Rock Star Real Estate with Guest Nick Karadza - Stephen Simpson and Nick Karadza - Ep.3

In this episode Stephen is welcomes Nick Karadza, the co-founder of Rock Star Real Estate.

Nick and his brother Tom left their corporate jobs and created Rock Star to build a community of like minded, education hungry investors, in the GTA and Niagara Region. A brokerage made by investors for investors. Rock Star Brokerage has gained local and national media attention and earned the title of one of "Canada Profit-500 Fastest Growing Businesses" 2 years in a row. 

For more info check out: rockstarinnercircle.com

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Youtube: www.youtube.com/@FocusCapitalPodcastwithStephen

Web: focuscapital.ca

Transcript

0:09

On this episode of the Focus Capital Podcast, I sit down and interview Nick Carrazza. Nick is one of the founders of Rockstar Real Estate, which is a real estate brokerage based here in the GTA focused on helping real estate investors get into the real estate market and grow their portfolio. Nick and I talk about a few different things. One, his background, getting into the business current state of affairs here in Canada and looking ahead for what's coming up in the future. And if you're interested in finding out more about what we do be sure to check out focuscapital. ca. You can get more information on this episode and all of the other things that we've got going on. And with that, I hope you enjoy the show.

Stephen: 0:48

All right, Nick. Welcome to the podcast.

Nick: 0:50

Thanks, Stephen. I appreciate you having me..

Stephen: 0:52

So I wanted to talk to you today about a few different things. You know, there's, there's obviously some different things going on in the real estate market, some things you know, from the bank of Canada, and we're all talking about interest rates these days and immigration and things like that. And you know, but I thought it'd be interesting just to, to kind of set the stage a little bit. And before we dive into to the real estate and maybe some statistics and, and plans for the future, just to get a little bit of a backstory from you about how you started a rockstar real estate and some of the influences maybe you had growing up. I'm always curious to see you know, what sort of the, the early influences were and sort of the triggers were in someone's development and what sort of pushed them into, you know, Taking a more independent path, maybe an entrepreneurial journey or getting into real estate investing and things like that. So I'd, I'd love it if you could share a little bit about you know, some of those early influences and maybe what sort of triggered you to, to start Rockstar Real Estate and move into that space.

Nick: 1:49

Yeah, I don't think I've ever been asked about the influences before, so it's kind of, it's interesting. You know, I think one of the influences was really, the government job that I had, you know, I left school when I, when I finished school, I was kind of being recruited out there by Procter and Gamble, you know, which seemed like a pretty, you know, it's like, it's a big, big company. It was like a cool place to go work, right? This Procter and Gamble, you get this type of job out there, but it was, it was into the city and the traffic getting in and out. I was living at the west side of Mississauga at the time, east side of Mississauga at the time. And You know, I wasn't too interested in that. So went and one of my co op placements was with the region of Peel up in Brampton. So I went there and you know, I IT department there and I liked it and there were some good people there, but I got so frustrated because I couldn't do anything. Like the process to get anything done was five signatures, three meetings and like two weeks, like it just. Like it just, I left there pissed off every day. I remember talking to my girlfriend at the time who was a wife now, and I'd be like, I'm wasting my life away at this place. Like I've just pissed, like I can't do anything. So I wanted to be rewarded for the effort that I put into something. That was, that was where I, you know, what I wanted. And it reminded me of working on the construction site with my father. My father had a drywall business. And there was two types of people. I was getting paid hourly. I was a laborer. I was scraping floors. Like after the tapers were done, I get the metal scraper and scrape the floors and sweep it all. I was doing insulation and, and you know, wearing a mask in the heat at that time. That's before masks were like a cool thing now that some people still like them. You know, that's before that time. And I was like, I don't want this stupid mask on. That's So, but then there's these other guys working and they were doing the framing and they were doing the drywall and they, you know, they left all the drywall pieces around. I'm like, why am I picking up this guy's garbage? And they're like, well, that guy gets, he gets paid on piecework. So the more work he does, he gets paid more. And I'm like, huh, that seems interesting to me. So when I was at this, you know, region of Peel job I was like, I was very handcuffed and it was good, but I was like, I wanted to be rewarded for the effort I put in. And that's one of the things that led me to looking into real estate investing because I was like, I feel like if I can make some progress here or do some things, I get rewarded for it in a different way. So I think that was kind of like, you know, the, the, the big, Thought that I had at that time. Remember I was like 21 years old at that time I didn't have very many deep thoughts, you know, so that was deep to me Figuring that out and then the way we started Rockstar was Basically, over time as we started investing, so that was my brother and I, so we each started investing ourselves independently and then we kind of joined forces and started doing some investing ourselves. And we just looked around and we said, holy crap, like we, we, we learned all this real estate stuff. We've read books. We've gone to courses, all this type of thing. There's no one actually. It's crazy. It's crazy. On the streets, helping people, like it's very easy to talk about real estate from like on a podcast or, you know, in front of a board or in a book, but to go actually do it on the streets, like you're doing as well with your investing stuff, it's a lot different when you're actually doing the damn thing versus talking about it. And there was no one on the streets helping people. So we said, why don't we be the people that links the information from the books, courses, reports, you know, internet, whatever people are reading. And helps them, handholds them implementing on the streets. There's this gap in the market that no one seems to have filled there. And that, that was it really. We're just like, we, you know, we're investors. We think we can help other people. And then we kind of went from there.

Stephen: 5:21

Wow. Yeah. And that's, you know, I think a lot of people go through that sort of experience when they see that there are other ways other than just trading your time for money, right? And so if you have an experience where maybe you do a real estate deal, or maybe you, I don't know, invest in something, invest in stocks, or do some research or start a little side business, and you realize that you can, you know, actually have a lot of leverage just by doing the right things and preparing yourself and, you know, and, and that's really powerful. So that's, that's really cool that you kind of realized that early on, or you had that experience, which kind of changed your sort of path that you were taking.

Nick: 6:00

Yeah, it was the construction site was insightful. Let me tell you, I left the construction site one day. I couldn't take it anymore. I was like, Tom, you know, my brother, I know, you know, but for anyone else listening, I'm like, Tom, I can't take this anymore. Like, I'm leaving. And he was like, What do you mean you're leaving? Like, like, you know, daddy's gonna be here soon. And if you're not here, like, it's gonna be a problem. Like, I know, I can't take it. I'm going to go home and find a job. Before he gets home. So he'll be less mad at me for taking off. So I went home and I started applying at like a moving company. They're like movers. I'm like, I'm a young guy. I can pick up stuff. I'm like, I can get a job as a mover. No problem. So by the time he get back, I was trying to take a little bit of froth off the anger. My dad's like an old school, Eastern European guy. So it didn't really work too well, but but anyways, there's a life lesson there that was worthwhile. And, and I'm going to, I'm going to, I should share that with him, that me walking off the job that day was actually what got me to this position today. See if he agrees.

Stephen: 6:54

Well, I love the fact that you said you had to have a job or some kind of a plan by the time you got home. Right. It was like, yeah. Okay. The option is not to do nothing. It's actually do something different, but I better figure it out

Nick: 7:05

Yeah. I got like five hours. So you gotta figure this out.

Stephen: 7:10

Yeah. So that's cool. So So I guess at that point you sort of decided like, okay, listen, I need to take a different path. You know, this, you were just sort of fed up. And talk a bit about that process of actually getting, you know, Rockstar real estate off the ground. Like, was it sort of, Envisioned like, okay, we're going to maybe start this as a, as a side thing. We'll see where it goes or where you guys, you know, you and Tom your brother's sort of like fully committed day one and maybe talk a little bit about that and just sort of how that rolled out.

Nick: 7:42

Yeah, I think it was at a period in time where both of us were a little bit frustrated. I should say a little bit. We were both frustrated or fed up with what we were doing. You know, Tom was he was a software sales manager at a company that was, you know, is now, you know pretty big company. I believe the fortune 500. I don't know, but they were about to go public. So it was during a busy time there and it was just kind of there were some things going on there internally that he wasn't maybe a huge fan of. So he's getting pretty frustrated that way. I was running a company that my, my, my my friend of mine started. And it was very reactive. It was hard in that type of role to be proactive with what I was doing. And that was frustrating to me because it was always like something external factors happened and then we have to scramble. And I didn't like that aspect of, of that company. So, so there was frustration both ways. So when this idea kind of came up, we thought it, you know, it made sense. Now, having said that without. You know, the timing had to line up without certain kind of life circumstances happening. We probably would have never gotten off the ground, but there was no real grand vision. It was like, we just need to start. And we just literally started. We had some marketing material. We started running some ads and then we, we sent out the marketing material to the people that responded to the ads. You know, this was like. I mean, it seems crazy to say this now because, you know, it wasn't that long ago, but it was at a time where, when the internet, yes, it existed, but it wasn't like everything was done online. Right? So we were running newspaper ads and then we were getting people to call the 1 800 number, leave their, listen to our recorded message. They would leave their information. Then we would mail them stuff. We still mail stuff out. We like that as a strategy for a marketing strategy, but, but, It's like that was like the only option like for us to put up a, we didn't have a website up for like until a year later, but we just need to start with something. And then we started meeting with some investors one on one and we're like, yeah, here's what we're doing. Here's what we've done. Here's kind of some investing things that we've done. Here's kind of how it worked out. Here's our beliefs behind it. And why we think it makes a difference. And that's, I think, maybe something that really at that time might have separated us apart that we didn't understand that separated us apart at that time, and then we just started working with people. We just started holding their hands, saying, okay, like, like the commitment was, it wasn't like, Hey, I'm going to help you go buy a property. It was like, look, we're going to go find an investment and I'm going to be here to support you through this investment for the lifetime of the property. And I think that's what separated us apart because no one else was willing to do that in the real estate world. People were like, Hey, you know, I mean, everyone was, everyone told us we were crazy to work with investors. First of all, they're like, that's a waste of time. They want to put a hundred offers in low ball offers. Doesn't make sense. You have to list to last in the real estate world. And we're like, that's stupid. Screw all that stuff. I don't even like real estate. I like the investing side of it. I wouldn't be a terrible person in real estate because if someone complains about the color of the carpet or the color of the wall, I'd be like, I don't know, paint it. Like, what's the matter? Why are you even talking about this? You know, I'd be like the worst person. But but we just understood the numbers and we just kind of made it work with people. And these were people that, you know, You know, wanted to kind of start owning some assets in their lives. So literally just, it was just a trickle. It was just a slow trickle. And then it started, you know, as we got traction, we're like, Holy crap, maybe there's something to this. And then eventually we got I, I went into the business full time. First, Tom had a higher salary, so we wanted his T4 to allow us to keep. And then, you know, that T4 with the banks and stuff, the banks love their T4, right? So he was funding the business while I was working in the business. And eventually we got to a point as we kind of that trickle kind of grew, grew to like a, you know, a slow flow and then a little bit of a stream. And We're like, we have enough business that you need to leave your job. So he left his job too. And our accountant at the time looked at him, I was there with, I mean, he's like, are you sure you want to do this? Like, if you talk to your wife, cause he had a very good income. He's like, you're going to leave this to do this. So like. The accountant kind of thought he was crazy. You know, but it's, it's worked out, but, but there was some challenges. Tom had young baby at home. I didn't have kids yet, but I was newly married trying to figure out how to afford a house and stuff like that. So, but but yeah, it was just a little trickle effect of us just trying to help a few investors that slowly kind of built into a little bit more and kind of grew from there. So,

Stephen: 12:05

you know, once you connect with people who understand and kind of, kind of vibe with you on that same level, like, okay, I like what these guys are doing and, you know, maybe it wasn't apparent at that point, but you know, you guys were starting to build a brand and starting to build a culture at that point, even though it might've been very, very raw, but I think once people can kind of see, oh yeah, these guys are, are, I can connect with them. I can understand what they're doing because they're, they're, they're Just trying maybe to get out of, you know, we talked about the matrix at some of your events to get out of that matrix a little bit and start doing things for themselves. So I think that really resonates with a lot of people. So I guess my next question would be about, you know, you guys talk a lot about you know, leverage and the power of owning assets and really just doing things to, you know, to, to sort of build that. Get back your time. And one of the things that I think, you know, resonated when you and I first met is, is like you just said, Nick, it's not so much about the real estate, but it's about creating that lifestyle that you want, right? It's about, you know, using these different vehicles, these different assets, investments, whatever you want to call them to really To really build the life that you want, right. And, and to get by that time. And if you want to travel to do that, if you want to teach, if you want to do that, you want to focus on your hobbies or your family or whatever. So can you talk a bit about that sort of culture? Cause I know you've got a good brand now, right? It's, it's, you know, I don't know, 20 plus years, maybe in the making to, to kind of get to this point, but maybe talk about those early days. And, and, you know, did you kind of have that vision for this kind of your life, your terms, culture, or how did that sort of build up from there?

Nick: 13:47

I appreciate you saying that. I mean, we don't look at ourselves as like that we have this brand in any way, shape or form, but we just kind of try to do stuff. But, you know, other people have mentioned that. So I guess over time we've been, maybe we've just, we've, we've been around a long enough. We've survived enough market cycles that people, you know, that they're like, Oh, okay, these guys are still around. Maybe They're

Stephen: 14:05

still there, right?

Nick: 14:06

Look, we started when we started this, we, it was called, we were called income for life for a, for a period of time. And then we, we went out on our, on our own to start our own brokerage because the brokerage didn't like what we were doing. And, you know, we're like, look, we're just going to start our own thing. When we were doing that, we, we tossed around different ideas. So we both made a, you know, a list of 20 names or whatever. We just kind of took some time. We both made individual lists and we compared the names and we went through them. And I'm pretty sure it was on Tom's list. I don't want to give him credit, but I was pretty sure it was on Tom's list. And it was, it was one of the names was rockstar real estate. I was like, oh man, I like that. But then we left. Like, could you imagine we actually called the company rockstar? Like, you know, this is, these are in the days where there weren't a bunch of these real estate companies around because it was just like, it was, you know, Remax, Royal LePage, Century, you know, but we didn't do. We had no ambition to do what they were doing and we didn't view ourselves in the same light at all. Like that wasn't, that was never the goal is to, you know, so it's a very different thing. So we're like, well, we don't care about that. So. So, but and then one day Tom called me and I was driving along the QEW and I remember he's like, Nick, I got it. He goes, you don't invest in real estate to be a landlord. You want to live like the life that you want. He goes, that's your rockstar life. So it doesn't matter if it's partying in Vegas or if it's at the cottage on in the hammock reading a book, whatever it is. That's your life on your terms and that's rockstar real estate. And I was like, holy shit, you're like, that's actually pretty smart. Again, don't like to give them credit. But God gave him credit for that one. It, it

Stephen: 15:40

younger brother, given the older brother credit. Yeah, that, yeah,

Nick: 15:44

I'm stronger than him officially. So just, you know, that not many younger brothers can say that about their little brother. So I just want to, but but no, it was good. Like, and, and it really resonated because that's what, that's what it was like real estate to us is a means to an end. And it's not about like, if you want, you know, the investors we work with, if they want one property and that's going to impact their life. Perfect. That's it. Don't get a second one. Just do everything. Then, but if they want five properties because they want, that's going to suit their lifestyle and give them maybe that more flexibility or freedom or whatever it is, then do that. But, but in the real estate world, like the residential side that we played so much of this, some different real estate groups, like it always gets caught up in, Oh, how many doors do you have? Oh, I'm going to, you know, I got 50. Oh, I got 120 doors. And I'm like, What the heck? Like it's so incestuous. Like I, I, I, I gotta be honest. I don't like using the word, I won't use hate. I dislike that very much. I think it doesn't make any sense. So we always looked at real estate. It's a means to an end. Can it serve a purpose in your life? And for some people it does, and it serves, some people serves an enormous purpose and lets a lot of them quit their job and do all sorts of stuff. Some people are like, no, no, I don't want that. It's just sort of a small purpose. And some people it's not a fit at all. And, and each one of those decisions is right for each person, you know, but that's where the whole rockstar thing came from. And, and, and, and we really believed that. You know, it's why we, we left our jobs is we wanted more control over our time, our finances and that type of thing. And we realized that was the ultimately the goal that we were helping people towards that that was it. It wasn't about the real estate properties necessarily. We just looked at that as a vehicle to get to where we wanted or to help other people get where they wanted as well.

Stephen: 17:30

Yeah, no. And as I said, I, I think that's what deep down resonates with a lot of people. And that's why I think, you know, I, I still go to your events and I still see people there that have been members for some of these people, 10 plus years. Right. And they still stick with you. And maybe they even haven't brought a property in a while, but they like the You know, the brand, they like the other people that you attract to your events and things like that. So I think there's something there that really resonates with people. And again, at the end of the day, it's, it's not really about the real estate. It's, it's about that lifestyle. So, so that's really cool. And, and, you know, I, I guess from, from an early stage, You know, if you know that and you're starting to build around it, then you kind of go from there and, and, you know, some of the cool things that you guys do that I see your events is, you know, you have health and wellness speakers, you talk about personal development, you obviously talk about real estate and stats and things like that, but you're really sort of you know, catering to some of those other things. So that's you know, that's really

Nick: 18:33

Yeah. No, I appreciate you saying that. And it's just, you know, it's partly out of, I guess there's a couple of things, partly out of boredom. Because there's only so much, well, I mean, the reality is there's only so much real estate stuff you can talk about, right? Like nothing's really changed. It's not rocket science. There's not these monstrous new developments. I know every, in every hot real estate market, you know, there's some people that come out of the woodworks and they're like, Oh, I got the next best strategy of how to become a millionaire in real estate in 24 hours. None of your own money or effort or whatever the promise is, right? But the reality is nothing's changed in the real estate game for a long time. Outside of some rules around taxes or financing, it's the same. You get an asset and you figure out a way for that asset to generate income for you or increase the value of that asset or pay down that asset over time and then maybe leverage that again. Like, I mean, it's, it's like simple stuff. Like I know you get this, right? So, so we

Stephen: 19:26

And it's part of the beauty of it too.

Nick: 19:28

Yeah, like it's try tested and true. so so we're like, but, but you can only go through that so much. So, so in our world, if we have more experienced investors like yourself and then some newer people, we, we, you know, so for a business standpoint, we have to try to cater to both. Right. So that's why we have to try to interject new things as well. And then the. You know, we've gone down different rabbit holes in our lives for different things that we feel have been beneficial to us or served us and sometimes it's other people have introduced things to us and we feel it can help other people. So we just think, you know, so a lot of it's driven by demand for people to come to those things, but it's just to give, yeah, just, I guess, a different perspective and just make it about more. I guess our whole belief is that it really is about more.

Stephen: 20:14

No, for sure. For sure. Okay. So maybe let's, let's shift gears a little bit and talk about kind of the current state of affairs right now. So, you know, as we're recording this, it's February, 2024 we're, you know, almost Two years into this I guess this latest cycle of higher interest rates and, you know, kind of semi recessionary environment that we're in. And you know, back of Canada trying to tamp down inflation and things like that. And it's really it's really done a number on, you know, various segments of the real estate market. And so. I'd like to get your, your thoughts on sort of where you see things headed right now as, as we're kind of venturing into 2024, how has that maybe affected your guys business? I mean, obviously, you know, when, when things were booming you know, three, four years ago, prices were going up so much. It's, you know, I think it was probably a much you know, I don't want to say easier sell for you guys, but obviously there was probably a lot more people just attracted to investing in real estate and, and, and coming and joining your you know, your courses and your events and things like that. So maybe just give a little bit of perspective on, on sort of, you know, where we are right now and, and the, the, the current market and the current state of affairs.

Nick: 21:25

Yeah, well, I mean, when rates were lower, just people that could qualify and never, never mind afford it, you know, just, just to be able to qualify there, not even with, with any funds available. But yeah, I mean, you know, it's interesting, like the, the, the investment group and the events and stuff, though, those really haven't, changed too much. Are there some headwinds for new investors maybe coming in? We probably see that a little bit. The investment, I would say the groups kind of stayed about the same size. I mean, people come and gone, but the numbers stayed about the same size, but hasn't really gone down any. So we haven't seen the growth, but, but, but I think more people, if they're into that world, they're looking for information right now because they're trying to figure out what the heck's going on because In a market like we've been through as things are shifting, the information can be an advantage to you. Whereas before it was like, I don't know, buy any property in any area and you know, with anything you're going to make in six months, sell it and, you know, pocket 50 to 150 grand. Like it's, you know, so, so when, when that finally disappeared, which by the way, is like, terrible in my opinion for the real estate market for the economy like there's just all sorts of things wrong with that it's like even if someone that owns properties and someone that works with investors it's just it's not sustainable it's not good it's it's just bad all around so, so on that side of things, you know, there's still a lot of people just kind of looking for to have an understanding and looking for help from maybe people that are investing or doing different things and trying to associate with that because there's really been, you know, like, like all of us, there's, there's value to that, whether it's exactly like I don't play in your market, right? So I'm more of the residential side, but seeing what you're seeing, and I always ask you questions, well, Hey, what are you seeing? What are your rates? What, you know, what kind of businesses are doing it? Understanding that helps me as a real estate investor, because it gives me insight into another perspective. And I can see, understand the economy, you know, just like understanding the real estate side, the residential side of things for you is just like, okay, that's interesting. Like I should keep that in mind. I need to know what's going on there when I'm looking at industrial as well, because they're kind of linked, right? So, so there's, there's all those kinds of benefits. I think the biggest challenges we're seeing now is just like everyone knows, it's just affordability in general. It's just a real challenge. challenge for people, whether it's down payments or making the numbers work on an investment with rates where they are. A lot of investors over the last couple of years as rates have increased, some investors we've seen reshuffle portfolios. So if they have, you know, what caught dozen properties or whatever the number may be, they've taken one or two that They don't like the numbers on anymore because interest rates have gone up and they've kind of cashed out of some of those. Some of those people, to be fair, they had some properties for a period of time and they've refinanced it once or twice, and then now they're like, well, that one's in a big negative cash flow situation. I'm like, yeah, but you kind of also, you've taken$500,000 of profit out so you gotta, you gotta offset that somehow, right? But so we have seen people kind of reshuffle things a little bit. Other people, what they've done is they've changed strategies or added additional income streams. And that's been the beauty of some, of, of being able to have, you know, more of the leaning more towards single family stuff, which we've always liked more in the residential world versus something like a condo. There's nothing wrong with the condo if that's your thing for investing, but it just gives you more options or the condo you're kind of limited. So we've had people turn it into Maybe tenants left, they turned it into a rent to own to try to get like a higher monthly income. But the more common strategies are starting to, you know, divide it into more units. So whether it's dividing it into like a, you know, two or three units where they can, they can then rent out and change the income numbers. If you're looking at someplace outside the city, you know, the whole house might rent for 20, 000. It's 3, 2, 400 maybe like a three bedroom bungalow. But if they break it up into two units, you can probably get almost that for the it might be 2, 500. You get like 21, 22 for the upstairs and the basement you're getting like 15 sorry, like, well, like 18 or so. So you're over 4, 000. So that changes the numbers that way. Some people then will take that a step further and rent to students. And I mean, rent properly to students, give them each a room, give them, not put like five mattresses on the ground and rent out mattresses and make them all sleep in one room altogether. Like none of that.

Stephen: 25:43

Proper sweets.

Nick: 25:43

Yeah. yeah, yeah. So we've seen people just kind of change strategy to kind of increase income a little bit. So, you know, it's, it's almost like people have to be back to being investors versus before where it was just like, Buy anything, you know, so we're kind of back to like hey, yeah to invest you kind of got a look at it You got to find them not every profits gonna work You got to find the right one You got to run the numbers and you got to see you got to kind of make things make things work, right?

Stephen: 26:08

Yeah. It's probably I'm just thinking it's probably more reminiscent of when you guys first started because that was probably what early 2000s you got going mid mid 2000s

Nick: 26:16

yeah, but yeah mid mid 2000 2006 2004 I forget I think 2006

Stephen: 26:22

So you, you didn't, I guess the point, the point I'm trying to make is you didn't have the wild, you know, appreciation every year, so you had to buy, right, you had to really focus on location, you had to focus on demographics and transportation, infrastructure, all these types of things that would make a location good. And a certain property kind of do well in cashflow and that sort of thing. So I think, you know, it's, it's kind of back to those old days, maybe if I can call it that.

Nick: 26:46

100 percent in some ways, in a lot of ways that way, and at that time we were telling people to fill a property like, Hey, like it's, it's, you know, we were telling people six to eight weeks, it would normally take maybe four to six, really, if they kind of followed, you know, actually did stuff. But then we got to this point where not only property sales, like a pre private properties were selling it. But, but rentals and rentals still know the rental markets cooled off a little bit, but it's had like two to three years of just like being completely overheated because of the demand we've seen. So, so we see investors now where their property doesn't rent in one week and they're like, So, you know, it's been a week, it's not rented yet. I'm like, yeah, that's, you, you, you, you haven't been exposed to normal market conditions. Like it, it should take longer than that. You know, same with the rent increases that we've had. Like those are nice for all the investors, but completely not sustainable. We can't have rent increases of, you know, 15 percent every, every year. It just doesn't work like that.

Stephen: 27:41

Yeah, and it's funny, I actually sold the property about a year and a half ago, and I remember the realtor commenting, like, Oh wow, we've got to have an open house, and, you know, we've got to, you know, have a lot of showings here, and I thought, Yeah, that's kind of what you have to do when you sell a house and normal times, you know, I think during the you know, the craziness of the market in 2020, 2021, it was just sort of like, you know, listed on Monday and, you know, Friday night, you had your offer night and away you go. Right. But, you know, that's, that's not a normal market,

Nick: 28:11

no, not not at all. So, and I don't know. I think we're messing up the market dynamics so much. I don't know. I think we're going to get back to that normal market in a lot of segments of the market, specifically the single family stuff. Like we are so, in my opinion, we're so underbuilt on single family homes and, and we're not building anymore. There's none in the pipeline that the building permit numbers have come way down. The number, the ones that are construction have come way down, like this is a longterm trend that they've come down. So we're growing our population and we're building housing units. We're not building single family. So. You know, when rates, you know, when or if rates go down, they You know, when the demand is still there for those, you know, I don't know what we're, you know, I just don't know when we're going to see that type of normal market again. This isn't coming from a guy that's like, it's real estate. It only goes out, like, I don't care about all that stuff. I just like, I just think, I, I think what we've done is, is a really crappy job at structuring things for our population growth. And there's just been no communication. And I think it's going to create some problems in segments of the real estate market.

Stephen: 29:22

Yeah, maybe talk a little bit about that, Nick, because obviously, you know, we're, we're seeing the headlines here in Canada, you know, immigration I think peaked at about a million people in 2023 and a big chunk of that were the non permanent residents, we had international students coming in and, and various sort of, you know, a breakdown of, of that, but, you know, these are, these are big numbers and, and I think, you know, Even the most You know, basic understanding of, of economics and, and, you know, supply and demand would lead you to believe like, okay, well, we brought in a million people last year and even more the year before that. And where, where's everyone going to live? Right. And so how, how is the economy and how's the market here responding to that? And unfortunately it's because of the. Interest rate environment and, and inflation and different things, you know, a lot of developers aren't building, you know, as much as they could right now. So maybe touch upon that and just what you guys are seeing and how does that pose challenges to people who are, who are in the market investing and also just managing properties?

Nick: 30:26

Yeah, I mean, look, the government screwed things up. They massively screwed things up. Like they're, you know, like we, we got to be honest and direct about it. They, the federal, the federal government makes targets for immigration and then the provincial governments will plan around those types of targets. So if they've made these targets say, okay, we're going to bring in this number, but then they exceed them by multiples, The provinces can't plan accordingly. I'm not, I'm not saying they're not at fault either, but it just makes no sense. So we have all this influx of people, no infrastructure. We have no additional roads being built because of them. We have no additional communities being built. We have no hospitals being built, no schools. Like we've totally, if you want to make a country and people that are living in that country, anti immigration, they've done the best job possible to do that because they've done this in such a piss poor way. And I'm a pro immigration. Look, my parents were both immigrants into Canada. Okay, like I'm pro immigration. We had a great immigration system. We, I'm happy to bring immigrants to Canada. This isn't an anti immigration thing at all. But I mean, the way they've done it, it's just like, it's stupid beyond belief. So yeah, you, you're seeing real challenges in it. And, and it's, it's, it's. When incomes can't keep up, you get to this point where things kind of get ridiculous, you know, and people are in bad situations because of it. And that's kind of what we're seeing, unfortunately. So, you know, as someone that owns assets and, you know like, like, You know, owns residential properties and there's a strong demand for them because of population growth and there's not enough supply. Like, yeah, like it's, it serves me. All these things serve me, but it doesn't mean I like it. Like I think it's stupid. So Yeah. I just, you know, there's so many different ways to go there, but basically, you know, what we're going to see moving forward is the headlines are going to be like, well, immigration's down. Okay. Because they're making some announcements for non permanent residents and students, but the, the immigration numbers are down from these ridiculous numbers. They're still up when the immigration rules change in 2014, and those numbers started picking up in 2015, they're still up very strongly from that. So even if we, we shave off 40 percent or 50 percent off this million mark that we hit, we're still Probably a couple hundred thousand over of where the target was. A hundred thousand of the more recent targets of the 400, 000. But we're still a hundred thousand over is 25 percent over a hundred thousand over the average, the average The average house in Canada's roughly households roughly two and a half, two and a half people. We're still tens of thousands of units short every year of housing units, not to mention the backlog that we're trying to, we're trying to build. So there's got to be something kind of fixed here. You know, and then the ones we're building are all these small, tiny condos and things like that. So there's got to be a real shift in what's happening. And you're seeing more people look into it. And the developers are talking to the government and they're trying to make headway. So much red tape and stuff. It's just, it's, it's almost impossible. So Canada has definitely gone through this boom. Now it's going to, I think it goes through a little bit of a lull because people are going to be like, I'm not going there. It's all screwed up. And it slows down the numbers, but it's going to slow down the numbers too. to a point that doesn't help us catch up. We could probably stop immigration for 10 years and finally start, and, you know, finally start to fix some of these problems and then start it again. And, and, you know, but I don't think it'll, it'll never get to that point.

Stephen: 33:53

Yeah, and it's interesting you mentioned that because when, when we look at the statistics, you know, the, the metric that they use or that you see in the headlines are housing units, right? Which, as you said, could mean an apartment, could mean a townhouse, could mean anything. But, you know, I, I think there still is that sentiment and that sort of, you know dream of home ownership for a lot of people. Immigrants and, you know, and, and, you know, established Canadians like that have this dream of, of owning a single family home at some point. Right. And so I think that's the challenges and maybe that's just sort of, you know, the reality of, of the situation for a lot of people for future generations here in Canada, you know, it's going to become more like Europe where, you know, it's just going to become more urbanized, more dense. And. You know, your single family home that you would typically aspire to here may look like a two or three bedroom condo or a sack townhouse or something like that. So

Nick: 34:52

they, if they even start building those units, because that that's the other thing that we're missing, no one's building those units. So now they've changed some rules in Toronto and we work with a couple architects down there that are built buying, you know, they'll buy. Two lots, two very narrow lots and they'll put like a sixplex on it. And that's finally some of the units we needed. And they'll put some, you know, some more reasonable, maybe two bedrooms or a little bit more space on these, in these types of properties, which is helpful, but it's not even owning the single family home at this point. It's like, they're just, they're Not like you can't even rent and live in one because they're just not available, you know, so it's Yeah, yeah, I don't know. I mean like we'll see what the future holds, but there's definitely some things some things are out of whack and if we bring it back to investing it's you know, it's why we You know the way our system is structured with with these price increases because you know Everyone talks about supply and demand and that's one thing 100 But the way our financial system is structured is it's all about It's the the way we create money and grow our monetary base is, has the direct impact on prices. So everyone just looks at the prices of things, but they don't realize what's happening behind the scenes is that we're just growing the amount of money in circulation, the amount of Canadian dollars. So there's very few things that will keep up with, with that debasement of the currency. And it's why a lot of people have rushed to real estate because it's one things that was able to keep up. But if you look at the historic numbers, even from about the year 2000, I think we have about an eight and a half, about an 8. 2 percent growth in the Canadian currency during from that period of time. Whereas we have about in Toronto real estate, we have about a 7. 8 percent growth in property prices on average every year. So the property prices, they've gone up only in dollar terms, but they actually haven't gone up as a, like as in relation to the amount of currency in, in play. And I know I'm changing topics and I didn't mean to, but I think it's like, So many people are focused just on this supply and demand and the population growth and it's a real issue But what's added fuel to that fire like, you know we that's almost like we have supply and demand problems and that's like the kindling in the fire and then the fuel to the fire of rent prices and property prices was the, the government's, the deficit spending that they decided to go on and print all this money that kind of really screwed up everything. And it screwed up, it screwed up groceries and all these other things. But anyone with savings wants to go buy a good asset that will hold its value and protect the purchasing power of those savings. And that's why people jumped into real estate. So we've got this big boost because of that. And if those policies don't change, I don't know if that changes, you know, maybe it does, maybe it doesn't. I just, I don't know. I don't see how it does without a policy change because if you keep the money in your bank account, you lose your purchasing, you lose purchasing power on it every single year that goes by.

Stephen: 37:45

Yeah. No. And I've heard you say that many, many times that, you know, different events and different you know, talks that you guys have given it's really, you know, We as individual investors, excuse me, can't go and change the system. So really the only way to kind of. Kind of get ahead of it and try to, to, to leverage and at least keep up with it is to own assets, right? And if you own these assets, which are, you know, part of this inflationary environment that we're in, at least we're, we're able to track along with it. Right. Whereas, like you said, if you just throw your money in a bank account, it's, it's not working for you.

Nick: 38:23

Yeah. Do you, I've looked at different reports and we've seen it, I, you know, I should fact check all this, but I believe because we've looked at stock market prices before and after adjusted for inflation over the last 20 years and things like that. And it, from my understanding it, the only three assets that have kept up with the monetary debasement is technology stocks, Bitcoin and leveraged real estate. Right. And that's the benefit of real estate is that you get to use that leverage and that debasement to your advantage because you don't have to pay cash for something you can use it. Right. You, you can use the leverage and you can pay it back with future dollars that are, that are cheaper. Right. So that's the only real three assets that have really made sense. If you look at the, the inflation adjusted price of any other of the assets for my, it's either 20 years or back to the year 2000, and it's almost like nothing else has kept up. Everything has lost, lost more value because of the, the money printing. And I'm talking about Canada and the U S those, those two economies specifically, but it's, it's really been global, right?

Stephen: 39:30

Yeah. No. And you, and it's to the extreme in the U S for sure. So, yeah.

Nick: 39:35

We're actually, you know, we, we print more money. I wish I wish I had these charts ready. We print more money than the U. S. We've actually outstripped the U. S. in, in, in printing, in printing money. It's one, one of the one things that we can say we're better at, at the U. S. then is debasing our currency.

Stephen: 39:54

you mean like relatively speaking, like per, per capita?

Nick: 39:57

Relatively speaking as a percentage, not per capita, but as a percentage of the money supply in base. Yeah. Not as the total money supply, but as a percentage of the money that we print every year, we we're doing it at a faster pace.

Stephen: 40:10

Yeah. And I think, so that, yeah, that would actually make sense to me, but the U S gets the headlines because they're just such a massive economy and they're in the trillions and trillions of dollars. But wow, that's interesting. Yeah. Okay. So maybe shifting gears into kind of, you know, the future and where you sort of see Rockstar going and maybe talking a little bit about strategies for as they kind of plan out the next year and maybe the next few years of, of their sort of investment cycles. I'd love to get your thoughts just on, you know, what are, what are investors doing now and maybe just planning to do this year to, to be a bit more sophisticated and I'm talking to, obviously in the residential market where, where you guys focus in you mentioned sort of, you know, single family homes and. Adding more units, things like that. What sorts of things are, are investors doing and, and what are you sort of seeing and, and planning for the future with with how you're kind of helping these investors out?

Nick: 41:07

Yeah. I think the number one thing that people. are looking at now with their properties is what options does it bring? So I think investors really like looking at properties that give you, you know, you don't, you're not tied to one strategy or you're really tied to something. And, and I'm not, I don't mean to pick on condos, but I'll use condos as an example. Again, you know, if you have, if it's a 30 story building and you have unit 1201 and it's the same as 1301, 1401, 1501, right? You're really, there's not much you can do with that property. You can't add another unit. You can't add a second entrance. You can rent it out. Maybe by each, if there's a two bedroom, you can each rent out each room and see if that offsets something a little bit, but you're tied to the condo corporate. Whereas. The investors that are buying a property and you know, maybe it's maybe it's a town home or detached. You know, I always think of these older, I grew up in Mississauga and one of the things I always looked at, there was these great semi detached raised like a 72 story semi detached home. So you, you pulled the driver, would you pull on, pull in on the lowest level and there was a second story. You'd walk up some stairs to the second story. And I always looked at those things. I'm like, man, I love that. You can live upstairs. That's it. Rent out the basement. Like it just seems like such a such a good system or you rent out the two units. And now I think of the older like three bedroom bungalows with the side entrance and the and the the the the driveway at the side side entrance is a is a a separate entrance for another unit, you know, so you, so maybe you're buying a property and you want that and it gives you the option to kind of split it up and then do what you want with it or to put it in a garden suite or to do laneway housing or to potentially, if it's a big lot, potentially knock it down and do something with it, you know, so there's, it's just nice to have those options. future options. Even if you, even if you never do anything with them, I think that's what investors are looking at. They're like, okay, so I'm getting this. Here's the way this thing works now. Like, it kind of, it makes sense now. It's not so bad, but if I do want to do something with this in the future, there is some upside. It's work, it's, it's, it's capital costs to do this stuff, but there is some upside to that if I want to take advantage of it. So I think that's where more people are going. We're seeing a definitely a trend towards density. We're seeing, we're seeing a few different people that we work with going into specifically the Toronto area, but with some changes there that they're just that that we're seeing. for density there and like I was mentioned before, taking a couple lots or scooping up a few lots and building small buildings that way, multiplex buildings that they can get they can get good financing for CMHC right now has good financing on those types of residential options. You know, depending on there's, there's a number of factors, but depending on some of the factors is up to, was it 90, 95 percent loan to value. And the bank's always like it when it's insured. So it's lower rates, you know, so there's, there's options there for sure. So a lot of people are doing that. And I think that type of, you know, I think that type of thing is going to be the future. I think providing good housing units, good, safe, livable housing units to people is going to be an opportunity for investors moving forward. And our belief is that, you know, in the way our system is structured, there's value to owning good assets. And we've, we, you know, we want to own assets and assets to us, give us financial flexibility. They're like the foundation that we can build upon. So if we're able to scoop up good assets, I'm talking, we, as myself or other investors, that that's kind of what we're looking at doing. Because if, if with this much, like you mentioned, the US, you know, they really, their economy really runs the world and their, their, their currency really runs the world as the American dollar. So as the currencies continue to get debased, like the US has all this debt in the system. Canada has all this debt in the system. How are they going to pay that off? I, you know, likely by printing more money through inflation. And if that's the case, then we would want, we would rather own assets in our lives, something that will protect the purchasing power of our savings versus just leaving some money in the bank and seeing that that be diminished. So I think that's, that's where we're focused over time. And, and that's really to answer your other part of that question about rockstar, that's really. I think where we see rockstar heading as well is maybe expanding outside of just real estate and being like, Hey, there's other opportunities for us for assets as well. And then we're seeing demand from, this is within real estate, but even outside of Canada, whereas, you know, we started playing in the U S a little bit with some relationships that we have down there because we're seeing more Canadians come and say, Hey, like, look, I'm not sure if I like the way things are headed here as much as I did. I'm not saying I'm taking off from Canada, but I do want to leave some options open. So, you know, do I take some, some money, like maybe I buy some properties in the US and we have some you know, a good friend in Florida that has a whole structure built around this and he's doing built to rent and works with the institutional investors, but we'll work with the investors we work with as well. And You know, so some people are taking some funds and putting them in the U. S. as just like an opportunity to like in the future, maybe, you know, I have a couple of investment properties down there and then they will take those funds and do something else down there with that. So we've kind of expanded based on where we're seeing, I guess, developments in the country go, where we're seeing maturing investors want to go and where kind of our own kind of, you know, path has taken us as well. So there's a couple of different things going on that way.

Stephen: 46:35

Yeah, I know. And I think that's good because as you said, you know, part of part of what I'm seeing in the market is like, you know, I think we're reaching a point here in Canada where affordability is becoming a challenge for a lot of people. You know, the population's growing, we're maturing as a society, we're definitely getting older in terms of demographics and things like that. So I think it's, You know, the onus is on us as investors to have a look at, you know, what the market we're playing in and if it doesn't work anymore, or it makes sense to diversify outside of Canada, into the U. S., into other parts of the world, even, then we need to be able to look at that. And, and, and I think. Technology is definitely helping and, you know, having different groups such as yourselves that can maybe make some introductions or have a program where, like you said, you've partnered with somebody in the U S I think that's great. And I, I think, you know, us as investors really need to take advantage of that because there are options out there, right? Like, I mean, it's, it's, it's something that definitely we, we should be looking at and it's, it's just part of being a sort of a, you know, a comprehensive investor if you want to put it that

Nick: 47:45

Yeah, yeah, there's always options. I think it's just. You know, you talked about the difference in markets recently, like earlier, it's almost like we've gotten lazy as investors because it was just like, buy something, price goes up, you know, but, but yeah, are the options hard to find now? Yeah. A hundred percent, you know, especially as more money was in the system chasing all the, all those investments. But I mean, you know, five years ago. the options were harder to find than 10 years ago. You know, so I don't know that in five years from now it's going to be any easier. Like we could look at today and be like, Hey, the numbers are tighter to make work today, but they might be better today than they are in five years. And we don't like, we don't know because that's proven true really since we've been in business, you know, for almost 20 years, it's consistently gotten a little bit harder to, to make things, make things work. I don't, I'm not talking about from price appreciation. I'm talking about from a cashflow in, you know, a positive cashflow investment opportunity. It's, it's kind of gotten a little bit consistently harder. So yeah, I just look at these, like if it's, you know, something that I'm interested in now, I should look now because you can always wait and see what happens. You know, I don't know. You just look back and you're just like, Oh, I should have done this a long time ago. I used to drive to Oprah. I went to Sheridan College. I used to drive along on a bus along Dundas down Trafalgar. I grew up with the East Suddenness Saga. And I would look at these homes that they were building. At Trafalgar and Dundas, they were townhomes. They're behind, if anyone's familiar with the area, they're behind like the Canadian Tire that's there now. And I remember thinking when they were building those, Who the heck would want to live all the way out here? Because in my small world at the time, Oakville was like the edge of the earth, Right. And the properties were selling like in the 100s. You know, and it's just like, you know, so everyone can look back and say, Oh, I should have done that. I look back and be like, I should have just bought one of those, you know, even, even when I was in college, you know, I could have figured out a way to figure out how to buy one. Right. So yeah, I don't know. I definitely think there's opportunities if you want to. I mean, if you're someone that doesn't want to look for opportunities right now, then don't look, it's not for you, but I definitely think there's opportunities. And I just don't know. Yeah, I don't know if it's going to get any easier and I wouldn't bank on it getting easier. So you got to make something work now. Yeah.

Stephen: 50:10

yeah, for sure. One thing I wanted to ask you about was just and, and we've talked about this on on previous discussions and podcasts is What we're doing for the next generation and things like that. And I'm wondering if, and I've seen some of the members, even at rockstar developing, you know, financial literacy programs for kids and things like that. Is that something you guys are, are looking at doing maybe, or making? I don't know, rock star and going back to this brand thing more about this, I don't know, this, not, not so much just focus on the individual, but more of a family and more of a lifestyle and a bit more holistically. And have you guys talked about that at all?

Nick: 50:47

We, we've been asked for that for a while to do something for kids. And I think it's just, we don't know, you know, exactly where that is. We're like, we haven't put the time on that, what we've seen happen. And you know, maybe we could try to foster this a bit more by, by putting some time on that. But what's really cool is when the kids get a certain age and the parents feel like they're going to be comfortable. with it is that they bring them to the events. I've heard many people say, Hey, here, here's my, my, my, you know, my kid, they listen to, I make them listen to all the podcasts and things like that. I'm like, Oh my God, I'm so sorry. I apologize to the kid. I'm like, I'm sorry that you're listening to that. But so I think that's kind of just, you know, naturally organically that, that happens. Part of the reason we've never, we, you know, one, one barrier is always like, well, we don't want to. Be involved in parenting. Other people's kids, because I, maybe the parents don't agree with some of the lessons, you know what I mean? Like maybe one of my beliefs, I'm going to say that, but hey, that guy's wrong. Don't do that. So it's just something that we're like, we're not there. But if, if the parents seem to think some of the stuff that we do make sense and they want them involved, we've always been. more than open for, for them to, to come together and for us to assist in any ways and all sorts of stuff. You know, we've had meetings with members who have started business, their kids have started businesses and their kids have wanted to talk to us about, Hey, you know, some stuff that if we can help that help them with that. So, so, Yeah. it's, it's, there's no, no formal program, but. I think it's really important and, and I think it's just part of, of the community, but it has been cool to see Mark and Anthony, which is, I think what you're mentioning is they've put together this financial literacy course for kids, you know, and they met in the community. They're offering it to people's kids in the community. They're getting good feedback from it. And I'm like, wow, that's like a really, really cool. Byproduct, you know, we're not doing any of it, but if it, if somehow there was a little bit of a catalyst because of what we did, we're like, that's, that's really cool, you know,

Stephen: 52:50

Yeah, that's cool. Okay. So as we're wrapping up here, Nick, I just wanted to kind of give you the opportunity to kind of share, you know, the best way for people to get in touch with you. That's anything you want to plug in terms of what Rockstar is doing, that's coming down the pipe and maybe just how people can connect and learn more.

Nick: 53:06

yeah, no, the, I mean, the best place for everything is just rockstarinnercircle. com. We have everything there with a podcast. If you want to check that out, so that your life, your term show that's everywhere as well. But if you go to rockstarinnercircle. com videos, articles, reports, podcasts, whatever, you know, everything we're doing is, is all there.

Stephen: 53:25

Okay. That's awesome. Well, thanks a lot for coming on the show, Nick. I really appreciate it. And yeah, I've really enjoyed the conversation with you today. So thanks a lot.

Nick: 53:33

Cool, man. I appreciate it.

53:35

So, hope you got some value out of this podcast episode. I invite you to like and subscribe to the podcast, leave a review, leave a comment. Let us know what you think. And for any other information about us, what we're doing and the types of investments we're into, please visit focuscapital. ca, focuscapital. ca. And on there, you can find a ton of information, additional podcasts and a lot of free resources. So that's it for this podcast episode. Bye for now.