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 talk about!

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:

It is published every Thursday, if you have been forwarded this email and would like your own copy click here to sign up.

Thursday January 10th, 2008

In this Issue:

- Renegade Commentary: Gonna Burst Your Bubble

- Featured Article: Cash Flow Is A Mystery for Canadian Real Estate Investing Beginners

- Investing Strategy Tip of the Week: "Nick, I can't take it anymore!"

The next FREE Real Estate Training Workshop:

Our next real estate training class is on Saturday January 26, 2008 at 10am in our Oakville offices. In this class you will learn how to profit from Real Estate without having to rehab and renovate distressed homes and create steady monthly income for yourself.

You'll also learn about actual real life success stories of investors doing this right here in your own backyard. To get all the location details and hold your spot (because we regularly fill the class!) visit:

Renegade Commentary:
"Gonna Burst Your Bubble"

Nick and I were chatting with a few young guys out in Brampton looking to get started with real estate investing.

They were asking us about the Toronto Star article over the weekend that showcased a bunch of Torontonians moving to Hamilton because of the attractive property prices.

We were covering a lot of good stuff, explaining how to look at properties and how to maximize returns with a could of simple techniques.

They were like sponges.

Soaking it all in.

And then it happened.

They asked THE QUESTION.

"So Tom/Nick, what is the one book you would recommend to get started in real estate investing?"


There's a secret out in the real world that I'm don't know if I should reveal.

I'm not sure you're ready for it. But I figure if you've signed up for this newsletter you're obviously cut from a different cloth and have not been assimilated into the thinking of the masses.

So here goes...

There's no single book. There's no single strategy. There's no one right answer.

Sorry. I told you I was going to burst your bubble.

There's no one "right" way to run a business.

And there's no "single way" to invest in real estate.

We all want the answers to everything "right now". No one wants to wait - for anything!

Maybe it's because we buy things online and get "instant access" to our purchases. Or because we're all driving around town in our SUVs hopped up on Grande Lattes from Starbucks.

Whatever the reason, it's affecting our judgement.

Learning about real estate investing is a process.

You need to read 15 books, you need to study, you need to find mentors that can offer real world experience and you need to act.

Each book and mentor will give you a piece of the puzzle. It's up to you to put all the information together into a long term strategy for yourself.

We're all different. We all thinking differently, we all have different backgrounds, we all have different financial resources and different networks.

A strategy that works for one person so well may be the absolutely wrong thing to do for the next person.

A book like "Rich Dad, Poor Dad" by Robert Kiyosaki covers the big picture of real estate investing extremely well.

It gets you into the "mood" to invest.

And a book like "Creating Wealth" by Robert Allen may give you more of a strategy and vision for your investing.

A seminar on real estate investing may give you some more of the "details" required to actually get started.

And a mentor or coach can hold your hand and walk through the process by your side.

It's up to you to connect these dots.

Real Estate books are sold as the "silver bullet", the "be-all-and-end-all" of real estate investing because that's what the "masses" buy.

And that's fine, there's likely a gold nugget in each of these books for you.

Just don't fall into the trap that there's one single book to solve all your problems, there never is.

So we set those young guys straight.

They're off getting started and now they have a better context to work with.

By the way, we're kicking off 2008 with a FREE Real Estate training class in our Oakville offices, if you're up for it, and would like to meet us in person register for it by clicking here.

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:

  1. How you can turn 3 Single-Family homes into 24 homes without investing any additional money by having homes buy homes. EASY WEALTH!
  2. 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 and fill out the form at the bottom of the page.

Featured Article:

Cash Flow Is A Mystery for Canadian Real Estate Investing Beginners

Cash flow has got to be one of the most debated topics of Canadian real estate investing beginners.

So many beginning real estate investors will decide whether or not a real estate investment is good or bad based on the answer to this single question:

"Will the property produce positive monthly cash flow? Give it to me straight Tom, yes or no."

"I want a nice simple answer."

"With residential property prices going up so high I'll have to drive 24 hours straight north into the frozen tundra to find a property that cash flows these days."


Basing your entire decision on the answer to positive cash flow question is a very limited way to look at an investment.

Sometimes there just isn't a one word simple answer for you when you're looking to create wealth.

There are several things Canadian real estate investing beginners need to consider.

Numero uno...

How much money are you putting down on the home?

Most Canadian real estate investing beginners don't realize that it's only been since about 2006 you can buy an investment property with 10%, 5% or even 0% down in Canada.

It wasn't that long ago that my local TD Branch was telling me that I had to put down 25% or even 35% down on an investment property.

So the first thing you need to consider is that there was a time when investors were putting down much more on the property as a down payment.

This lowered their mortgage amount, and therefore lowered their carrying costs, and thus resulted in a higher frequency of securing properties that produced monthly positive cash flow.

Today Canadian real estate investing beginners have the opportunity to buy investment property with 10% down or even 5% down (even 0% down!) using standard mortage programs offered by Canadian banks (no funky hard money loans or vendor take backs - although these can be extremely useful and we'll discuss them in another article).

There are a few other things to consider.

Like, what are your financial goals?

Are you leveraging yourself for maximum advantage?

Are you using tax deductions like you should?

Are you forgetting that the mortgage is being paid down every month?

Let's Take A Look At This More Closely...

Let's use a $250,000 property and assume that you have $55,000 to invest in real estate.

We could use a property of less value but a starter home for $250,000 or less covers almost all regions across Canada.

For you Canadian real estate investing beginners in downtown Toronto or Vancouver screaming that it's impossible, a 45 minute drive out of the city will get you properties like this.

A 25% down payment on this property would look like this:

$250,000 Purchase Price
$52,500 required for 25% Down Payment
$1,055/month in carrying costs at 5.89% and a 40 year amortization
$225/month for Property Taxes
$55/month for Insurance
$1,335/month are your carrying costs

Can you rent out a $250,000 property in most parts of the country for $1,600/month or more?

Yes, definitely. Easily even.

So if you take the $1,600/month in rent and subtract the $1,335/month in carrying costs you're left with $265/month in cash flow, right?

Well that's how most Canadian real estate investing beginners look at things.

But it's not uncommon to have at least one or two $300 expenses of some sort on the property throughout the year.

A pipe leaks, an electrical outlet stop working, a shingle goes flying off the roof, the furnance needs get the idea.

When these hit on any given month is your property still a positive cash flow property?

Hmm...yes or no?

Well most Canadian real estate investing beginners use a very short window of analysis.

Typically, they look at a single month at a time and then when they get hit with that $300 repair they'll scream something like this:

"My property isn't a positive cash flow property any more, the sky is falling!"

But they are focusing on too small of a window.

If they look at the entire year they'll see that even with a couple of expenses the property is still producing positive cash flow.

And here's where things differ between beginner real estate investors and experiences ones.

Experienced investors will look at the whole picture. A 12 month period, at least.

They want their money to be working as hard a possible for them.

So they take into account things like tax deductions, depreciation and appreciation before making any decisions on whether a property is a good investment or not.

So even if the entire positive cash flow every month is eaten up they won't consider the property a loser.

The cash flow may be zero but the 'tax flow' may work to their advantage (Tax Flow is a term I picked up from one of our clients, love it).

For the full article click here to continue reading...

Successful Investors "Spill the Beans"

My son came up with the idea of having some of our real estate investing clients "spill the beans" on a teleseminar call. He thought it would be a great idea if you could hear from others how they are creating wealth for themselves. Well, we couldn't agree with him more ;)

We did it and even helped him set up a website to share it with you.

If you want to eavesdrop on how people are making money in real estate right in your own backyard visit and you'll get instant access to a recording of the call right now!

Investing Strategy Tip of the Week:

"Nick, I can't take it anymore!"

One of my first investments was a regular rental property with Nick. Not a "lease option" or anything fancy.

A rental.

And I almost quit real estate investing because of it.

Let me explain...

When we closed on this property Nick decided it was a good time to go to Europe on vacation.

And that's another GREAT story for another time, you won't believe some of the things that happened to him in Paris. Let's just say there was a Internet Cafe, a bloody nose, a parade and a loaf of bread involved. And one scared Mom who called me at 5am in a panic. Wow.

Anyway, back to business...

So I was left to handle this thing by myself.

There were some tenants in the property and I went to deliver a microwave oven that had broken and cut the grass. I was petrified, had no idea what I was doing when I went over to chat with those tenants.

I was so new at investing that if they had asked me for $100 I probably would have given it to them just to keep them happy.

Funny how things change.

A few weeks later Nick returns and we end up losing the tenants. I guess they didn't like the microwave oven I had dropped off.

So we start advertising the property. I got two bright yellow pieces bristol board, taped them together, and wrote FOR RENT with a huge sharpie marker across them.

This sign was so bright it almost let off a nuclear glow.

I put my cell phone at the bottom and started taking calls. In another article or newsletter somewhere I describe why you must use voice mail and never use your cell phone to take these calls.

When people call I begin making appointments to meet them at the property.

I'd make one appointment for Tuesday at 7pm.

Another for Wednesday at 11am.

Another for Thursday at 9pm.

I was trying to be accommodating and show up whenever the possible tenant wanted me to.

Big mistake.

Each time I'd go something short of a disaster would happen.

Either they wouldn't show up and I would just sit outside like a fool. Waiting, and hoping, that they might show. Because I was so new at this I didn't even ask for a phone number to reach them so I couldn't follow-up and explain that I had waited for them for an hour and didn't see them. Sheesh.

Or they would show up, late, and then pick apart the house. The carpet had a small tear, or the light in a room was a bit dull, or the room size of the third bedroom was just a bit small.

I would be standing there feeling like I had purchased the worst property known to mankind.

And it was great calling my wife at home and letting her know that yet again I had failed to rent the property. Not fun!

I finally called Nick on the way home from one of these "episodes" and just screamed, "Nick, I can't take it anymore!"....."Just tell everyone that calls from now on that we'll be at the property Saturday at 2pm, they can live with that or not, I don't care anymore!"

I was fed up trying to be accommodating to everyone.

So for the next five or six days we just told everyone that we would be there on Saturday at 2pm.

They could meet us there.

And then it happened.

We had about 40 people, that's right 40 people, standing in front of the house.

I gave each group a number and let them know that was the order they could go through the house.

Nick gave the tour and I stood outside as the "door man" controlling the crowd.

Magic was in the air.

Because we made everyone wait outside they would hear the comments of the other groups who came out of the house. And the comments were positive!

All of a sudden our property was in demand. The little tear in the carpet and the room that was a tad small was no longer an issue!

It's funny what a little competition does.

The third group into the house wouldn't leave. They handed us cheques for first and last and I took $200 or so in cash (because who knew if the cheques would clear, right?).

And that was it.

In 45 minutes we were all done. Property rented. Easy as pie.

So the next time you're renting out a place make sure you created demand. There are many ways to do it.

We've gone on to tweak the process and nailed it down.

You don't have to make everyone wait outside like we did, but make sure you are investing on your terms and on your schedule.

Have everyone show up at the same time. This is a big BIG tip.

It could save your real estate investing career, like it did mine!

Until next a Renegade!

About The Real Estate Renegades

Tom Karadza & Nick Karadza run the Income for Life real estate investing system for their members throughout the Greater Toronto Area.

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 authors of the book "Income for Life for Canadians", to be released in January 2008.

They also offer FREE real estate investing classes, FREE reports, 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:

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