The Renegade Real Estate Investing Newsletter
"Cutting Through the Real Estate Investing B.S."
This FREE Real Estate Investing Tips newsletter is your window
into the world of real estate investing. You will never get closer
to the real action than learning straight from two Canadian brothers,
Tom & Nick Karadza, who are actually implementing the strategies they
In this weekly publication you will get access to our real world guides,
trends, tips, strategies and "how to" information that is being implemented
"on the streets" with real people, right here in Canada.
To access the full list of articles visit: www.TheRealEstateRenegades.com or check out their new blog: Blog.TheRealEstateRenegades.com
It is published every Thursday, if you have been forwarded
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Thursday July 17th, 2008
In this Issue:
- Renegade Commentary: The Road to Ruin: Specialization vs. Diversification
- Featured Article: Real Stories from "The Streets"
Income For Life Updates...
Well the word is out. Our Income For Life "Members Only" event next week is just around the corner and we have an exciting line-up with a few surprises. We let one them out of the bag last week when we announced that Harry Stinson would be a guest speaker. Harry is a prominent Toronto developer who has had a variety of ups and downs throughout his real estate career.
He possesses an amazing ability to persist through almost any obstacle thrown at him. His latest project is a 40 storey tower in downtown Hamilton. It will definitely be interesting to hear him share some of his experiences. We're almost at capacity for the event, it's going to be a blast!
On July 24th, 2008 we have our next Quarterly Income For Life Member's Only Event. This is where we get actual Canadian investors who live right here in the Greater Toronto Area to stand up and share the details of how they do what they do. We call it the HOT SEAT and its become the most anticipated part of our events.
We know this sounds crazy but we actually *do* what we talk about with local investors right here in the Toronto area.
This event is for Income For Life Members Only. Not a member yet?
Click here to apply, we'll call you within 48 business hours to see if you qualify!
The Road to Ruin: Specialization vs. Diversification
The other day we had a professional engineer chat with us about how many courses he takes to upgrade his skills and knowledge. He was really becoming known for some specific work in the telecommunications area. And because of his very specialized knowledge he explained that he could demand very high consulting fees.
He worked long and hard to achieve this status and was obviously proud of his accomplishments.
As we continued to chat he explained that he wanted to invest in real estate and wanted someone to handle everything for him. He didn't want to get involved in anything.
At that moment it became obvious that:
1. He was working hard to develop and increase his INCOME.
2. But he was not putting any time or effort into developing his WEALTH.
So short sighted.
I'm not sure who is to blame for this. Maybe no one. We each have to take personal responsibility for our lives. Maybe our schools could be doing a slightly better job at teaching financial literacy. But they can't shoulder all the blame.
Anyway, the conversation continued and he explained that although he had a well diversified portfolio he lost money recently and couldn't understand why.
Upon questioning we learned that to him a "well diversified portfolio" was a combination of stocks and funds in the stock market. There was no real estate, no commodities and no business investments.
His portfolio really wasn't diversified at all. If the stock market went up his portfolio went up. If the market went down, so did his wealth.
Let's take another look at this.
He was spending a lot of time become a specialist in one area (a niche within engineering). And because of his skill he was highly paid.
But when it came to investing he thought that he shouldn't specialize. He believed that "diversification" was the road to wealth.
Well maybe diversification is the road to ruin.
I bet he was taking advice from someone who had no business experience, no real estate experience and wasn't specializing in anything themselves.
Warren Buffet has this great quote:
“We think diversification, as practiced generally, makes very little sense for anyone who knows what they're doing. Diversification serves as protection against ignorance."
It's interesting to see how most of us focus on income and take all sorts of courses and degrees to increase it. And putting any effort into increasing financial intelligence is kicked to the curb until "we have time".
One road my lead to prosperity and the other may lead somewhere else.
You do the research.
Until next time...be a Renegade!
Tom & Nick Karadza
"The Real Estate Renegades"
Real Estate Investing Step-by-Step:
To learn more about our investing approach and the system we use
with our members you can request a copy of our FREE Report to be
mailed to you. In it you will learn:
- How you can turn 3 Single-Family homes into 24 homes without
investing any additional money by having homes buy homes. EASY WEALTH!
- How you can create Income for Life in just ONE hour of spare time
a day! This means NO FIXING UP DISTRESSED HOMES!
To request your own complimentary copy of our investing in "Nice Homes
in Nice Areas" report go to www.LeaveWorkOneDay.com and fill out the form
at the bottom of the page.
Real Stories from "The Streets"
Whenever you look for Canadian real estate investments you end up researching online and I find a lot of real estate articles that focus on the "Top 10 Mistakes" or the "Most Important Numbers You Should Know" or "Accounting Essentials".
Basically, a lot of theory on Canadian real estate investments. And I'm guilty of writing these things myself.
But when you're starting out sometimes real stories from real investors give you the most insight.
And its because most people spinning out these real estate investing articles don't actually work directly with any investors...so there's a gap in the information. I'm not 100% certain they even work with any Canadian real estate investments at all.
I think that feeling comes from the first person that was going to sell me some Canadian real estate investments. His advice was this, "Buy them, real estate appreciates".
And because I didn't know any better at the time I missed out on asking a ton of other stuff.
Let's park the theory and get to the real stories of real investors in the real world working with real Canadian real estate investments.
The stories that come from only working "in the trenches" and "on the streets" and getting things done.
Ready? Let's go...
The Case Of "I Want To Sell It!"
We were working with one investor who purchased a great single family home investment property just outside the Greater Toronto Area and wanted to sell the thing darn thing two weeks after buying it!
I think here words were something like this,
"I'm done with all Canadian real estate investments. I don't think this is for me!"
If she tried to sell it at that moment she would likely have lost at least $15,000 because of the commissions and closing costs involved, no laughing matter.
See...when the real emotions of fear and anxiety kick in all those great books that teach real estate investing (think Rich Dad, Poor Dad or Millionaire Next Door) get thrown out with the trash.
Emotions are powerful things and you need to fight to keep logic from escaping you when this happens.
This investor closed on the house and then didn't do very much of anything to get a tenant to rent out the place.
Buying any Canadian real estate investments is only part of the process. You need to keep going and get your property rented if you're going to profit from the thing.
She actually did place one classified ad for one day, but that's it.
Well I can tell you from direct experience that one classified ad for one day is a better than nothing but it's not enough.
The crazy part is that off that single little ad she had a call from someone interested in the home but she turned them down because they didn't "sound" like a good fit. The decision wasn't based on any facts.
The fear of having a mortgage payment approaching and not having a tenant in the house was apparently too much to bear and she started acting irrationally.
So we stepped in and settled her down. Asked her to focus on the little things.
Forget the big picture for a moment. Forget building your empire. Forget buying 15 other Canadian real estate investments. Forget equity build-up, possible appreciation, tax deductions, cash flow, forget it all.
We just asked her to focus on one baby step at a time.
Place an ad for your house. Answer the calls. Get people to the house. Get applications. Accept a tenant.
Don't focus on the mortgage payment. Don't focus on any "what if" scenarios that are likely not going to happen.
Don't go and shovel the driveway 7 times a week (shoveling doesn't make you money - getting a tenant into the house does).
And as soon as she focused on the little important activities things began to flow.
Calls came in from her ad. She met people at the property.
And you know what...within one week of "re-focusing" on the activities that make money, she got a tenant.
She even managed to collect a few thousand dollars right up front.
Job well done.
The Case Of "The Shiny Object"
WARNING: What you are about to read is not PG rated. Stop here if you only watch G rated Disney flicks.
Have you ever seen a chicken running around with its head cut off?
For the full article click here to continue reading...
About The Real Estate Renegades
Tom Karadza & Nick Karadza are authors of the book "Income For Life for Canadians",
available on Amazon.com by clicking here,
and work with a select group of real estate investors throughout the Greater Toronto Area.
They actually do what they talk about it.
They have been called 'Real Estate Renegades' because they are implementing
real estate investing strategies that were once thought to be impossible by
many 'industry professionals'. They are part of several mastermind groups in Canada and in the USA and publish a monthly 12-page real estate investing newsletter and audio series exclusively for their clients.
They also offer real estate investing classes, reports, one-on-one coaching
and mentoring, and other resources to help both beginner and experienced
real estate investors achieve ultimate success. Learn more now at:
You can meet them in person at their next FREE Real Estate Investing Class, "How to Invest in Nice Homes in Nice Areas" by signing up here: www.CanadianRealEstateTraining.com
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