Family, Business, Community and Fiscal Policies with Nick Karadza

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Podcast Transcription

Georges El Masri [00:00:01] Welcome to the podcast, where the goal is to motivate, inspire and share success principles. I’m your host Georges El Masri and thanks for tuning in. It’s your host Georges El Masri. And today I interviewed Nick Karadza, who is the owner or the co-owner of Rockstar Real Estate, which is a brokerage I used to work with. For those that don’t know they do, they specialize on working with investors. And the reason that I want to talk to Nick is because him and his brother extremely knowledgeable. They’ve been investing for a long time. They’ve seen a lot of changes. So on this episode, I talked to Nick about his beginnings in real estate investing. He talked about buying a property in Mississauga for about 150000 at the time, digging up the foundation himself. And then we talked about the power of Real Estate over time, what it’s done for him, how he started investing a couple of years ago and then what happened with those properties you told me about not selling anything that he owns and the reason behind it, and then also talked about how his life has changed from owning these properties for, like I said, a long period of time. We touched on Croatia traveling over there, bringing the kids and creating this life that he wants going there on vacation every single year. There is a lot of good stuff in here. Touched on family fitness while all these things. So if you guys are interested in the episode, I would encourage you or ask you to leave us a review. Let me know what your thoughts are. And then also on the Apple Podcasts platform. And then also make sure to subscribe on YouTube and share this with the friend or family member. I want to get the message out there. Thanks for all your support. Truly appreciated. And if you want to connect with me about some multi-unit investment opportunities that I have in the Nag region, just go to the website. Well, after HCA, contact me from there and I’m happy to discuss. Enjoyed the episode! All right, I’m here with Nick Karadza Last year I came here and I interviewed a brother, Oh,

Nick Karadza [00:01:55] this will be better for sure.

Georges El Masri [00:01:57] Yeah. So, um, the way I start off is by asking you a little bit about your childhood. So where you grew up and couple of things you remember, I heard Tom’s take on things. I’m curious to hear yours. All right,

Nick Karadza [00:02:07] so I’m going to tell you how Tom picked on me Real Estate while as a kid.

Georges El Masri [00:02:09] Yeah, pretty much so.

Nick Karadza [00:02:11] You want to know where I grew up, etc.? Mississauga middle class family I was. We had a good childhood. We had both parents were around both parents. Our dad was Eastern European, was around less because he was kind of hanging out with his friends was more of a priority. You know, playing cards and bunch that was like in that that culture, that’s kind of how things worked.

Georges El Masri [00:02:29] But yet he played. Yeah, the blond bowling. Yeah.

Nick Karadza [00:02:31] Oh, like Italians. Like Italians? Yeah. OK, cool. So yeah, they saw our father’s Croatian mother, Scottish, but the Croatian, especially on the coast where he’s from the Croatian coastal culture and Italian culture. Same with diets and stuff like that. A lot of similarities. Very, you know, a ton of similarities there. So um, but yeah, we were lucky, man. Both, you know, so you know, I was learning some things the hard way as a kid and some things the easy way. But uh, but yeah, overall, it was good. Even my brother, my brother didn’t like I saw some other siblings didn’t pick on me the same way and stuff like that. I learned some things that he did to me that torment me a little bit afterwards. I didn’t realize he was tormenting me at the time, but yeah, yeah, it was good. So, yeah, born and raised in small area. Did you get, by the way, we didn’t. We don’t really fight that much. No, we’re five years apart. So maybe that’s why. So we didn’t kind of like our two groups of friends were separate, completely separate. Yeah, right. So maybe, maybe that’s why, like I think sometimes when siblings were a little bit closer and the kind of friends kind of overlapped, it led to some, some larger issues, whereas for us, it wasn’t so much.

Georges El Masri [00:03:35] Yeah. OK, cool. So I know. OK, so you guys grew up in Mississauga. I know kind of the back story. Your dad. One of the big things you guys always share is how your dad was flipping a higher end home at one point and he got caught when I think interest rates went up and then you guys couldn’t really sell that house, it was a flip. And that experience kind of brought you on the course to towards thinking about, you know, like not putting your family in that situation moving forward. Can you tell us a little bit about your story? Like, how did you get what got you really interested in investing in real estate?

Nick Karadza [00:04:09] Um, so the way I got started was I finished school. I finished high school, I guess was in college, and I just I was always someone, something that I was that always appealed to me as I always tried to figure out the system. So even in high school, I wasn’t really a complete kind of crap disturber. But as you say crap, because I’m trying to keep it very nice on your podcast.

Georges El Masri [00:04:29] Mine is pretty clean.

Nick Karadza [00:04:30] Yes. So I wasn’t trying to, you know, it wasn’t that, but I always tried to figure out different angles and try to figure out how to kind of work the system a little bit in school. And so I was always that type of person. And then as I went through college and, you know, started working in I.T., I was working on it. Again, I was trying to figure out the system and the way the system was structured at that time. I’m like, I don’t see how this lines up with where I want to be and what I want to be doing. So I started looking for more. Are options, and that’s when I started reading different financial books and trying to get an understanding of that type of stuff. And then it was it was one of the traveling roadshow kind of conferences for Real Estate education. It was a U.S. company at the time. At that time, there was almost no Canadians really doing kind of organized Real Estate education, and they were coming. It was Robert Allen with Mark Victor Hansen. They came around and they had recently released a book, The Color that was called the one minute millionaire. And they, you know, so they’re like, Oh, if you want to discuss the one minute millionaire, whatever, come to this thing. And it ended up being the kind of the promotion, the introductory night and the kind of the sales presentation for their Real Estate training program. And I subscribe to it, and at that time it was about 5000 bucks for the weekend. It was like two and a half days in a hotel banquet hall. The models changed a lot. Now, now I think people charge 20 30 grand for it, for that type of thing, but they charge less at the time they try to upsell you on the courses. I think now they’re charging you like a couple hundred bucks for people that try to absorb them. But so that’s why I got started. I mean, that’s that was it, you know, and then I was just one of the few people that kind of took the information and did something with it. So the first property I bought was in poor credit area Cophura and Lake Shore for anyone familiar with the soggy area. It was on a dead end street right behind Carthage Park Secondary School. It was a two bedroom bungalow. I bought it for 158. I flipped it four months later. It sold it, sold it for two or nine, right, which today’s prices. Just think about that. So like, I’m the old guy, right? Like, it’s 20 years now or whatever. So I did that when I was 21. I’m definitely the old guy flipping properties of that personnel. Now you can. You can barely get a parking spot for 158 downtown. Yeah. So but at the end of the day, I only made four thousand bucks and I did a hell of a lot of work

Georges El Masri [00:06:38] with the one where you dug up the foundation to a waterproof.

Nick Karadza [00:06:41] There’s been multiple that I’ve talked with the foundation, but that was the first one. Yeah, okay, that was the first one. Do you have a ton of lessons I like? I look back and wouldn’t have got me to the next step if I didn’t start with that property. Yeah, but it was literally the crappiest property I could find is the one I went and bought because I had no money. Like, look, I was twenty one year old. I took all the money I had in the world at that point and I went and bought the properties property I could find.

Georges El Masri [00:07:04] Do you remember how much you had to invest at that time for that property?

Nick Karadza [00:07:06] Yeah, I still have all the numbers. I’m pretty sure it was about, well, I mean, four thousand bucks with a profit and then it’s after commissions and expenses and everything. Yeah, so I want to say it was in the thirties. I think it was like a mid-to-high or 30 or

Georges El Masri [00:07:19] something like that. That’s pretty good, though, just thinking about it because I don’t know too many 21 year olds even today that would have 30 grand all like I feel like a lot of people don’t save money really that well, kids, I’m saying, Yeah,

Nick Karadza [00:07:29] so I didn’t either. So I thought, well, I saved money, so I had the money to buy it and I had some funds. But the rest of it was on a very small, unsecured line of credit I had with I at the time and some other little bit of a loan or credit cards or something like that. So I had, I’d say, probably about I had half that amount for that. I had the amount to purchase it with whatever minimal down payment I put. I guess I was, I guess I put five percent down the least amount I could put down. I would I would have put down and then I probably had extras for about half the renovation costs and I use some debt and stuff like that.

Georges El Masri [00:08:00] Do you do you ever look back and see what it’s worth now that that same? I did.

Nick Karadza [00:08:03] I did. So I look back. So the last time it sold was in 2015 and it sold for man. I’m drawing a blank. I think it was about 600 grand at the time. That’s nothing, but I know it was about. But yeah, that’s seven years ago. Yeah, but now it’s worth probably one, you know, jump out a million bucks. I for sure. Well, everything’s money box right now. Yeah, yeah,

Georges El Masri [00:08:23] yeah, for sure. It’s probably like one point five. I’m guessing somewhere in that there

Nick Karadza [00:08:26] there’s a two bedroom bungalow. It was fairly small, right? Like it’s a two bedroom bungalow still. So yeah, it could be, you know, it’s a, I think, a conservatives like a million bucks, I think, you know, especially to the right now, you know, but yeah, maybe as high. Maybe, I mean, for one point five, it doesn’t matter regardless, because I’m thinking to myself, I should accept it. Yeah, but the big lesson I learned very quickly then and it didn’t take me very long to look back on that and learn, is that why the hell did I sold that property like, you know, you know, like it, just it made no sense to me that I sold it. But that’s what I had seen in real estate. And that’s, you know, in those then that initial course, which got me started, I’m not knocking the course, but it was always these strategies of what it’s like. They really focus on the quick money strategies because they try to make it like there’s this quick, easy money in real estate, and that’s how you’re going to make it. And then I’ve learned now as anyone that I’ve seen business make have sustainable success in real estate. It’s not about that at all.

Georges El Masri [00:09:18] Yeah, for sure. You know, so you don’t you told me, like before we start recording that, you basically don’t sorry, don’t sell your properties. But is there like no exception to that rule? You just keep it regardless. Like even if you bought this, let’s say, 15 years ago, it was a small two bedroom bungalow and it no longer cash flow. You still hold on to it.

Nick Karadza [00:09:38] Well, of fifteen years ago, it’s cash flowing.

Georges El Masri [00:09:40] Well, if you never refinanced it or never leveraged it, right?

Nick Karadza [00:09:43] Yeah. Yeah, there’s exceptions to every rule. So if a good opportunity comes up and I need to trade in something for another opportunity, then I’ll sell it. But to sell it just to cash out some cash. And you know, maybe I’m in a fortunate position that I don’t need these lumps. Sums of cash it presents. The question is, where would I put that money, right? And that’s what I that’s what I ask other people. I’m like, OK, great. So the property I cash out, whatever, let’s call it two hundred fifty grand. Yeah. Now what?

Georges El Masri [00:10:16] Yeah, because you don’t want to hold cash.

Nick Karadza [00:10:18] Well, no, I don’t want to hold cash. I don’t want to especially like I mean, the last couple of years have been proof like, you know, if you’re holding cash, it’s just withering away. So then now what do I do with it? And I know there’s options in other stocks and things like that like, you know, there are those options, but I mean, the Real Estate Erwin performing so well for me and it gives me an income stream. I get to refinance it. I get to refinance a thing. Yeah, but I can’t go to, you know, I still have mutual funds in like a I even know it’s called rare for something I locked in like I used to work at the regional had a government job. So I have I don’t know what the number is like 20 grand in these mutual funds. It’s amazing and 20 years of 20 grand is not. It hasn’t gone up, hasn’t gone down. It just stays at twenty. I don’t know what happens, but like, you know, so I see what happens there. I can never refinance those things like it doesn’t get paid off for these things. I can keep tapping into it. So I just don’t understand the logic. So I’m not tied to Real Estate. I could care less. You could tell me you simply want to buy water bottles. If I could do the same thing with water bottles, I’d be doing it. Yeah, right. But I just haven’t figured out how to do that yet.

Georges El Masri [00:11:16] Yeah, I guess so. What I’m saying is like, let’s see this two bedroom bungalow. There’s a cap on the rent. If you refinance it to the current value, it might not cash flow. It might be cash flow negative. So would you avoid that situation where you just like refinance to an amount where it’s at least break even?

Nick Karadza [00:11:33] Yeah, yeah, yeah. It’s so yes. See, the reason I hesitate is there’s two answers, right? There’s the answer is that they might give to my kids if they were asking me, and there’s the answer that I’ve been doing myself. So I’m not refinancing a lot of my properties. There’s a bunch of equity sitting in those properties. And again, maybe I’m in a fortunate position because they don’t have that need to be able to do it. And I also have this belief that you don’t have to then refinance every property to continue to buy more and more and more properties if you don’t want to. Right? Like, like in a lot of Real Estate communities, there’s this thing about more is better. You know, it’s like, well, how many doors you have. It’s like, Oh, this person has fifty two doors. Yeah, that person only has five doors. So that person. But if those five doors are paid off and those fifty two doors are leveraged up to the, you know, the gills, then I mean, it’s the same type of portfolio. And in fact, I’d argue that I might want the five doors more because the stress involved, you know, I mean, I have a bunch of equity. I have I have free clear cash flow. I have to worry about a bunch of JV partners, a bunch of tenants that, you know, like so. So that’s why I hesitate answering it. So 100 percent, I would refinance properties.

Georges El Masri [00:12:44] Yeah, I mean, if you’re in a position where your income is high enough to allow you to continue to buy using the income you’re producing, then you don’t need to refinance. But I guess some people, they don’t have that ability. They’re not making enough that work or they have too many bills to pay, you know, that sort of thing.

Nick Karadza [00:12:59] Yeah. And I have refinance properties and I will continue to refinance properties. But early on, especially right away, like we were buying properties, we were doing a bunch of work to them. We were getting them appraised and then refinancing, taking equity out of the park and putting into another property. So one hundred percent, I would do it. I don’t think I would do it up. I’ve never done it to put myself in a negative cash flow situation. I don’t think I would do it unless I was fairly certain that it would be short term to answer your question more directly. But I guess it’s just not my favorite position to be in.

Georges El Masri [00:13:28] OK, so you were saying that if you were to give your kids advice, the answer might be different. So what would you tell them when you tell that? Would you suggest refinancing so they can grow their portfolio?

Nick Karadza [00:13:37] Or what would you say? Yeah, I think there’s stages as an investor. Yeah, I think so. Like when I started investing, it was find me like, I’ll find the property. How do I buy this property with a like? Can I give you a nickel as a down payment and can the bank fund the renovations like I want to? I have very little. So like, I just want properties. How do I get those as you, as you kind of them mature as an investor, you might not want to get into those types of leverage situations the same way. Right. So I think it’s that, I think kind of their life cycles. So and I would or the stage is more of the life cycles, and I think I would try to explain that to them. One thing that I think that personally, I didn’t learn this until we brought we have a property in Croatia that was the first property that we bought cash, right? Because no finance really available. There is a Canadian. Buying a property in Croatia doesn’t really exist right now. So we bought this property cash and it was really weird the first time we were there and I was like, This is strange. If we have this property, they don’t have, they have a fairly high land transfer tax there or the equivalent of land transfer tax with no real ongoing property tax. So your only payments are some, you know, in the winter, some heating payments for electricity. So like, you know, electricity and water. So it’s almost nothing and I’m like, This is weird. Like, this is the first property I’ve owned like and we’ll talk to Tom and me both. But it’s like there was no payment like this is ownership. And that’s when I started looking more seriously into this ownership of assets. And I think it’s something that in our society that we use so much debt for everything. I think it’s something that’s lost. And I think a lot of times that, you know, debt can be used wisely, and that’s great. But I think then there comes a point where you want to own things. You don’t want the bank knocking on your door, the government or whatever. There’s this ownership, and it changed my opinion on stuff. And that’s probably one of the reasons that I’m comfortable not always refinancing things and using debt all the time because I’m like, there’s something to be said for just like, This is my asset. Leave me alone. Yeah, yeah, right. And if you know, if you talk to some people like families that have generated, you know, a fair amount of wealth over generations, that’s really how a lot of it came to be. It’s from ownership. Yeah, you know, not from always using debt. The debt has to go away sooner or later. So it’s just at what point do you want to do it? Sure.

Georges El Masri [00:15:58] Well, that brings me to well, that makes me think of another question that I had for you. So how long is when you started investing? How long does it take before you start really seeing it change your life or impacting your life financially? Know, because I first, you know, you’re not really making that much cash flow if you just have one or two properties your equity is building, but it doesn’t really impact your life that much. How many years does it take in your experience before it really starts taking

Nick Karadza [00:16:22] longer and longer than you wanted to? That’s for sure. It’s weird because you buy a property, you have a few hundred bucks a month in cash flow and it’s just like, Oh, that sucks, okay, that’s not going to do anything. Yeah, I don’t have a solid answer for that, I think it depends for me personally, it just depends on the type of property. So, you know, one of the early properties I had, it was with a friend. We bought it. I was a student property by McMaster. Still own it today, actually. And we renovated it. We refinanced. It took all our money out. Well, this was within the year, took all our money out. Thin cash flow still very strongly as a student rental at the time, over a thousand bucks and then we were able to use that money and go buy another property. And I think that’s when I saw now I did a lot more. There was a lot more sweat equity at the time. I was younger. I had more time for him and I were doing a lot of the work ourselves. But that’s when I started seeing like, Wow, this gets interesting all of a sudden, like I can, you know? So it was. And it’s weird because it’s a kind of counter. It goes against what I just said about owning assets, whereas I was buying refinancing, using that debt to get my money back and then trying to buy another property with as little down payment as possible, right? So that’s what I meant earlier about the different life cycles. So I don’t know. It really depends on what you do. But I would say what three to five years you start. I would say just a few years, and you can look back and be like, Oh, wow, this is getting interesting because the equity starts being built up just from the mortgage paid out. I’m not even talking about the potential of appreciation or whatever. And also, you have this equity. There’s this little bit of cash flow. Things have settled down because whenever you get new property, there’s always a few things that come up is like when you move. If you buy a new one for your own family or yourself, there’s always a few things that the owners didn’t tell you. They’re like, Oh, they didn’t tell me about this little thing broken, right? So there’s always those things you got to deal with, and then all of a sudden it settles down. You’re just like, Oh yeah, this is starting to look good. So, yeah, it’s years. It’s definitely years. But it’s not too long, I guess.

Georges El Masri [00:18:16] Maybe more specifically, I would like to know just from your experience, when does it start to impact your personal life, where you can use some of that money and, you know, buy a car for yourself or not that you would necessarily do that, but you can go on vacation more often. Is that do you rely on your assets for that or is just that happens from your business grant

Nick Karadza [00:18:34] was bought with like with. It depends on who you are and how you structure things, right? So I can tell you with the investors that we’ve worked with, we’ve seen people that have that now. They came up with a chunk of money. Yeah. But after a year, they’ve left their job and they were just living off the properties, you know? And then I’ve seen some people build a portfolio after 10 years of 15 properties and then the liquidate one or two, they pay off a bunch of debt and they quit their jobs and they live off the rest. So different people have kind of a different approach. I’ve seen I’ve seen it right across the board. Sure, right. For me, I don’t know. I, you know, I don’t really know. I don’t remember when it did that because I was focused. I was still working. So I was focused on just getting more. I wasn’t focused on changing my life. I’ll just focus on getting more than we started our business. So it didn’t. It didn’t, really. There wasn’t that moment for me where I can look back and reflect, and for me it was that. But I’ve seen other people, it just ranges and what they’ve done. Sure.

Georges El Masri [00:19:25] When it comes to family, how have you been able to kind of balance out your business and your family because you guys started Rockstar like twelve, thirteen years ago or something like that? I think it’s 14 now or two.

Nick Karadza [00:19:37] Yeah, yeah. Let’s hear. I just go by the hairline as it recedes. It’s longer, so I see you looking at my hair now. What do you think of that?

Georges El Masri [00:19:44] So, yeah, so OK. So balancing it out, how have you been able to do that? Do you have any like maybe regrets about maybe working too much, spending too much time on the business? Or do you feel like it’s been pretty balanced?

Nick Karadza [00:19:58] Um, I feel like it’s been pretty balanced. I don’t because I’ve done better. Yeah, for sure. Like when my kids are still young, but I make a lot of their stuff a priority. You know, like my daughters are in different sports and extracurricular activities and I’m there regularly. It’s not like I’m there once, even once a month. I get like my one of my daughters and horseback riding. I’m at the farm multiple times a week with her, you know, and I see what she’s doing and stuff, and it’s very cool. My other daughter is now in cheer and voice, so she we don’t we because COVID, we have been able to watch the voice lessons. But you know, so I’m involved that way and I don’t miss. I’ve gone to things. I’ve gone to the school as a as a parent at like different field trips and stuff like that. Like, I’ve done that that whole thing. So I try to so we do our best to maintain that. But I mean, there’s some sometimes when we’re pulled a little bit more towards work than we want to be. And but I think I think it’s I think it’s been pretty good. I think it’s pretty good. It all comes down to what you prioritize. If your family’s really a priority to you, then you’ve got to treat it like a priority, right? And that’s, you know, like there’s certain things like if I have things with my kids, like, I put it on my calendar, it’s not just like, Oh, well, I hope I get home in time to be able to see that like, it’s a priority no different than when we bought this. It’s in my calendar. And I think a lot of people don’t do that with the family. The family gets well whatever’s left over after I deal with this other stuff. So just like our vacations and things like that, like, you know, we’ve been fortunate for the last what’s it now? This will be 12 years straight. We’ve gone to Europe. For a month, every single year, that’s a family vacation. So they’re able to do some of that stuff, too. So that alone is been really nice and I think my kids love it. I’m trying to ruin it for like I have two daughters, right? So I’m trying to ruin it for any other guy that comes along because they have to be like, Hey, you know, I used to go to Europe for a month every year. Like, are you going to be able to? Are you up for that or what? Right. So I’m trying to planting these landmines ahead of time. But yeah, so I think it’s been I think, you know, I think I’ve done an OK job. Could it could I could I do better 100 percent. But it’s something that I’m conscious of on a regular basis, and I find myself, I have to tell myself sometimes when I feel rushed and my daughter’s trying to show me like the new fidgets that she’s dealing with, you know, which is one of those things I’m trying to pump back and forth. Don’t really do anything. And you’re like, Why are you playing this? Like, This is a toy? And why did I spend money to buy this for you? It’s one of those things that she will, you know, when she’s like, Look at this and that, and I want to be like, Oh my God, I just want to go and deal with this. I have to find a conscious after myself, like, Hey, like, you’re not going to get this chance again to be right here with her right now. So I try to do that, you know? So I definitely it’s not like it’s easy. It’s there’s a conscious effort made to kind of push back towards that door.

Georges El Masri [00:22:45] So you said your kids enjoy going to Croatia. Do they have like family there or is it just you guys, just you and Tom and the kids or?

Nick Karadza [00:22:51] Yeah, it’s so we do have some family there. Yeah. I don’t know how much they enjoy the family aspect of it because they’re at that age. They’re just like, I don’t speak the language that much anymore. You know, we’ve gone to like my dad’s old village and senior and my youngest daughter is like, It smells here. Why are we here? Like, that’s where food comes from David and Juliet, right? So there is some family there. We go for a portion ourselves. We try to overlap with Tom’s family as well. So we’re all there together because it’s kind of cool with the cousins and with everyone there. So that’s kind of cool as well. And then on the way back, what we do is we usually pick a different country every year that will go, we’ll go visit, so we’ll stop over there as well, something like that. So last year wasn’t on the way back, but like the last few years have been, I think it was England with one year Italy, another year went to Venice. It was London, Venice and then we were in Greece, went to Athens, some of the islands last year. So, you know, they just they like travel. I mean, we forced them to travel and they’ve both traveled since. But every year since birth, they’ve been over there. So it’s like, that’s what they know. So it’s just it’s a combination of the experiences and learning and then the family as well. But they really like, I mean, they tell us they like it, I don’t know. But right now they’re telling us they like it. The point will come when their friends are going to become more important to them than us, and they’re going to be like, I don’t really want to go, I want to stay here with my friends, you know, so we’re kind of taking full advantage of it now. I figure my oldest is a shall we? 12 this year. So I figure we have a handful of more years before she starts kind of doing that. So we’re trying to take full advantage. But yeah, I think it’s just it’s more the experiences they like us to like. We definitely enjoy seeing other cultures and doing other things, and we drag them along for the ride. Since I’m very, very young age and awesome.

Georges El Masri [00:24:30] So I want to kind of shift things over a little bit. Talk about your business, Rockstar Real Estate one night. One thing that I’ve noticed about Rockstar is the community, the feel of like investors helping each other. There’s a rockstar community. How did you guys create that

Nick Karadza [00:24:47] say by accident? Like, there’s no conscious effort put towards creating that. I think the goal for us and I think where it might come from is that. Rock star was really born out of just trying to help people share information, and I think naturally, the people that like that type of thing are people that then also share information with others. And so I think it’s just been kind of like a happy accident that just the structure of the business because of the way it’s formed because of all the classes and the trainings and the reports we give away and stuff. People that like information are also people that usually like to share information because that’s what they like to talk about and stuff like that. So it’s just kind of been that way. So we’ve been fortunate, we’ve definitely been fortunate that way. And then also as we’ve grown and there’s just a larger community, naturally, there’s going to be a larger number of people that want to share stuff. You know, there there’s more people sharing stuff now than when there was 50 investors that we were working with. And it’s just, you know, and sometimes those people are louder voices or give back, give back more.

Georges El Masri [00:25:55] One thing that I noticed, or at least this is just my perspective you probably have more information than I do about this, but it seems like the people that are part of the rock star community are not typically part of other community like investment communities in Ontario. Like, you know, there’s a couple of big ones that people know of. But you guys have like this exclusive group of people that just are loyal to the brand and just stay within the community. It’s pretty, pretty cool to see. Would you agree with that?

Nick Karadza [00:26:20] I have no idea. We’re so heads down and what we have to do. We don’t really know. But at first glance, like, you know, at first thought, I would probably say no. Like, I know a lot of I know a lot of even our members have started other groups like they have other groups in other areas. I know multiple ones that have done meet ups and some of the other community communities. Some people don’t even know that some people that have these other groups were longtime rockstar members, and we’ve helped them formals other groups. So but I do know a number of people that go to different meetups or, you know, events and that type of stuff. And so I don’t I don’t know. I think investors, you know, real investors are looking for information everywhere, and they just go to where they can find it and what they feel is valuable to them. So maybe there’s a percentage of people that come here and they find value here and they’re happy with it, and there’s a percentage of people that will go searching elsewhere as well. Yeah. Right. So the one thing we don’t do at any of our events or anything is we don’t have people up there pitching and selling other stuff. Yeah, right. And that’s something that I think some people it’s a little bit less. It’s um, it’s not as common. And I think sometimes people like that because they’re just like, Oh, you just go or you get some information you leave. There’s no that’s kind of like it, you know, so maybe that. But overall, I think people are searching for, you know, for things everywhere.

Georges El Masri [00:27:52] Yeah. For those that don’t know if they’re listening to your life, you’re in terms of, I think that happens quarterly or it typically happens quarter.

Nick Karadza [00:27:58] It was quarterly. It was too much work. Yeah, it’s three times a year and we’re like, Oh, how do we get this down to two times a year? So but it’s three times a year right now.

Georges El Masri [00:28:05] And you used to get anywhere between like six to 700 people in a room, usually before the whole COVID stuff happened. But yeah,

Nick Karadza [00:28:13] yeah, a little bit more than that. But yeah, overall and then we’ll be going back to we’ve been doing the virtually, but we’re going back to we’re going back to in-person the talking to your computers. You can only do that for so long before you go crazy, right?

Georges El Masri [00:28:24] So yeah, those are really cool events just to have that many people in a room. Like you say, you’re not pitching anything, you’re just sharing information. Do we want it to? Because I know you just had an event. We’re recording this in February. You guys just had your like your terms event. Do you have any statistics you want to share about new housing where the market’s headed?

Nick Karadza [00:28:42] Oh, man, that’s a loaded question. That was that was, you know, three or four days of aggregating research for a 45 minute presentation, 110 slides I could share with you. I don’t know. I don’t think so. I think just the biggest thing is like the headlines are B.S. almost saw again. So I stopped myself. But headlines are B.S. You just got to look at what’s happening behind those get a true understanding. And I think so many people get caught up in the headlines and everyone’s busy and they don’t have time to look behind it. And it’s tough and I get it. But when you see a headline about like, you know, maybe Real Estate undersupplied and they’re going to need all this housing, yeah, OK. Maybe that’s true. Right? And you know, you want to believe that as an investor, you want to believe that’s true. You’re like, Oh, this is great for my properties and stuff. But why is it like, why is it like that? Go a little bit deeper and try to understand, get the information behind it and see if you agree with that and then do it. Because the way a lot of the headlines are formed is something gets released or a press release or a number of reporter picks it up. And this is this is their job, especially in today’s world with so much content, they just pick it up. They put a good headline together. They get that stat. They put three or four paragraphs at the top or the bottom. They call someone in the community somewhere to get to one or two quotes. Boom article pushed out like there’s no real thought behind it. So I. I think our job as investors for our own portfolios and for what we want to do with our investing is our job is to then look into that information and find out if we agree with it or disagree with it, because just because it comes from a certain source, it doesn’t mean it’s accurate. A great example is I’ll pick on see on the government, for example, like picking on the government. Yeah, right. CMHC when COVID hit, what does he say? Property prices are going to drop by. It wasn’t a twenty eight percent or something. It was a big number. And we were looking at these numbers, right? Like, I don’t get this like me. I remember doing one of our podcasts and I said, I go, I think it’s irresponsible that they even put that out there. Like, it’s completely irresponsible. They did that. And not only that, they didn’t drop. And I’m not saying this is because Real Estate is obsessing over the reason they didn’t drop is because the government pumped all this money into the system. The same government, the run CMHC. Right. I know it’s independent, but it’s not really independent, let’s be honest. So it’s like, how can they say this stuff? We know someone that’s sold their house because of that headline. They sold their house. They have to buy in six months later. Spend more money. Oh, crazy. Plus all their expenses.

Georges El Masri [00:31:00] So you think that the reason part of the reason that prices jumped so much since the beginning of COVID is because of all the money they pumped into the system. Do you think that’s fair?

Nick Karadza [00:31:11] Has it been since the start of COVID? And I don’t know if it’s exactly the sort of COVID the Bank of Canada has not had the status. It was like over 80 percent. I think it’s like eighty one and a half percent and it’s somewhere around there. So don’t quote me on it. You can look it up. But of the bonds being issued, they’ve pumped all this money into the economy when they’re buying the bonds. Other people don’t have to, so there’s less leverage in the system so the banks can go and lend more. Yeah. And then when the banks aren’t lending more right, it makes it easier for them. When they were taking things off the balance books, it makes them to lend more. And as the prices go up, when you push money into the system in our inflationary environment, what’s happened to the money? It’s gone into financial assets, not just Real Estate stocks. Everything. Yeah, everything’s it’s a Gong Show, everything. It’s this is financial repression at its best. I’m telling you like this is negative interest rates. Asset prices are going up while the value of cash is doing nothing. So savers are being hurt. They’re taking from savers and that’s how they’re paying off their debt. And that’s why they’re letting inflation run hot. It’s almost criminal.

Georges El Masri [00:32:10] Yeah, I see what you’re saying. So you weren’t you weren’t referring to, you know, like the CERB payments and all that money they were dishing out. You were talking more of them buying bonds and increasing

Nick Karadza [00:32:20] norm and the CERB payments because they’re still there’s monetary policy or financial policy, right? So a fiscal policy? Sorry. So there’s two and they went all in on both of that time. And that because we saw what because what we see the saving rates in Canada jumped. Saving rates were like the highest. Through COVID because they put all this money into the system. Why do you think people were buying boats and jet skis and everything else? You couldn’t you couldn’t getting this leisurely stuff because there’s all this extra money in the system. So it was it was both they were propping up, like maybe they thought they were doing the right thing. Maybe they didn’t. But you even if they thought they were doing the right thing at first, they quickly realized after a few months that like, Whoa, this is going to have, they should have. I mean, it’s very obvious it’s going to have unintended consequences, which we’re paying the price now. Yeah. So, yeah, so they’ve prop up the market like it’s very clearly Profits the market, not just Real Estate, all sorts of assets and

Georges El Masri [00:33:09] all sorts of and that’s in combination with just a shortage of housing in general.

Nick Karadza [00:33:14] A hundred percent, yeah. We’re strong believers in that. You know, we did. We pull numbers. It was four. It was about four or five years ago. We pulled these numbers. You saw the presentation when I was just sharing these numbers. I think it was 2018 when we pulled the numbers that we looked at. And we’re like at the current rate, when we took the 10 year trend of population growth of household formations versus the 10 year trend of housing completions in the GTA, we were it was clear to see we were two and a half years behind or we would be by 2021 if those numbers were going to be true. Those forecasts and it looked like and that was accurate. Like now in hindsight, it’s very easy just for us to say OK, if that was accurate. But even when it was happening, it was almost like you could look around like just a few years ago. I gave you, I live in Oakville now for, I guess, since I got married, and I should know how many years that is and my wife’s going to 14, maybe 15. I think last year was 15. Yeah, I should know that. I think last year was 15, so 15 and a half years somewhere around that. Yeah, I just remember I bought her a nice gift that she was happy about, and I think it was because it was 15. I felt like I had to do something nice. Yeah, so. So I think and for 15 years, when I’ve had to drive to Hamilton to one of the investment properties, you know, the amount of traffic that I saw, you know, in the different stages. At one point I just looked around, I’m like, Why do I have to leave now? Like before, if I left before four o’clock, it was, you know, I didn’t really hit much traffic. There was a point in time before COVID that if I wasn’t leaving by, like 2:45, I’d be sitting in traffic. So what’s going on here? And that’s what caused us to think and look into these numbers and get an understanding that that type of stuff. So, so yeah, I think the supply and demand is out of whack because like our immigration policies are bringing a lot of people in which this is an and. The thing I’m all for immigration, socially, our policies for immigration, we get some really good, I don’t want this to change them, actually. I think we have great immigration policies. I think the downside is the Liberal government’s trying to change them, and I think it’s going to make them worse. But I’m all the immigration fine. That’s how we’re growing as a as a as an economy. That’s fine. So we bring in the population growth for immigration, plus the lack of supply that we’ve had in this area and some kind of restrictions. We have it made it challenging and that’s why we’re seeing smaller units and smaller lots and higher prices. And it’s not going to be straight up forever. Nothing goes straight up, especially we have spike like we’ve had. That’s incredibly unhealthy. But I think long term, because I’m definitely like a long term investor, long term trend is still a lot of those foundational pieces are in place. And until those foundational pieces change, it’s hard to see that trend change. Now, if those foundational pieces change, then the trend can change.

Georges El Masri [00:35:54] So in your opinion, how do you think that recent policies financial the way they’ve handled the whole financial situation with all the money they’ve given now and all the bonds and whatever else? How do you think that’s going to impact the market over the next couple of years?

Nick Karadza [00:36:08] I think we’ve seen most of it. I think I think we’ve seen mostly like we’re seeing the impact of it now. So what’s happened to the price, the prices and how they’ve jumped? That’s the impact. So now it’s like, well, what’s next? Right. So they should be announcing some interest rates, which we’re hoping to talk. They’ve tried to talk down the market a number of times, just not working. So they’ll try to scare it now with some policy changes. And maybe those policy changes finally, you know, make prices move a little bit. Hopefully, prices come down a little bit. I know a lot, people don’t want me to say that, but that’s what creates a long, more long term, sustainable market. And then they continue on their kind of longer-term trajectory. I think what’s ultimately going to happen is that there’s the affordability is going to continue to be a problem and the government’s going to run. Someone is going to think it’s going to be a good political move to try to make housing more affordable for people. And that’s the great message. And to do that, they’re going to then extend immunizations again because I don’t think they can bring the asset prices down with what they need. Because if they have deflation in our economy right now, especially through housing, there’s going to be a lot bigger problems because now they’ve blown this bubble so big, they can’t actually let it falter. So I think that’s the challenge. We’re trying to kind of let the air out slowly. And I think to do that, they’re going to have to address affordability and that’s going to change amortization. I think they’ll extend it. So a lot of people don’t even know that we used to have mortgages that were amortized over 40 years in other countries. It’s quite normal to have 50 year mortgages or longer. Right. And I think we’re going to start seeing that because then the monthly payment drops and I did the math on the butter on a $750000 mortgage, and I think it goes up by about $180, $130000 or something. If you drop, if you accept the invitation for five years. Yeah, yeah. And that was at roughly a three percent interest rate or something. You know, I forget the details, but when you do that, Matthew, I guess this is a natural next step for them. And then and then, you know, they hope that the inflation takes hold and wage inflation picks up, and then it helps with affordability. But they can’t let. The government has so much debt that they can’t let deflation take hold or they’re in a world of hurt, so they can’t let that happen. That’s why they need this inflation. That’s why they haven’t raised interest rates yet. They’re like, Oh yeah, I think we’re going to have to like, What do you mean? You think you’re going to have to? They’re like, Well, inflation’s five percent. Yeah, you’re right. Unless you want to live someplace or you want to put fuel in your car or you want food, inflation is five percent. But any of those other three things it’s sure as heck isn’t five percent. Yeah, right? Sorry, this isn’t meant to be a rant. It’s just the way. If that’s the way we look at this stuff, because it’s about going that one step deeper. And we’re just so we’re trying to figure this out like everyone else is. And then we just use that kind of information to base our decisions of that. That’s how that’s how we invest. Yeah, you know, that’s how we base our decisions off of that. Yeah.

Georges El Masri [00:38:58] And just to clarify, like you still believe that everybody should be buying real estate and holding on to it as an asset to fight against this inflation and all this other stuff that’s going on?

Nick Karadza [00:39:09] Yeah. Like if yes, the short answer is yes. If I, you know, if I look at my bank account and there’s a chunk of capital sitting there, I just like, Why is it there? You know, just cash right now. It’s just it’s getting like it’s totally getting withered away. Just it seems crazy to me not to have it into. And even though the business is around Real Estate and we sell real estate and that’s how we derive income is from that stuff. I I’m not tied to real estate like I’m a really strange investor because there’s a lot of investors like, I just love Real Estate like the best thing ever. I love it. I’m like, I don’t, you know, but I if you could show me something that gives me the same opportunity that is a hedge against inflation. Look, it’s like a business in a box that’s a hedge against inflation because of the rents. Go up with inflation too, right? Right. Rents go up. The value of it go up, they build. The equity, you can leverage it like there’s so much value to it, if you show me how to do that, like I said before, with anything else, water bottles or anything else, I will gladly do the same thing. But I think it’s important to have hard assets. One hundred percent, I think it’s important to own assets and assets that can provide an income stream to me are even more valuable. So the low hanging fruit, if that is, you are, if that’s kind of the thesis that you live by, then the low hanging fruit is the Real Estate of one of the obvious ones.

Georges El Masri [00:40:24] Yeah, for sure. I know we’re kind of getting near the end here, but I just wanted to quickly touch on stress management and fitness. So obviously, like you’ve stayed in shape for many, many years. What is fitness done for you? And what are some, some ways that you’ve been able to manage your stress given like the business you run, the rentals you own, all that stuff?

Nick Karadza [00:40:45] The self-fitness is really important to me. So again, it goes back to priority management. It’s like, I’ll give you an example. Last week I had to get up early for something. I had to be somewhere by eight a.m. So my whole morning gets thrown off because usually I go to the gym first and I come home, take the kids to school because they’re young. I like to be able to do that and then go do what I need to do. So I had to be someplace where eight a.m. So instead, you know, sort of not going to the gym. I just woke up earlier and I was at the gym by, I guess, about 20 after five to do with whatever normal workouts I would do, then go home and shower. So it’s just become a priority for me. I started working out before I started getting to fitness and health because I wasn’t that healthy. When I was a kid, I was getting sick a lot and I didn’t. I didn’t, and I went to Catholic school, didn’t graduate high school initially because of that last year of high school. You have half spare, a half period spare and then half is religion or the Catholic school. And I went to spare and I said, Well, why am I going to stick? One’s religion is way more fun than religion, so I just never showed up to class, right? And I was half a quarter short of graduating, so I had to take a summer school to graduate. So they still lived across the stage. But then I graduated and stuff. I was like, Oh, that was stupid. I really messed that up. But I and summer school I had to go to. I took the easiest credit I could find because I just need half have the credit. There was a great tan equivalent class. It was a weightlifting class. One of the teachers had a bunch of weightlifting equipment, stuff like that, and he brought it to the school and we had a weightlifting class there. That’s one of the gym teachers really into that stuff. And that got me started to work out and I just became hooked ever since then. So that was I was what, probably 18, then 18 or 19, and I just got hooked because I found that my health was like just my whole life got better. Like, you know, and not just from a physical standpoint, from a mental standpoint, like it was just everything. So that’s why it’s so important to me. It’s even when I go on vacation, we go to Croatia for a month like we have a barbell and weights, and I have rings and I have equipment over there. You know that I use and I work out regularly and the people that live where close to us were in Croatia and they see me running a four degree heat, they’re like, This guy’s going to die. We got to help him. So but yeah, so that’s been, you know, I can’t speak highly enough of the benefits in my life that I think would translate would carry over to other people’s lives with that type of stuff. Like it’s been so valuable to me, but I get stressed and I, you know, it’s an ongoing challenge. You know, it’s just I find I get stressed the most when there’s too much going on initially and I’m not organized, so I’m on top of it. So any time I’m just like, This is a disaster, I need to pull back. I need to get on top of it, get organized it, whether it’s lists or putting things in the calendar, when things will be taken care of and getting some processes in place and then addressing it like that. That’s been just the number one thing. And I know it’s very simple, but it’s just like, you know, I always stay away from that. Like, I’m good at it and like, Oh, this is great. I’m very structured. Everything’s going well, no problems. And then I slowly kind of let that go, and then I get into a little bit of a period of chaos again, and then I’m like, Oh, geez, why did I get away from that? And I got to me got to kind of right the ship and get myself back on track, and then it kind of goes, goes well again. So anything you can do that you can systemize something, you know, Tom and I are really big on processes and systems, so that’s always been helpful for that type of stuff and we’re always trying to implement more of those things.

Georges El Masri [00:44:04] Cool. Yeah, I think that that’s a good answer to the question I find. I find that the listening is very helpful, like you’re saying, like just creating that list, getting organized, that’s a huge part of it. And obviously, fitness is a huge part of it too, because if you didn’t work out, I’m sure your stress levels would be higher.

Nick Karadza [00:44:19] Oh yeah, yeah, 100 percent. It’s weird. Like what? What I tell a lot of people that are Type-A personality. A lot of investors are Type-A personalities or they want more or there, you know, in personality testing would be considered, quote unquote achievers, you know, doesn’t say, but if you’re not an investor, you’re not. But just a lot of people are that more driven type a person if they’re investing, and a lot of us like the sense of accomplishment. So the listing tends to be good and I will write sometimes I’ll write everything on there, like I got to write, write an email like there’s three people have to follow up today. I would like to write those things down. And then because you know why, and I don’t know if you’re like this, but you know when you get to cross that thing off the list is the best. Yeah. And all you did was run a damn e-mail, so, you know, you got it. You got it. You got to be realistic with what you can do, sometimes give yourself those little wins. And I found one point one thing this this may or may not help and it may not apply to you is early on I found I was always trying to do too much in a day, so I was always letting myself down and it was always coming in behind the next day. And it’s something that I had to come to terms with, like, I just pick one or two main things that have to be done. Those are the priorities. And then I try to battle some other little stuff. I don’t try to do too much anymore. And that’s when, excuse me, I mean, there are days I try to, and it’s not a perfect thing, but it’s definitely helped when I’m like, No, it’s just all I need is if I can just get like if I just get one thing done every day, whatever the most important thing is done, that’s, you know, one to two hours of focused work of whatever it is. If I get that done, the rest of the day is a win, no matter what happens. Yeah, right. Well, I shouldn’t say no matter what happens, provided nothing to do, you know, to outside the box happens. But there is a way that doesn’t matter because you’ve got that most important thing done.

Georges El Masri [00:45:58] Yeah, because tons of things come up that aren’t really that important and you can get caught up and doing all those little things.

Nick Karadza [00:46:03] Well, with that personality type, like you mentioned with the list, it feels like you’re accomplishing something, but you’re not accomplishing anything of importance. And to get the goals and the results that you know we all want, you got to do the important stuff. The other stuff will take care of itself half the time.

Georges El Masri [00:46:20] Yeah, for sure. Awesome. I know you’ve got a lot going on today, so just to finish things off. How do people reach you? What services do you and Rockstar Real Estate provide?

Nick Karadza [00:46:30] Just, you know. For anything, if you’re looking for any information reports, a lot of we do a lot of like, you know, between the podcast and the reports and articles and different things. But a lot of real estate investing information locally around here in southern Ontario, and some stuff that goes beyond that is just go to rock star Inner Circle dot com and all that stuff’s there you can. You can find that there’s a bunch of bunch of stuff that we’re always putting out that way.

Georges El Masri [00:46:50] Cool. Nic, thanks a lot. Appreciate you doing this. I know you’re busy, guy.

Nick Karadza [00:46:53] I see you again, man. I appreciate it.

Georges El Masri [00:46:55] Yeah, same here. Thanks for listening to this episode. Your support is truly appreciated, and if you can share this with a friend or family member, that might benefit from the information. Remember, our goal is to motivate and inspire others to take action and to build wealth and to become well-off. Enjoy the rest of your day.

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