The 5 Questions Podcast
Join us as we unlock real estate and business insights, one question at a time.
The 5 Questions Podcast
Firefighter to Fortune: A Real Estate Success Story with Paul D'Abruzzo
Paul D'Abruzzo shares his remarkable journey from Toronto firefighter to successful real estate investor with a $45 million portfolio built over 15 years through strategic property acquisition and management.
• Balancing firefighting career with family life and real estate investing became unsustainable, leading to a focus on "Return on Lifestyle" (ROL) beyond just ROI
• Learned three key principles during the 2009 financial crisis: passive income streams, real estate investments, and cash flow
• Navigated rising mortgage costs by improving tenant relationships, reevaluating underperforming properties, and enhancing income on existing properties
• Built portfolio success by finding effective strategies and scaling them rather than chasing "shiny objects" or speculative investments
• Recommends starting real estate investing as a side business while maintaining stable employment initially
• Emphasizes the importance of having clear, emotionally meaningful goals and surrounding yourself with experienced mentors
• Advises taking a step-by-step approach: perfect one property before expanding
Download Paul's book about navigating the Canadian real estate market at http://expertinvestoracademy.com/playbook/
It's a get-rich-slow kind of game.
Speaker 2:Welcome to the 5 Questions Podcast, where we unlock real estate and business insights one question at a time. Welcome to the 5 Questions Podcast. My name is Mario Lamar, I am the host of the show and today our guest on the show is a former Toronto firefighter who turned his passion for real estate into a highly successful investment career. His journey is one of resilience and innovation, showing us how strategic thinking and adaptability can lead to immense success, even in volatile markets. I present to you Paul D'Abruzzo. Paul, welcome to the show, welcome, thanks for the great intro.
Speaker 2:Paul, the concept of the podcast is very simple Five questions about either real estate or business and we get straight to the point. You ready, yes, sir. So, as mentioned in the intro, you transitioned from a stable career in firefighting to real estate investing. What inspired that leap and maybe, how did you prepare yourself for that change?
Speaker 1:Yeah, it wasn't easy. I started investing in real estate 15 years ago, right about 2010, and I was actually just getting hired to the fire department at the same time. Okay, so I mean, I was the fireman and the firefighter for about a decade and you know was building my portfolio the whole time. You know firefighters like to have side gigs. You know a lot of them are policemen or carpenters and I know guys who set up movie sets like crazy stuff and car mechanics. And you know my side gig, you could say, was real estate investing.
Speaker 1:But it grew and you know, thankfully, thank God it grew. And you know, thankfully, thank God it grew. And you know it did well for us. We worked really hard to grow a portfolio that had a positive impact on our lifestyle, but we got to a point where it was large. You know large enough that it was taking up a lot of time. You know, plus, I needed to dedicate myself to becoming, to being you, to being a good firefighter. Plus, I had a family, a wife, three kids and on top of that, believe it or not, I had gotten my real estate license shortly after I started investing and was specialized in only working with other investors, helping them acquire more investment properties, the same way that I was doing.
Speaker 2:Yeah.
Speaker 1:So I was doing all those things at the same time and my health started to deteriorate near the end. Just a lot of stress, too much work, not enough hall time. Something I had to give it was either give up my family, give up real estate, give up my business or give up firefighting. So it took me about a year of you should say healing and to get the mental clarity to finally let it go, and I guess I had to come to the conclusion that enough was enough, right? You know, trying to do all those things at the same time, although it was getting me ahead for so many years, was actually having a negative return on my lifestyle after a certain amount of time. So it took me some time to realize that, but that was the origin of how I started and how I left the fire department.
Speaker 2:This is a great story and sometimes you're right. You know we try to juggle a bunch of different balls at the same time and sometimes, when it's too many, we're going to drop some right. So it's better to take a step back and do the things that we love and the things that brings us fulfillment, as at the same time.
Speaker 1:That's right. Right around that time I coined the new term, you know. After coming to all these conclusions, we've all heard the term return on investment, you know ROI.
Speaker 2:Yeah.
Speaker 1:So I I coined this term uh, rol, return on lifestyle, oh yeah. So what I mean by that is you. That is, the bigger decisions I make and the bigger investments I make have to have a good ROI. Of course, they have to make money, but they also have to have a good positive impact on my lifestyle also, and I find that's something we don't look at very often and we don't measure it. It's easy to say, yes, I'll buy this property and it'll help me in my retirement later, but that's not good enough. We have to dive deeper, and maybe that's for another podcast, but the ROL calculation is important.
Speaker 2:Absolutely. I want to go to the second question because it's a little bit interesting. When you decided to start investing in real estate, you started during the 2009 financial crisis, 2009, 2010. What lessons from that time did you carry forward into now, your more recent investments?
Speaker 1:Yeah, an interesting time. At the time I was young and stupid. I, you know, was 23, 24 years old. You know, you're kind of in that stage you don't know what you don't know, right? Yeah, yeah, you haven't, you haven't even had time to make mistakes. So, you know, I was reading lots of books, like I'm sure many of you have, or you and your audience has reading lots of books, like I'm sure many of you have, or you and your audience has. Excuse me, and, um, I attended a, a conference in toronto. It was, uh, you know, hosted by one of these kind of guru, mastermind kind of guys. His name is, uh, t t harv ecker. He wrote this book called millionaire mind something, and then his whole thing was to get you into this conference and at this conference he would sell you like a big ticket conference somewhere else. So I remember being young and stupid and, or I guess say, young and naive, and he was selling this conference there called Never Work Again.
Speaker 1:You know all about how to build passive income streams so you never have to work again yeah so I attended this conference in california by myself, um 23 years old, and, uh, you know, quick, quick story. You know we're there and they did this. You know, big energy thing. You know, like a tony robbins style, get everyone fired up and then at the end of that they're like okay, everybody under 30s, you know, stay standing. You know, 29, 28, 27, 26, 24, 25, and by the time they got to 23, it was me and one other guy in the corner and I'm praying like, please, buddy, please don't let it be me, right. So the guy goes 22 and I sat down and the guy, the guy in the front there was 22 and he gave me some award. Anyways, when I was there again young and naive, it was just as the financial crisis was starting to happen and they were talking about it like crazy, right.
Speaker 2:Yeah.
Speaker 1:But the one thing I noticed, three things. One, the people who had passive income were okay. Okay, and how do you get passive income? Well, there's a million different ways, because this conference had all these things, but I noticed that more than half of them were somewhat real estate related Rental properties, buying tax liens, americans, they have all these creative things mortgages, anyway. And then the last thing I learned was cash flow, and I'd never heard this word before. I'm like, well, what the hell does that mean? It just stuck in my mind. When I came home, I was like, okay, passive income, real estate, cash flow. You know what I mean. I guess back to your original question. The lessons about the financial crisis came after, after after it was, after all, the smart people had a chance to dissect it all yeah but in the middle of it, what made me decide to invest was those three things.
Speaker 1:I figure from all these people who are getting killed, all the ones who are doing well, we're doing those three things, and if I can do those three things, I'll be okay too and that's what made you continue, that's what made me continue to carry forward till uh, your investments today yeah, I uh, I mean we pretty boring, I.
Speaker 1:You know we started with single family stuff. We did rent to owns, we did student rental, we did smaller multifamily, we did duplex conversions and larger multifamily conversions. We've done development projects, both to sell for profit and to keep for more rental income and I would say nowadays we're basically in that small to medium-sized multifamily range. We find that's the best bang for your buck. It gives you the best of all worlds in terms of investment and ROL and that's what we continue to do. We've been developing and building our own brand new. That's where we've kind of shifted, with some of the advantages that CMHC and their programs offer.
Speaker 2:Yeah, yeah, yeah. Well, that brings us to a third question. And now let's not go back too far, maybe around three years ago, Navigating the 2022 surge in mortgage payments. There must have been a challenge, because you know you have a lot of properties. How did you adjust to those rising costs and still keep the portfolio growing?
Speaker 1:Yeah, three things really. And at the same time as this happened for me, it's happening to all the investors that I work with, I consult with coach you could say work with more than 200 investors here in ontario, you know helping them acquire, buy, sell and figure out their portfolios. So everyone was going through this at the same time, yeah. So I look directly at myself and I'm saying, okay, if I can figure this out, then I can help everybody else. I can continue to be valuable for everyone in my business. So what we did is, you know, establish or improve relationships with our current tenants. What we didn't want to happen is for them to see us as the evil landlord Right and create that rift, and just that eliminated a lot more risk of them not paying or trying to find clever ways to not pay and using the system kind of against us.
Speaker 2:Yeah.
Speaker 1:Right. So that was, I don't want to say an easy one, but an obvious one. Number two we had to sort of relook at our portfolio and go through this process of you know the same way at the end of the season, you know you're going to pick all the fruit from your fruit trees and cut off all the dead branches, right, that's what we had to do to our portfolio. We spent, you know, the better part of 15 years, basically in an acquisition phase just buy, buy, buy, buy, buy, buy, buy. It was never a reason to sell unless you were selling to go get something bigger.
Speaker 2:Yeah.
Speaker 1:Excuse me, but in this stage I mean for for myself and many other investors we had we've had accumulated so much equity we got to relook at the portfolio and say where are the spots or the properties that are doing the best and which ones are not performing anymore. So we went through that process and decided to sell a few properties Some we refinanced and able to put cash on the table and get rid of some properties that were just not cash flowing enough to manage the higher interest bills. And the third thing we did was of the properties we were keeping, which of those properties could we improve to dramatically increase income? Which properties could I add a basement apartment? Which properties could I build a what do you call it a garden suite? Which properties had really low paying rents, et cetera, et cetera. So those three things we did. We dramatically improved our portfolio and then used the CMXC program, which sort of came out at the same time, to continue to grow and play offense.
Speaker 2:It's all great points and sometimes, when you're pushed against a wall, it forces you to reevaluate. It forces you to get out of the comfort zone of having your portfolio the way it is, and sometimes we need to reevaluate what we're doing with our properties. That's right. That's right. Fourth question talking about a lot of properties, you've amassed $45 million in assets. What strategies did you attribute to achieving such an impressive growth and a relatively short amount of time? We're talking about 10-ish years, 10, 12 years.
Speaker 1:Yeah, I would say about 15 to be fair. But yeah, at its peak it was close to $45 million worth of assets. Some of those assets were land assets that had grown significant value, especially if you're under developing projects. As you're developing and getting to the point of completion, your asset values go really high If you sell them the asset of asset, the books, right. So it's sort of a fluctuating number, but that was our peak, let's say, and it's really just doing what works. How we got there is just to do what works and not be distracted by shiny objects, right, you know it's okay to speculate. You know, for example, we I never really got involved here in, especially the greater toronto area, in the whole condo thing you know, buy it from reconstruction, sell it later and yeah and I'm not judging.
Speaker 1:I know a lot of guys who made money. Uh, I was in gals who made money and you know some people now are losing money. So it's a very speculative game and, although it's profitable if you do it right, it didn't fit my ROL calculation. I can make money, but it doesn't help me achieve the goals what kind of goals I wanted to achieve. So we found what worked and we just put it on repeat and, in order to increase the results, we just did what we did, but did it bigger instead of one unit, two units instead of two, four instead of four, eight or 10 or 12. And now we're building, you know, nine and 10 and 12 units from scratch.
Speaker 2:Right, so yeah, so you know, like you said, there's a lot of shiny objects out there, different strategies that sometimes are good for a short amount of time and you can make money or you can lose money. But using the strategies that have been working for a long period of time, like multifamily, this, it might be a more stable route to choose.
Speaker 1:Yeah, I, I, I agree, I agree. I think those who are maybe attracted to the shiny object, they, they see real estate as like a a get in, make my money and get out, kind of you know, venture, you know, whereas me and I guess the clients that I coach you know we see it as building a portfolio that continues to have an impact on your lifestyle for basically forever.
Speaker 2:Yeah.
Speaker 1:Right. So very different point of view, I think.
Speaker 2:Brings us to our final and last question for today. Paul, I want to go back to the beginning with your unique background. You used to be a fireman. You went to get your realtor license. What advice would you give to anyone looking to transition from a stable job to real estate investing, especially in today's market?
Speaker 1:Like transition to full-time real estate investing. Yeah Well, I would say, don't do it. I would say, start like I did and you're going to have to part-time it. It's got to be your side gig for a while, unless you've got a few million dollars to start with. But for us, regular folks who are grinding and have one or two down payments on this, it's definitely a start. It's a get-rich-slow kind of game. You're basically playing Monopoly. You don't win Monopoly until you go around the board 40, 50 times.
Speaker 2:Yeah.
Speaker 1:Right, play monopoly. You don't win monopoly until you go around the board 40, 50 times. Yeah, yeah, right, so, um, that's what I would recommend is start slow, get one property, do it right and then try and find ways to repeat that. I find a lot of people who are trying to go, trying to start and, and and that's their end goal, like I hate my job, I want to quit. Five years. It's impossible for them to fathom, to see in reality how it is. They can do that in five to seven years, but that just creates confusion in your mind. I'm a big believer in you know, for lack of a better term called law of attraction, and you know, if you're constantly confused and if you're constantly looking at five years from now and saying, how the hell am I going to do that, like that's what you're putting out to the universe and that's what you're going to get back just a lot more confusion.
Speaker 1:So I tell people, just do one property and do it right, then let's solve the next problem, then we'll solve the next problem, then we the next problem, then we'll solve the next problem, then we'll solve the next problem. There's nothing wrong with having long-term goals, but you got to get there one step at a time and markets change. Whatever you plan for now, I mean three years you know, having a very clear definition of how you want your portfolio to benefit you personally is really important. You know I want 10 properties so I can retire is not enough. You know, and I'll give you a try and make it a fast example.
Speaker 1:I worked with clients, you know, immigrants to Canada.
Speaker 1:They were a Filipino couple and when I met with them the first time, you know I typically ask them you know why you want to invest in real estate and after several times of digging through it, you know the real thing on their heart was they wanted to help their parents pay off their mortgage here in Canada because they were grateful.
Speaker 1:Help their parents pay off their mortgage here in canada, because they were grateful to their parents for coming to canada working like low-paying jobs and working their tails off to give these kids an opportunity to go to university and get good jobs and all they wanted to do was help their parents pay off their mortgage and I was like that's it right and and having that close to their heart really motivated them to get results and they were able to do it.
Speaker 1:So something of that nature has to be close to you and it helps you get over all the difficulties and stress the nonsense, the things you can't predict the toilets and the tenants, and you know everything else. So, one property at a time start slow, make it part-time, have a goal that's close to your heart and, lastly, you're going to have to surround yourself with people that know what they're doing and who've been there before. I know it's totally cliche, but I mean, if everybody around you has one or two properties and doesn't have what you want, then you're not going to go anywhere very quickly. I have my own coaches and I bet you do too.
Speaker 2:That's what I was going to ask you, If you didn't bring it up. I was going to ask you how important it is to ask for help if you're just getting started, or ask for coaching. How is that important for somebody to do real estate full-time?
Speaker 1:I think it makes or breaks people. I mean, my cheesy line is there's no I in real estate, right? You literally can't spell the word real estate with the letter I. Like it's a team sport, like you can't do it by yourself, no matter how much you try, right? And I'm not saying you need a partner, you know, as in someone who's working with you every day, but it's, you know, real estate masterminds, real estate groups. You know networks are really important. There's going to be people of various, you know, experience levels and if you can get involved in these groups on a monthly basis, you're going to be learning from people who are way ahead of you and they're going to cut your learning curve. And you might want to make friends with some of these people also. Buy them a coffee, buy them lunch, talk to them, and I think that kind of exposure is 110% necessary. You're not going to get very far on your own.
Speaker 2:Paul, it was a pleasure to have you on the show today. Lots of knowledge, great points. I hope that all of our listeners take a piece of your advice and knowledge on their journey and hopefully we'll run into each other soon again and maybe record another podcast.
Speaker 1:Yeah, absolutely, mario. Thanks for having me. I appreciate it If anybody wants to. I wrote a book recently. If anybody wants to download my book, you can get it at expertinvestoracademycom forward slash playbook. It just talks about the Canadian real estate market and how you should navigate the current economics we're going through and what you think might work. So it might be valuable to your readers.
Speaker 2:We'll make sure to put the link in the description. Yes, sir, thanks, mary. All right, we'll talk soon, bye-bye. Thanks for tuning into the 5 Questions Podcast. If you enjoyed today's episode, don't forget to subscribe, like and hit the notification bell on our YouTube channel so you never miss an episode. Stay tuned for more insights and tips to transform your real estate and business game. See you next time.