Ep591: Nick Karadza – Learn How to Identify and Solve Problems

Andrew Stotz 00:02
Hello, fellow risk takers and welcome to My Worst Investment Ever, stories of loss to keep you winning. In our community, we know that to win in investing, you must take risks but to win big, you've got to reduce it. Ladies and gentlemen, I'm on a mission to help 1 million people reduce risk in their lives and that mission has led me to create the Become a Better Investor Community. In the community, you get access to our global asset allocation strategies and stock portfolios, our investment research, weekly live sessions, and most importantly, the risk reduction lessons I've learned from more than 500 guests go to my worst investment ever.com right now to claim your exclusive podcast listener. Discount. Fellow risk takers, this is your worst podcast host Andrew Stotz from a Stotz Academy, and I'm here with featured guest, Nick Carozza. Nick, are you ready to join the mission?

Nick Karadza 00:56
Absolutely, let's do it.

Andrew Stotz 00:58
And I'm going to introduce you to the audience. Nick was buying rental properties around the Greater Toronto Area and couldn't find anyone to help him find the data he needed to make educated decisions about local investment properties. Together with his brother Tom, they quit their jobs in the software industry to start rock star real estate. What began as two brothers working out of a closet with zero clients has turned into a team of over 60 people working with 1000s of clients who have now purchased billions of dollars in income property all across Ontario. They've authored three books hosted growing podcast and run an educational membership program with over 1000 clients and 22 different instructor led classes. My god, that's amazing, Nick, the entire purpose of Rockstar real estate is to help Canadians build and buy assets that will help them live life on their own terms, Nick, tell us about the unique value that you bring to this wonderful world.

Nick Karadza 01:55
We're just we're just two guys, two guys that grew up and grew up in this area trying to figure things out. And I think what separates us is that we're just willing to share things, you know, the good, the good, bad or ugly. That's it's like, hey, look, we don't know everything we've we figured some things out as we go, we're still trying to figure some things out. And if we can give people a little bit of a shortcut in some way, by sharing the lessons that we've learned the hard way, so they can learn them the easy way. And then maybe skip those and maybe they can get into some more advanced lessons and then make those mistakes and share them with us. And that's it no different than what you do it. I just think that a bunch of people working together, we all learn faster, we all grow more, we all help each other, you know, level up a level.

Andrew Stotz 02:35
Tell us a bit about the podcast, what people should expect when they you know, listen in.

Nick Karadza 02:40
So our podcast called The your life or term show. So that is everything we believe in. Like we even with real estate investing, we believe it's a means to an end, right. It's about living life on your terms and having options and you know, the society we live in, you need financial options as well. So we do discuss some, you know, macro stuff we discuss, we discuss real estate trends here. But it's beyond that it's we do we bring on like a performance doctor that works with an NHL team to discuss like performance, nutrition and that type of thing. Well, we had a guest on the other day that's running a business, a decent sized business, buying and reselling sneakers in that industry and in that world, so or people that we bring in other investors that have how they real estate has helped them live life on their terms. So it's just a wide range of things just about just really about people that are out there, doing what they want to be doing the way they want to be doing it not harming anyone, but getting the results they need to live life on their terms. And it's really just kind of a range of topics.

Andrew Stotz 03:37
And talk about the Met membership program. I know, you know, I have some different groups and things like that, but nothing like this group that you've got with over 1000 clients and 22 different instructor led classes.

Nick Karadza 03:49
Yeah, well, look, we started with 2k. So the 12, the extra 20 came just from demand over time, because we've been at this for a while. So our team, you know, delivers a lot of them now we get other professionals but the the membership is really geared towards real estate investors, primarily Canadian real estate investors and even more so local, because we'll hold their hand on the whole process. And it's it's kind of the systems and to how to implement the system to get these repeatable results that you want. So we really are there to hold people through hold their hand through the whole process of investing in properties from beginning or end. You know, good, bad and ugly. It's not a lot of people, so many people in your world. I'm sure you've seen this, like so many people want the easy button. It's like, oh, what's the number one best investment that's gonna make me $2 million tomorrow, and I'm gonna Yeah, okay, I'm looking for that, too. So, so we're just like, hey, look, it's a process, but it works. If you follow a proper system and you're investing for the long term and you're looking at principles and fundamentals of things. There's real profit to be made, you know, and here's, here's our view on it and we try to help people and we're there to support them through the whole process.

Andrew Stotz 04:58
Curious, I have a podcast Interview with a friend of mine yesterday. And she is Canadian. She's living in Malaysia. And she's thinking about retiring. And one of her options is to move back to Canada, I think, I believe Vancouver. And what she said her biggest fear is that, you know, property prices are so high number one. So buying is, you know, a pretty big thing to go back. And I don't know what's happening with rental, and then she's afraid that you know, the cost of living is quite high. And yeah, compared to Malaysia and Thailand, you know, it probably is, but I'm just curious, like, what advice would you give someone like that, who hasn't looked at the property market for a long time in Canada? And now, I believe prices have been, you know, pumped up pretty high. Should they be renting? Should they be buying? Should they be looking for something small? Should they be what? How would you? What advice would you give her

Nick Karadza 05:54
be prepared for sticker shock from when you left, I guess. But it's tough, right? Like it's such a local game. So I'm very much more familiar with the markets around here. But I am somewhat familiar with the markets there. And what you know, at the Vancouver area, what's been happening? Overall, what we've seen in different some areas of Canada, primarily Vancouver, Toronto, and the surrounding areas are we've seen just not enough housing starts to keep up with the population growth that we've been seeing. So the supply and demand fundamentals are a little bit out of whack. Now, having said that, that was just like the kindling on the fire. And then the easy money, low interest rate policies, you know, inflation based policies we put in what that

Andrew Stotz 06:36
was a lien on the fire. Yeah, obviously, jet fuel, but

Nick Karadza 06:39
gasoline too, yeah, whatever, you know, I was trying to think of maybe it's dynamite, whatever we want to put on the fire, right. So it's kind of throwing everything out of whack. And we are, we are short term in an area now where this over exuberance has been coming down and settling back down, I think we probably have a little bit more, I probably had one more leg down before we kind of build off that kind of where we were. But, you know, I'm a big believer that if I like assets, and if I can get a good asset, that gives me options, so whether I live in it, or if I decide to move on someplace else, I can then rent that asset out and there's a there's a decent rental component that has helped me break even or better yet create cash flow, then I'm all for owning that asset for a period of time. So that's, that's the way I look at things. I'm like an old school, you know, give me hard assets if they split off cash flow even better. And that's kind of the way I looked, I looked to invest so so if you can find something like that, that gives you the options both ways, then to me personally, I would be investing, I would be interested in buying something.

Andrew Stotz 07:36
Okay, well, now it's time to share your worst investment ever. And since no one goes into their worst investment thinking it will be, tell us a bit about the circumstances leading up to it, then tell us your story.

Nick Karadza 07:48
So look, I had two options. I bought the one this is not the one but I did buy northern telecom. If you'll probably remember northern Telecom, the company, I did buy that stock and it went completely out that was early was my very first like stock buy. And it went to zero, like absolutely zero. So that's one but we won't use that one because there's not very many lessons there. So the one I'll take I'll talk about is a real estate one. And I went in. I was new and it was my first property that I bought, I had just taken one of those like real estate weekend bootcamp, things that have been all over a lot of different Canadian and American cities, they go and I was ready. I was young, and I was hungry. And I'm like, I'm gonna buy this property and I'm gonna fix it up and there's just like, so much money to be made here. Like, I can do this. And it's gonna you know, pretty straightforward buy fix, sell. Let's do this. I'm ready. And look, it was a lot more work than I had anticipated. It wasan hour. It was long, long days, I was working full time I was still living with my parents. I'd be waking up at 530 in the morning. We're taking my dad my dad was working drive, I had to drive our business. We're taking his pickup truck to the house the night before and loading up all the garbage from the night before I was about 2021. And no 21-year-old wants to get up at five in the morning to start doing this right. And I'm waking up loading up the garbage going to the local dump. I was like waiting for the gates to open so I could go into the pickup truck and take it back to my dad's house and let him take the pickup truck for his drywall business. I would go work I was in it at the time I would go work all day and then go back and start doing renovations again the night before and just burning the candle at both ends. I have to end up asking friends for help my father in his drywall business, his contacts and help and for help and that type of thing. At the end of the day, though, I did end up actually making profit from it. The profit ended up being $4,000 and for the amount of work and time that I put into it. I mean I was that was it and the days were like it workers were in hot demand. I got to work a little bit of overtime and make 4000 bucks, you know what I mean? So it was profitable, it was barely profitable, I would not do the amount of work again for the money. However, the lessons that I learned were, that's where the things changed for me. But from the financial perspective, the amount of work and the overall return on investment was just not it wasn't it was

Andrew Stotz 10:25
it was, yeah, if an outsider did the calculation of whether you made money on it, they would calculate your time at a market rate. And they probably would say, Okay, you're probably contributing your time. And, but we'd have to book it as a legitimate cost. And so then it would be under. So how would you? How would you describe? Yeah, how would you describe the lessons that you learn?

Nick Karadza 10:50
The lessons that I learned, changed my life, they and I don't mean that lightly. They legitimately did. And I think what it allowed me to understand is that there's way more to the world and way more going on than I understood. I had recently graduated school, I was went into a full time role, full time it role. And that's kind of what I was taught, like, you go to school, you get a good job, and you just move on, and you just kind of work your way up the corporate ladder. And this showed me that there was potential to this stuff. And there's just other things out there. And it just opened my mind to being like, Okay, I believe in this, this, this asset class, like, I just see this recent stuff, I can understand that there's something here. But maybe this like buying and selling, I just didn't get it. I was like, why am I doing all this work to sell it? And then, you know, maybe if the PDF is bigger, maybe I would have thought differently. But I was like, I don't get it. But if I can hold on to this, then there's got to be these other avenues. And that's what I started. I think maybe that's when I finally read Rich Dad, Poor Dad or something like a few of those books. There was the One Minute Millionaire Rich Dad, Poor Dad, The Millionaire Next Door, and I started getting a sense of this stuff. And I started understanding this thing about this self liquidating asset. And I'm like, What the heck is this. And then I started understanding, I was like, Oh, my God, I had one of those if I rent it out, and now I just sold it. So it, it just expanded my horizons. So there was the lessons. And then on top of the lessons, everything that I was scared about, and I was scared about doing, though a lot of it came true, but I handled it. And I got through it on the other side, and all my fears, I was able to look at it be like, it wasn't such a big deal, after all. So as I encountered the same situations later on, I was like, oh, okay, I got this promo, you know, whatever foundations kind of caving in or something, okay, I've dealt with that, no, probably can handle it. So myself as a person, I feel like I grew as a person, and I was able to handle bigger problems. And, you know, one of the things that I ended up saying out of that is, you know, one of my beliefs is, whoever handles the most crap, I use a different word as for letter, so that's what sh, whoever handles the most crap wins. Because I think that it, you know, if you're able to level if you stop worrying with the little stuff, and you're able to level yourself up to bigger problems, there's bigger opportunity for you as well. So I don't know, that's in a nutshell. I don't know if it's clear or not. But there's so there's so much to unpack there, but it and then that got me further down into the real estate world and investing in properties from a young age. It's, you know, I'm 44 now, and it's changed my life, like it legitimately has changed my life. Right?

Andrew Stotz 13:34
Yeah, I mean, I guess my biggest takeaway of that is for the listeners out there, if you if you can learn to identify problems and solve them. You've got a lot of opportunity in this world. And many people have a hard time identifying what the problem is, and they don't have the skills to solve the problem. Sometimes those skills are grit and sticking with it. Sometimes those skills are stepping back. Sometimes those skills are asking other people for advice or help with something. But if you got the ability, and I want you said to that met reminded me of something that I say, which is like, I remember I used to have had a young group of kids that I did scholarships with many years ago in Thailand, they help them get through high school, and then University, and one of them even through her master's degree. And what I told them when they were young, it's like, bring your problems to me. I can handle it. My back is strong. And I've been through so much that there's just no problem and then having passed, you know, the passing of my sister and my father and all those things and all the different things I've faced in life, it's like problems do not they do not intimidate me. They do not break me. I have the ability to push through them to look at them. And if you know we can and that's really what I get from your story is that you are you built the confidence that you can solve the problems in front of you. And that's why people want to follow you. That's why people want to listen to you. That's why people want to join you. And that's kind of my biggest takeaway.

Nick Karadza 15:13
Yeah, I think you've nailed it on the head. And it's something I try to share now with investors is that I truly believe now we're in real estate investing. So I mean, there's this opportunity exists elsewhere as well, but I'll use it in real estate investing. That, you know, becoming an even if you're one property, when you have that hands on investment experience. It's not just what the investing in it, it allows you to grow as a person and the skill set that you gain, I've never put it the way you said it. But you're actually right, that the skill set you gain from handling those identifying and handling those problems. It just it opens up doors for you. And it doesn't just open up doors in investing or something else, it opens up doors and careers and think like everyone wants to be around people and wants to grow their network with people that can identify and solve problems. Right. And it's the minority of generally, it's the minority of people. And when you are able to put yourself in that level, it just the horizons are automatically expanded.

Andrew Stotz 16:13
Yeah, I want to tell you a story about my best friend Dale who runs our coffee factory here in Thailand. And we had been running the factory, I don't know, it's probably 10 years at the time, maybe seven years, it had definitely had a lot of ups and downs. It was a tough start. We had the Asian financial crisis in 1987. And that was really painful. And Dale was in the factory, the factory was operating. And basically, he was on the phone in the upper part of the factory. And someone came rushing in his room to save fire. And basically, he went down and found our roasting machine on fire in the roasting room. And, you know, he just took control the situation. And first thing is he got all the staff outside of the factory, except for two people. And he got those two people and basically got one of them to get a hose that we had, you know, nearby and start hosing down the wall and some other places because he could see the fire potentially spread the other one, he said, Get up on the roof of this building and start pouring water down this chimney as fast as you possibly can. Meanwhile, he had like 27 screws that he had to unscrew in the burning heat with fire and smoke and all of this. And he just stayed focused. And he did all of that he opened it up, they sprayed it, they shut it down and we didn't lose our business. And I just think about that's a great example of, you know, there's the problem. Don't be a panic person. Be a person like Nick be a person like Dale that sees the problem and says, Alright, let's solve it.

Nick Karadza 17:42
Yeah, I'll look Dale one offs. Me. Okay, I might have been the first one running up the building. I'm not sure if I understand for sure. But yeah, that's incredible. Like, that's exactly what it is. I mean, that's what, you know, isn't it? Like, doesn't that allow us all if we're looking at a way to kind of give back, you know, so many people talking about helping others stuff like that, by being that person doesn't that then allow you to be the person who's able to give back like, like, when Dale doing that, think of it. So there was the business for you guys. 100%. But then there's also the jobs and the incomes and the families that are supported by those jobs and stuff. So like, it's, I feel like you can grow your impact if you if if you operate in that manner, and it's not perfect. And sometimes, you know, we all fight with things. We're no one's perfect. It's not like, Oh, I do this all the time. Like we all kind of, like, get off the rails a little bit have to pull ourselves back. And you know, it's constant kind of battle with that type of stuff, but I just feel like it. Yeah, I just feel there's more to it than just, you know, the, the financial means the investment means and that type of thing. I think that's what I'm, that's what I'm trying to share about it, you know,

Andrew Stotz 18:49
Dale and I oftentimes think about how one of the things it's great about getting older, in businesses, you really are accumulating experience under fire. And you know, you are and that experience is so valuable and it means you're not shaken by a lot of situations. And sometimes we have a little saying that we say which is when we see someone you know really shaken, you know, under something that's pretty minor, we sometimes say crushed by the weight of a feather Yeah, so build those experiences and you know, build that strength and you're valuable not only to yourself to your family but as you can see you know to all your clients and the people around you that are inspired by that so let me ask you based on what you learned from this story and what you continue to learn what what action would you recommend our listeners take to avoid suffering the same fate

Nick Karadza 19:45
suffering the same fate from my investment?

Andrew Stotz 19:47
Yeah, from the mistake, let's say your worst investment.

Nick Karadza 19:50
Yeah. Ah, I think I would look. I mean, it was it was early in my investing career. My first investment I would look for more for more information first, I was kind of the LEAP first and it got got me in there. And that's good. And there's something to be said for that as well. However, it would have been great, it would have been, I would have been more successful. Had I had, you know, just a little bit more insights a little bit more data a little bit more of an understanding before I got in. And I say it hesitantly because it's a bit of a fine line, because there is the analysis, paralysis side of things. So you can just look at information things forever, and not actually end up doing anything. And, you know, so there's, there's, there's good or bad to both. But looking back, I'd be like if I studied the market had a greater understanding of certain segments of the market and really understood that renovations that I was getting into, and not just kind of looking at myself, and like now you know it, you've kind of been through a little bit of this, you understand it? And being a little a little bit naive in my youth. I would have, it would have turned out even better, I think, because there would have been actually some, some real some real profit there as well as lessons instead of just the lessons, but I did get the most I look at it that I got the most valuable part, which was the lessons, right. So but it would have been nice to have a little bit more money coming because of it.

Andrew Stotz 21:08
As our parents used to say, Look before you leap.

Nick Karadza 21:11
Yeah, exactly. Exactly. Looking maybe double check. Yeah, exactly.

Andrew Stotz 21:16
So what's the resource of yours or any others that you'd recommend for our listeners?

Nick Karadza 21:21
Oh, man, if they want. If they want anything that we're up to, they can just go to our websites, Rockstar, inner circle.com, we have a we have a few free books there. So they can just click on Books. We put together a few different books primarily around Canadian real estate stuff. Some of the some of the lessons kind of are more wide ranging and international really, but but the books, the books to me, I'm a book guy, they're the most valuable thing. But up there's podcasts and videos and stuff like that, too. But it's nice to get a free book if you can.

Andrew Stotz 21:50
Yep, great resource. And we'll have a link to that in the show notes. Last question. What's your number one goal for the next 12 months?

Nick Karadza 21:58
Oh, man, it's you know, it's funny you say this. So there's a bit of a story to this. So for a while here, we've been looking for someone we're going to we, my brother and I. So we're the two in our businesses together some of our investing and also the main businesses. And we've been the bottleneck of some stuff. And we've recently added a couple team members who've been excellent. And they've taken they've handled a lot more stuff and a freed up off. So they've taken a little bit to get up and running. And they've been handling some things and we're less at the bottleneck, which means that the good news about that is that I now need to go and find bigger problems to handle. So the goal for the next 12 months is exactly what we've been speaking about. Now that I've you know, managed to get take a lot of operational little stuff off day to day things off my plate, I have some more free time, which I'm excited about. Because it's to find bigger problems, to turn into opportunities and see where see where that takes us and as far as growth.

Andrew Stotz 22:53
exciting, exciting. Well, listeners, there you have it another story of laws to keep you winning. If you haven't yet joined the become a better investor community just go to My Worst Investment Ever.com right now, to claim your spot. As we conclude, Nick, I want to thank you again, for joining our mission. And on behalf of A. Stotz Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?

Nick Karadza 23:22
I appreciate it. Andrew I think actually what you're doing great and if anyone's listening, there's just there's opportunity out there never think there's not just go grab it.

Andrew Stotz 23:30
Go grab it. Ladies and gentlemen. That's a wrap on another great story to help us create, grow and protect our wealth fellow risk takers. Let's celebrate that today. We added one more person Nick to our mission to help 1 million people reduce risk in their lives. This is your worst podcast host Andrew Stotz saying. I'll see you on the upside.