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NICK GROMICKO TALKS BUSINESS, MAKING MONEY, AND WHY HIRE MORE EMPLOYEES

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PODCAST TRANSCRIPT:

Ian R: Welcome back to inspector toolbelt. Talk for part two of our interview with Nick Gromicko. In this part, Nick is going to talk about some very inspection-specific things that we can all use, and also some ways that we can advance our business. So if you’re listening to this and not watching the video recording, you can’t see all the keys behind Nick. He has a key for about every aspect of his construction operation. I’m guessing there’s, I don’t know, 150 keys back there or something?

Nick Gromicko: A lot of keys? Yeah, they’re out today because they’re doing things. So the reason I do it is, first of all, I can see you took them? Because if you can see. That is a camera. Yeah. Cameras aimed at the keys. Okay, so by looking at that camera, I can see who’s doing what, where, by what equipment they took, and what keys are missing, I can tell you what my guys are doing today. So just looking at what’s going on.

Ian R: That’s a that’s a lot of keys to keep track of. So I’m glad you had the camera on because you can never really, I can’t imagine how you keep track of all of them. Nick, we’re going to venture outside of the home inspection industry a little bit today, we’re going to dive into the home inspection industry, and then out because we set out there on social media questions that guys want to know about you. You also presented some interesting things about yourself that I think some guys out there would like to know. So I wanted to hit you with some questions. This one’s kind of a big spatial one.

Nick Gromicko: I didn’t I didn’t read them so maybe the podcasts will sound better.

Ian R: Oh, yeah. No, I love it. Ad Lib ad hoc. Yeah, on the fly. Let’s do that. So this is a lot of the questions kind of came down to this. What are your tips for becoming a millionaire or general investing tips we’ll have to add a little disclaimer, Inspector toolbelt, we don’t endorse any tips and tricks, always check with a financial advisor, blah, blah, blah. Nick, you always have given advice online and some of it is, is pretty fantastic and spot on. You seem to kind of know when dips happen in the market.

Ian R: Yeah, so you say there are two questions that have nothing to do with each other. You don’t make money by investing in my opinion. I mean, the best you could do is to preserve wealth or a little bit better. I didn’t make any money by investing. Not a penny. Investing is what you do after you make the money. You have to put it somewhere, right? You can’t leave it in cash, especially today with something like 16% inflation, right? You definitely five years old, half your money’s gone to work all your life for a million dollars and losing in five years to currency debasement?

Ian R: Yeah, that’s kind of a sad situation. So I guess maybe the first part of that question that guys asked, “What are your tips for becoming a millionaire?” is maybe not as important of a question as we might think because if we become a millionaire today, and in five years, we don’t do anything with it, you have less money?

Nick Gromicko: Well, I would say, you know, I was never good at school. I’m a high school dropout but I was always a good copier. So if you look at the really rich people in the world, I would say Bill Gates, maybe Jeff Bezos, the Walton family, or Elon Musk or somebody? What do they all have in common? It’s so simple that no one can answer the question. I don’t think I could. They all have a lot of employees. I don’t unless you are born with some freak talents like you can have you have olive oil voice and you can quote the Godfather and you can sing like Frank Sinatra or you can hit a baseball out of the park or something. So unless you have some freak talent, some freak physical talent. I don’t think there’s much of a chance of getting becoming a millionaire without employees. There will segue from what we were just talking about these keys trying to keep track of who’s on what.

Ian R: Yeah, and so like, that ties in with what we were talking about before we started the podcast here are you work on things in your construction company that make you a lot of money because you have a lot of employees and you put the pieces together for people. You kind of people say hey, we need this bill and you’re like, Okay, I have welders, I have excavators I have framers like we can do a metal roof, you become a one-stop shop. It’s something that number one, nobody really wants to do. Number two is something that is hard to do. Those are two things that seem to be moneymakers.

Nick Gromicko: I like businesses that have a lot of crazy components because that’s where the money is. So not to build a small bridge You have to have excavators, you have to have surveyors, you have to have concrete people, you have to have welders, and you have to have an engineer, and to put those all together to build this product to install it. So because it has all those components that have to work together, you can charge a lot for it. Whereas the welder can only charge so much for welding the bridge together, and the concrete guy can only charge so much for putting the concrete in place. The excavator can only charge so much but if you’re putting them all together with an engineer, you know, as one big complicated product takes a lot of components and systems and people, then your margins go through the roof. So I like businesses like that.

Ian R: Yeah, I think that’s a good point. I’ve always said that, in my area. Anyways, the average plumber is going to make anywhere from 75 to $125 an hour, because he’s doing a lot of things that, you know, he has to coordinate and know-how to all these pieces go together on a much smaller scale than what you’re talking about but he’s also doing something that people really don’t want to do. Whereas the average attorney doesn’t make anywhere near what the average plumber makes. I inspected a plumbers house one time and I was just walking around wide-eyed, I’m like holy cow, this is the biggest house on the street.

Nick Gromicko: Every plumber I know has five quarterbacks in the garage.

Ian R: Okay, so the secret to becoming a millionaire is becoming a plumber. Now, that’s interesting. So having more employees and being able to accomplish bigger projects, would you say that is one of your tips for becoming a millionaire?

Nick Gromicko: I don’t know about the bigger projects, but you need to have employees, there’s only so much money you can make with your own two hands. Just kind of the reason I recently wrote Scale Up, inspectors,

Ian R: We’ll put a link to where you can get scale up in a transcript of this podcast because it is a good book. So say, now you’ve made your money. So I’ll be honest about this. I’m a terrible investor. I’ve always been good at making money. My brother’s a CPA, and he’s very good at investing. I remember many, many years ago when I first started doing well in business. My brother said, hey, well, so what are you doing with your money when you’re done? I looked at him all confused. So I bought out this big jar. And I’m like, this is where I keep it. He’s like, and he laughed, he goes, Oh, crud, are you serious? So say you’re like me, and you kind of dumb it down for me. I’ve just done better. My brothers helped me quite a bit. You know, what can we do after we’ve made that money to invest it? So you said you’ve never invested money to make money, but how can we keep it from deflating.

Nick Gromicko: I mean, that’s the sad part about it because the natural state of prices is to go down. The only reason prices go up is because we have a federal reserve that just keeps inflating the money supply. What that does is it forces us savers, to have to go take risks with our money because if we leave it alone, it just all gets eaten up with the debasement of the currency, right? The purchasing power of the US dollar has lost about 99% of its purchasing power and 100 years. So what you could buy with $1 100 years ago, now takes $100. So there are some people who don’t think that the currency is going down, it’s already lost 99% of its purchasing power, it’s gonna lose the rest of it, and it’s gone to zero. All fiat currencies go to zero. So if you’re saving your money in a jar, and Fiat, or in a bank, in a savings account, you’re losing at least 10% Every year, recently, probably more. So that forces you to take that money out and do something with it. Nowadays, I’m trying to answer your questions considering what’s going on currently. Nowadays, I think the best place to do that is to buy things that benefit from inflation. So that would be hard assets. That would be, I would say, real estate would be the number one, then businesses intellectual property, gold, silver, antiques, paintings, anything you can put your hands on, that would be worth more later. It’s tough right now because we’re all being forced to do that. So there’s a lot of competition, right? People buy homes just for investments, not just because they want to live there. Yeah. So that puts the price of everything. Everything’s going up but if you could, you know, buy those things that will benefit from inflation. Warren Buffett sure loves inflation. I mean, if his railroad goes up in value, you know, in terms of dollars, it doubles, and the price of milk and bread doubles on him. He’s still pretty happy. That’s why basically why the rich are getting richer and the poor are getting poorer. So inflation is a transfer of wealth from the poor to the rich. The poor, under inflation, have to pay more for gas and they make posts on Facebook saying I’m paying $5 for gas, right and the rich are looking at their farmland and saying my million dollar farm was now worth $2 million. The gas and the farm both doubled because of inflation. One person is happy about it, another person isn’t. You don’t want to get caught on the poor side of inflation and want to have assets that benefit from inflation. So I would invest there.

Ian R: Do you think that inflation is almost purposeful because so when you have inflation and you have debt, your debt becomes less debt because now I’m paying off that debt that that with $1, that’s worthless. So I still owe $100 of debt. But now my dollar is only worth 80 cents, and I still pay off that dollar.

Nick Gromicko: It’s admittedly purposeful. The Federal Reserve admits they tried to create inflation every year. In fact, they consider one of their two mandates, to create inflation, absolutely them everything would be all prices, we didn’t have inflation for 150 years in this country. Prices were about the same, about a little bit, but they stayed about the same. So savings, you could save money in a jar, and have the same purchasing power 20 years later, but that’s not true anymore. Right. Now, the Federal Reserve is trying to just keep printing and printing and printing

Ian R: To pay off their own debt, partly,

Nick Gromicko: Obviously to cover government spending, right, so the government spends way too much they attack countries that never did us any harm, and spend trillions there and stay there for 20 years, and then leave, that cost a lot of money. That’s a cost of government that has to be paid more, unfortunately, taxes are only paid for about half of government, somebody has to pay that other half. So they go to the Federal Reserve, and the Federal Reserve has no money. It doesn’t make dishwashers, refrigerators, cars, or anything itself. It just has a printer. So it prints that money and gives it to the government, which becomes a tax on all of us. So inflation is a tax on everybody.

Ian R: So I’m liking this conversation because it makes a lot of sense. So I think about that first question that one of the inspectors put on Facebook tips for becoming a millionaire? I think that is a special question. But you answered it pretty specifically, we can’t do it with our own two hands. I mean, maybe if we have a talent, or if we work like animals, but eventually, we’re going to need to grow our business to make that money.

Nick Gromicko: Brain surgery, one of the best brain surgeons in the country, you probably pull them down a half a million a year, you could become a millionaire. But yeah, that’s not me. Right.

Ian R: But then on top of that, even if you have that million dollars, you spent 20 years doing it, and million dollars is worth a lot less than it was 20 years ago when we started making it.

Nick Gromicko: That’s a is a problem that all I would say poor people have. You know, even almost everybody, which is that they look at things in terms of dollars. That’s a problem. Yeah. So have to look at everything in terms of purchasing power. So what if I sold that, what can I buy with it? Or what could this money buy me? Purchasing Power is everything. The dollar loses its purchasing power every year. More and more and more of it. So we may not know, today, you know, podcasts what to do with money. We know what not to do with it. What not to do with it as a habit.

Ian R: Yeah. And you know, that’s interesting that my brother and you know, one of my best friends is an EA who owns a tax firm. They often say that to that you don’t want to just have money. I guess that’s why that’s a special question. Can we measure that we’re a millionaire by counting our dollars? If we can, we’re losing money. So we need to, as you said, put it into something that’s a hard asset. I liked how you mentioned gold, gold can be risky at times from what I understand. You said something that you can physically put your hands on. I remember you one time saying not to buy gold, that’s a number, a digit, you know, on a computer screen, but actual physical gold, physical assets. Do you still hold by that or not?

Nick Gromicko: I mean, gold isn’t a class by itself, because it has other advantages. Other than just storing wealth, and it stores wealth over the long term, it’s not going to store maybe this year or next year. So if inflation is 15%, doesn’t mean gold goes up 15%. Over 100 years, certainly over a couple of 1000 years. It’s held its value. The reason I like gold is it has other properties, which no investment has, which is, first of all, it’s anonymous. So no one knows how much gold I have, in fact, I don’t. No one knows where it is. In fact, I don’t. I mean, I’ve probably put gold in places where I’ve forgotten where it is. I mean, it can’t be taken from me because it’s too small and it’s there’s no paper trail to gold, physical gold can be moved around and you can take it on a plane you can move it from state to state, you can move from hole to hole in the ground. You have this anonymity. The other advantage is that it’s fungible, it’s good everywhere in the world. So if I had if I have gold in the United States, and I fly to anywhere on this planet earth, that gold has value. It also has it’s one of the few things that as a constant, that it’s priced globally. So if I fly to Saudi Arabia tonight with all my gold, the price of it in Saudi Arabia is the same price that I would get from the same purchasing power that I would get in the United States or in Bangladesh, or, you know, in Hawaii, on a boat in the middle of the ocean. It’s a constant worldwide fixed price every day. So I liked those properties a lot. I also like that there’s numismatic value, and there are a lot of collectors who like gold, right? They like to save gold coins. I like that it’s a monetary instrument. I like that the Constitution considers that money is along with silver. I like that. Central banks around the world don’t store diamonds, they store gold. You know, all banks are storing gold. I’m not gonna buck the trend. I’m going to be not only my own bank in my life, but I’m also going to be my own central bank.

Ian R: I think your new byline on the InterNACHI website is there. Nick should say, I don’t know how much money I have, but I know how many pounds of money I have.

Nick Gromicko: There’s so much truth to that. I mean, you know, there’s so much truth to that, because ultimately, everything on a big scale is priced in gold. I mean, just look at what Putin did. Right? He ended up getting everybody mad at him in the world. Right. They had all sorts of sanctions and the ruble crashed, right. He merely suggested that he was going to peg the ruble to the price of gold, and went up five times, it’s not the world’s strongest currency. It was just the suggestion that he’s pegging rubles to gold. So, you know, ultimately, China is going to come up with a gold-backed currency. That’ll be it for the US. dominance as the world reserve currency. I mean, people aren’t going to take the resources out of the ground, manufacture them into a product, add labor to that, and ship them all the way to the United States, so that we can enjoy those products, in return for little pieces of paper with faces on them, they’re just not going to do it anymore. They’re just not that stupid. I’m surprised that they’ve been that stupid, that’s long. Sooner or later, they’re just going to say, you know, we don’t want the little pieces of paper anymore. Now. The world means a dollar deal to settle a lot of things. Settle a lot of cons because there’s no alternative but it appears to me that this Ukraine crisis has shown other countries that there is a possibility of a new world currency that everyone who looks at it it’s backed by gold, you know, that might happen in my lifetime? I don’t know.

Ian R: Gold was the currency of the world for, you know, 6000 years?

Nick Gromicko: Well, it still is, like I said, the central banks still have vaults full of gold, not paper currency, you know, not dollars, not. Not silver takes too much space. I mean, they store everything in gold.

Ian R: What other kinds of physical assets though, do you think? So you mentioned land and real estate, and you mentioned antiques. So for a guy like me, I know very little about antiques, but I know a lot about real estate.

Nick Gromicko: So real estate’s a really good one, because first of all, you get some advantages, you get depreciation, of course, right? Then you get to deduct the repairs that you’re making on it, which are kind of improvements, right? Immediately, usually can pull those off immediately. The appreciation that it’s enjoying is an unrealized gain. So it’s not taxed, although Biden’s trying to tax unrealized gains. So, therefore, if you’re deferring taxes on it as a piece of property goes up in value, you’re not paying taxes on that increase to your salary. Right? We kind of know that real estate keeps going up, because the Federal Reserve, as we said earlier, has the mandate to create inflation. So that causes hard assets to increase in value, right? So we have that going for us. Then that pays a dividend every month, if you rent it out, you know, so every month, you get a rent check. So all in all, it’s a pretty good deal. I mean, most millionaires in the United States made it through real estate.

Ian R: Trump. You know, Warren Buffett and all of them.

Nick Gromicko: I mean, pick on Trump on every debate about him doing this, but like, he certainly didn’t like the rules. A piece of property goes down in value on paper and up in value. In actuality, that’s a pretty good gig.

Ian R: Well, and that’s why Wall Street right now they’ve been I say, caught they’ve totally gone. No Wall Street’s buying up single-family homes across the country. It’s like, yeah, it’s a safe asset, even at inflated prices. Right now. It’s so yeah, I mean, it is what it is. I mean we could take advantage of that if we have money as we’re making it in our business. We can invest in real estate. You said something one time about buying land in the way of progress. So if we see an area that’s like, oh, this could kind of go very well.

Nick Gromicko: Oh well everybody said that? Oh, I just remember you brought it up in a discussion myself.

Ian Robertson: I mean, that’s how the people made millions.

Nick Gromicko: The latest chip moved, actually. So Steve Wynn from Pittsburgh, my hometown, went on and bought land, you know, on the edge of town and over time moved the strip to a different location, move the center of Vegas to a different location. You know, COVID, and this conspiracy, that they want to depopulate the world, some might change that, I don’t know. I mean, we could have had a plague that killed 100 million people or a billion people. If we had that, then the real estate wouldn’t have been much of an investment, you wouldn’t have needed all that farmland and all that housing, right. So there are always risks to stuff. There’s always a Black Swan. So you know, had COVID killed a billion people, pretty sure real estate would not be a good buy.

Ian R: Yeah. So basically, what you’re saying is there’s a risk in any investment but in your opinion, what you do is real estate, and gold and things like that physical assets are what to invest in.

Nick Gromicko: Businesses that can work, couldn’t walk them, I can get, get them going and make money off of them. It’s hard to get somebody out. You know, I own three homes, I bought three homes off of Lamar. Lamar built that plan down the street from me, the streets aren’t connected yet, they’re blocked by a blockade, eventually, open them up to where my house is, but I bought three humps from them at 504 to 520 each. If I bought three that sell them at that price, and before had closed on the last one, the homes in that plan were signed for 636. So I’d made four and 50 grand, or something like that by doing nothing, really. I was just trying to protect myself from inflation, and it worked. When you think about it, you can’t really rent these things very much. By the time you pay your taxes and your repairs, and your insurance, you know, the half-million-dollar assets sitting there making a few 1000 a month. It’s tough, you know, but um, the money has to go somewhere. So everything’s gone up in price, all this money that’s floating around the planet, we’re swimming in a planet of oil, in a planet of fiat currency. Those are the two things this planet is known for. If you were Martian flying by this planet earth, you would say last just a planet full of oil and full of fiat currency, full of it. So we have all the oil in the world that we could ever want. We have all a fiat currency. And that currency has to go somewhere, can’t just sit, it has to invest in companies that don’t make money.

Ian R: So sticking with it and we’re going to break this probably into a two-part interview because we have a lot of financial questions that came up for you on the forums there. So we’re going to ask a couple more of these financial ones. You talked about owning businesses. So I’m that way I own several businesses. I like to run an operation where I don’t have to be there. To me, that’s key. I want to build a business where I’m not the central figure and where somebody else can run it eventually. Or I could sell it and I don’t need to be there. What do you think is a good side business? Do you think my idea of how I go about it is how you go about it? Can you talk a little bit about that point? Like what do you mean by owning businesses to protect your assets?

Nick Gromicko: So business has a couple of advantages on like, another investment if I go into the stock market, and I invest in a company, I have to hope and pray that the people running it are doing a good job, right. Whereas if I own the business myself, then I like how I run businesses that are profitable. I have a long track record of running and creating and running a profitable company. So I have that advantage that I know for sure that it isn’t being run by someone who’s terribly foolish. So I prefer to have my own business. Rather than investing outside investing in another man’s businesses like giving him a kiss, amounting to kiss him, man, I don’t like it. In a way, you have to like you have to be you have to really like the guy who’s running that company so much, right? I mean, you’ve given them money, my goodness. Now, it’s very I think it’s very intimate to take you to know, your family’s money that you worked hard for and entrust it with another man. I mean, that’s, that’s, I don’t see much difference between that and kissing. I mean, it’s kind of a thing and I’m not sure I want to be that intimate with other men. Alright, I prefer to keep my money myself and invested the way I want to do it in my own companies, if I have a choice,

Ian R: I get that, too, I’m the same way I don’t, I do invest, but, it is uncomfortable for me because I’m like, can I take this money and make more than myself? So what kind of companies?

Nick Gromicko: I mean, that’s just always yes. Yeah, totally. They’re not giving you your share? Yeah, give me your share, that that’d be in real trouble, right? They’re just giving you a piece of your share. So the answer is yes, you can always do better yourself. I was a little lady maybe, you know, retired, and then maybe my thinking would change, I would find some owner of a company that I trusted and liked to get some, and give them my money, and hope he returns it. Then some, that’s I want to ask, I think, you know, it’s a lot to ask for me, I’m not gonna do that I’m not going to be that close to any man to give him all my money and hope that he’s running his business, and gives me a piece of it back.

Ian R: so what businesses do you suggest the average home inspector listens to and gets into? Like, what are some good businesses for them to start besides home inspections?

Nick Gromicko: Oh, there’s so many, there’s just so many. I mean, I’ve been like a warehouse full of businesses on the shelf, like the kind of businesses I’ve always wanted to start and just couldn’t I mean, it all depends on it. Maybe you could have me maybe just make a hypothetical homeless veteran, how much they have to invest in the second business, alright, and what they might want to consider maybe, with an example.

Ian R: So let’s say I’m a single operator, Inspector, I make 70 grand a year, I have 20 grand in my savings, and I’m skilled in the trades, technically, on paper, that is the average home inspector. If you look on average is what a single inspector firm is. So if I have 20, grand, and a lot of construction skills, what’s a good business that I could start?

Nick Gromicko: Well, I like side businesses where I can control how much work I get so that I can go out and see and procure jobs. So, you know, hypothetical, you said 20, grand and savings, or depending on where they are. Geographically, I guess I would buy a stump grinder. There you go. So I would buy a stump grinder. As I drove around doing home inspections, I would take note of the address of any yard that had a stump, Have you ever seen these YouTube videos whose people trying to pull stumps out of the yard, or ATVs, or pickup trucks, and destroying themselves and stuff. People want those stumps out of there, especially if a tree guys come along, cut down four or five of them, and not even that big, they’re, you know, they’re just trip hazards and everything. So, a stump grinder is one of these capital investments that most people aren’t going to buy. So people have snowblowers and a garage, right. People have lawn mowers and other raunch. They do both of those tasks, right. I mean, you think you think about all your neighbors, none of them has a stump grinder, no garage. So it’s a good business. So you the capital, the outlay is high, which is good, right? I know what they cost 10, grand, 15 grand, I don’t know what they are, they’re a big wheel with the teeth, and you know, you’re moving back and forth over the stump and it disappears. It’s quick to have, I’ve used them. I would go around the neighborhood On slow days, you know, or, or when I’m doing inspections, or in between, them or my family members make note of it to anybody. If you see a tree coming down, or anybody with a stump in the yard, send me the address.

Ian Robertson: Get to know some landscapers.

Nick Gromicko: I’ll send them a flower, I’ll stop by, you know, with my stump grinder. Usually, if you do one, you know, there are others in the neighborhood that need it done. It’s good money. It’s good money because they’re paying for the machine. The machine only takes five minutes to get rid of a stump, really. So you can get a few $100 there. That’s excellent money, in my opinion. It’s part-time work. So you can do it when you want. It’s also you can control the amount of work you’re getting, like, if you wanted more work, you could just keep going and finding more reliable stumps and sending literature or asking them to go and ask them if you want it if they want it done. So I like that business. That would be an example of a business I would say if the home inspector making 70,000 was $20,000 to invest might want to do.

Ian R: So let me give you another scenario then. So say this imaginary inspector multi-inspector firm has five or six inspectors, he does mostly administrative stuff. He makes about 300 grand or so a year and has half a million dollars in savings. What kind of business can that kind of inspector look into doing? Well?

Nick Gromicko: I would say he should get out of the inspection business. Not out of it altogether. I wouldn’t put the 500,000 and grow the inspection business any bigger because five inspectors generally you’re talking about dominating a market is within driving distance for most towns. I mean, unless you’re in a big city like San Diego or something where they need a lot of those guys, right? In most towns, if you have a multi-inspector firm, you can get the lion’s share of that and dominate that time with five inspectors to go to 25 inspectors now you’re going to have to spread out further and harder. So you want to run businesses, sort of like price pointing a product, you don’t want to too big or too little, you want to get to that great zone where it’s profitable. Sometimes, you know, being bigger or being smaller, makes it less profitable. So you want to price point in there, five inspections, six inspectors, I’d leave that alone, something completely different. Maybe if I don’t know what, where you are, but like in some areas where the seasons change, you know, inspections, demand changes drastically. Maybe you want to offset it with something else. Something that’s done in the winter or something, I started a company once called plow list. So I made up, you know, a list of people could go on, and they could say how many inches, if it snows X amount of inches, there are credit cards already installed. Hunters plow their driveways. So you know, I even found the type of plow that has wings on it so they can go up. But as downward pressure, most plants don’t have downward pressure, just the way to plow rooks on this one, that hydraulic downward pressure, the wings open up and he pulls backward. So we’ll have to turn around and go into the driveway, drop the plow, open the wings, and drive back. That’s really quick. They would get on this list. And this was years ago, and I announced that as a playlist, get on the plow list, right? Somehow someone heard about it. Then my own wife heard about it, said, Hey, you know, we can get on this plow list, and just started. I said, Well, you put your credit card in, you tell them how many inches on your driveway, you’ll put up with it, it’s three inches, then they’ll come. If it snows three inches, they’ll come and plow it. No, they’ll bring their credit card. So that sounds like a pretty good idea, you know. Then I heard her tell her neighbor about it and that they should get on the Plowist. Then I realized I got to take this thing down there was just I just put the company up to see if it would work and actually want to plow driveways. That’s interesting. I would do something like that. I would try something that you can provide a service to your neighbors, you probably already have a good reputation as a home inspector. Maybe a second thing, if you have no money, maybe window washing, that’s low capital right now? Yeah. Where I live in Colorado, Frederick, Colorado. I mean, the windows are just constantly dusty because we live out on the plains. A lot of that blows around not much moisture, there are so many good businesses, you know?

Ian R: Yeah. It’s an investment. As you said, there’s a home inspector that I know who started a soft roof washing business on the side. Yeah. He built it up. He got a bunch of regular clients in a very wealthy area in my area. Here. I live in upstate New York. It just kind of blew up and he sold it. So basically, he invested the cost of a truck and some equipment at about 50 grand. He hired a guy and he had, you know, a couple of months, we’re just getting started but eventually, it paid for itself. Then three years later, he was making money off of it and then sold it. And now he took that 50 grand and turned it into several $100,000 With relatively minimal effort, besides just saying, hey, how do I keep this going?

Nick Gromicko: It doesn’t take a genius to look at me just like a genius, to come up with businesses that are very profitable. And then people want to buy them off of you know,

Ian R: and anything with recurring income, like pest control operators, they have recurring income, anything where people need you back every year water treatment systems. I know a home inspector that dropped his whole home inspection business because his water treatment system was blowing up. He’d have, you know, the first year or two of getting a couple of recurring clients, then all sudden is blowing up and he couldn’t keep up with it.

Nick Gromicko: That’s the sad part about home inspectors is that our clients don’t buy houses every month, right? Yeah, exactly. Seven and 10 years or something. So but you know, if you provide a good service and a good person, and then it’s two agreements to have a customer base, in anything you do, and so I like businesses that have a customer base, of course, you know, if if you’re the opposite, if you’re not very good at providing good service and you know, terrible customer service and you’re not a very good guy, then maybe your customer base is not to your advantage, but it is to mine. So it’s you know, same with InterNACHI. Right? I mean, I didn’t end up with 30,000 inspectors because I did them wrong. So that’s reoccurring, right. So similar business, plow list was one.

Ian R: So, anything that speaks to our strength is a good side business. We mentioned a few I loved your stump grinder idea. I hadn’t thought about that. It’s actually kind of hard to find the stump grinder in the area, which is in my area anyway.

Nick Gromicko: It’s one of those things that when we go up to the door, you see a person washing the car and the dry when you ask them if they want their stump out of there. They’re like, Heck yeah, I do. Yeah. It’s just one of those things that they can’t stand that stump. That’s easy for you to do you just roll it off the flatbed, drive it over, you know, self propels over to this number, just tear it all up.

Ian R: Yeah. We already know real estate agents, a lot of times agents are telling people as they’re listing their house, that they need to get rid of the stumps. I know a guy. Yeah, we’re getting neck, it’ll come and grind your stump right out of the ground.

Nick Gromicko: It goes fast. I’m, you know, I’ll use them, they go really fast and go back and forth and stick them out.

Ian R: So we have one more financial-related question. Maybe it’s not necessarily a financial question. Then we have some other ones that are more specific than some inspectors asked. One inspector asked, Do you think that this real estate market is another 2008 situation? What are your thoughts on that?

Nick Gromicko: No

Ian R: Yeah, why do you think that?

Nick Gromicko: So negative? I don’t know why I don’t think it is it’s just that history repeats itself, or it rhymes or something like that. It’s everything’s different.

Ian R: Yeah, we don’t have subprime mortgages as we did before. Well, I take that back. They do have a certain level of subprime mortgages. They’re doing those interest rate things.

Nick Gromicko: What’s gonna cause people to default. This is a mortgage, it’s inflation. So it just picks away at you on all sides, from the middle class on down, you know. From the gas, that they just filled the tank up with the coffee they’re drinking to electricity in our home or rent. I mean, everything’s going up. It’s going up relative to income, which means a cash crunch.

Ian R: So you don’t think there’s going to be another housing crash? I’ll be perfectly frank, I did really well, on the last housing crash.

Nick Gromicko: Defaults. Oh, yeah. Those people just don’t have the money.

Ian R: Yeah. But what I mean by I did well, on the last housing crash was half my competition disappeared. We had over 400 inspectors in my area. I lost about 40% of my competition. So a couple of years later, when I started to do better, I had more work than I could handle but at the same time, it hurts, it’s a hard time to go through.

Nick Gromicko: Well, I mean, our industry doesn’t care whether prices go up or down. It only cares about transactions, exactly. Most transactions are occurring because of a bad economy because people have to move for a job or they have to downsize or are empty nesters or they’re defaulting and investors are buying them. Then they’re flipping them, whatever is causing whatever bad is causing transaction transactions to go up to increase is good for us, unfortunately, yeah.

Ian R: This is why the pandemic 2020 was one of the banner years of the home inspection industry, people moving out of cities,

Nick Gromicko: Disruption helps us because we have to inspect a lot for everybody over and over and over again.

Ian R: It’s a sad situation, but it’s true, but you don’t think there’s going to be another crash where there are all these foreclosures everywhere. You know, the housing market doesn’t move,

Nick Gromicko: I think that people aren’t gonna pay the mortgage. If you look at what happened during COVID, people don’t have to pay even enough to pay rent. So if something were to occur again, where the government says, Okay, you’re gonna not have to pay your rent for a year, I think the investors are gonna be in trouble. You know, you can’t squeeze blood out of a turnip. If it gets to the point where inflation just chews up a family’s budget so much that they just don’t have, they simply don’t have the money to pay their mortgage because if they did, their kids wouldn’t eat, they’re not paying their mortgage. Then, you know, it starts all over again. Right.

Ian R: so do you think it has the potential to be a 2008 situation, but for different reasons?

Nick Gromicko: No, I think the government is gonna come in and tell them that you don’t have to pay their mortgage, look how the government is now looking at how socialist we’ve become, in the past 10 years, I mean, you know, people aren’t paying their school loans. People are just expecting a lot of money when COVID hit, and they got it, we got it. All our money is just so used to printing it now that they handed out willy-nilly. I think if there’s any kind of problem, do that. I think there are a couple of states that are already paying, maybe California paying their citizens by sending their citizens checks to cover the increase in gas.

Ian R: I had heard about that. Yeah.

Nick Gromicko: I mean, it’s, this is how crazy this world is becoming. So it’s different than 2008 when people really didn’t want to foreclose on their homes. I mean, historically, people did everything to hang on to their homes. Now the generation has a memory of how they were bailed out. If you bail out somebody too many times, the fear is gone. Fear was the motivator for people to just never default on their mortgages, which is why all those derivatives were sold. because you could guarantee people would, for whatever reason they would hang on to their homes, it would be devastating to lose their home. That’s not necessarily true anymore with this new generation. They don’t care about cars and they don’t care about houses that much. And I’ll let them go if they have to know how to take their money. I have an antique car next to me 30 feet away. Very few young people could even guess the decade that’s made in the real usually off by 20 or 30 years and don’t care. Hey, goober around or whatever, they don’t want to leave muscle cars, they don’t want to antique cars, they don’t care about any of that sportscards. It’s not their thing. They’re a different breed and they don’t care that much about housing. Like we all in my generation, your generation, we wanted a home, we wanted a white picket fence with a dog, we wanted the yard and all that. I’m not sure the new generation cares that much about it.

Ian R: Now, that’s an interesting perspective because as I’m looking at the date of 2008, that was 14 years ago. So it’s an entire generation. It’s people that were young and really probably didn’t understand what was going on. Now they’re adults. So it’s a completely different generation that has seen that it is a weird generational difference, I guess.

Nick Gromicko: No, they don’t care that much about it. They’re not as clingy to their home as my generation was. In my generation, the home was everything.

Ian R: Well, it’s a joke back in the early 2000s, if you didn’t have a job, you’d be living in a van down by the river. Now if you save up really hard, you can live in a van down by the river. That’s people’s goal. They want to they want different things than our generations did.

Nick Gromicko: Yeah, I mean, you know, I love my house. Just love my house. Like I like every inch of it. I built it myself took me four years. My wife is from a different generation than I am. She’s 24 years my junior. I mean, if I told her I was just gonna move to Florida tonight, and she would just pack and when shelter leaving here. The feelings about home aren’t the same. For younger people, I would say interesting. The same connection. So that might change things when it comes to times getting rough. How quickly they just walk. Quicker.

Ian R: Yeah, I think that’s an interesting perspective. It’ll be interesting to see how that plays out with a different generation that has a different perspective.

Outro: On behalf of myself, Ian, and the entire ITB team, thank you for listening to this episode of inspector toolbelt talk. We also love hearing your feedback, so please drop us a line at [email protected].

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Nick Gromicko NACHI
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