys are based in southern Ontario, but you work with people all over the place are just focused primarily on folks in your neck of the woods.
Nick Karadza [00:16:39] We do as part of the coaching program that we do. We do with members like right across Canada. It's not a big focus of ours, but because of them, what we're doing anyways, it's some people have been like, hey, guys, I don't care that you're there, because within southern Ontario, we're handholding people like on the streets. So we're out on the streets with them across Canada. We can't do that. So some people are like, that's fine. I just want the information anyways. And they're they're interested in that. But yeah. So our our subscriber base for that type of thing is right across Canada. So we we try to provide as much value as possible that's applicable anywhere. And then but the business and the coaching is geared primarily towards the people in southern Ontario.
Dave Debeau [00:17:19] What do you think like the people come to you obviously with. And it's that they want to scratch. What what do you think is the biggest problem you help people saw?
Nick Karadza [00:17:30] You know, I think people are a lot more comfortable getting started when they feel like they have a support system by them. Right. So I remember when I first my first property, I was left the lawyer's office. I was driving along for one, and I almost just started bawling like I had just tears like that knot in my stomach, like, what did I do? I just spent all the money in the world on my worst property. I felt alone, that type of stuff. And I think people a lot of you want to get started and they don't know where to where, where to start. And, you know, just like, you know, how you had to hit people's hands and you helped them. I think a lot of people are like, hey, look, you know, once I have this support system, it gives me the confidence and the ability to move forward, feel like I know where I'm going because I'm following a proven path and not trailblazing,
Dave Debeau [00:18:11] but not going it alone. Yeah, exactly. Fantastic. Nick has been a lot of fun. And again, if you want to find out more about Nick Corazza and what he and the rest of the rock stars do, check out Rockstar Inner Circle. We'll have that link in the show notes. Thanks a lot, buddy. Well, thanks very much for checking out the property profits podcast. And you like what we're doing here. Please head on over to iTunes, subscribe read us and leave us the review. Very, very much appreciated. And if you're looking to create a regular flow of inbound investor inquiries about your real estate deals, then I invite you to attend one of my upcoming live online demonstrations. And you can check that out at Investor Attraction Demo Dotcom Ticker.