From Engineer to Buy-and-Hold Real Estate Investor with a $4 Million Portfolio
In this episode, I talked with Palak Shah, who is the founder and owner of Open Spaces Capital that generates over $1M in revenue. She brought her knowledge and 17 years of experience in building systems, processes, and scaling from her corporate career in engineering leadership to fast track her real estate investing journey. In her first two years investing full-time, she purchased, renovated, rented, and refinanced properties creating a $4M rental portfolio. It is now her passion to empower other investors to pursue entrepreneurship through real estate investing to live a financially free life without taking undue risks or over-leveraging through her coaching program at Open Spaces Women.
We began, as we often do, talking about Palak’s background and what brought her real estate investing. She worked as a mechanical engineer in the corporate world for 17 years, traveling all over the world, loving her career, but when she had kids, everything changed. She had less and less time to spend with her family as she climbed the corporate ladder, and that left her feeling resentful and wanting something more. By the time she decided to leave her corporate job, she and her husband had already invested in a couple of rental properties, and she started to get her footing as an investor with those.
I asked Palak how she transitioned from her full-time job into real estate investing. She walked through how she analyzed the feasibility of working from home while raising her kids rather than remaining in her corporate position. We talked about how vital it is to have the support of your spouse as you move into a venture, especially when investing money.
Palak discussed different investing strategies she utilizes in her real estate market of Philadelphia. She primarily employs the BRRRR (buy, rehab, rent, refinance, repeat) Method to grow both her portfolio and passive income. Palak talked about different ways she ‘supercharges’ that particular strategy.
I asked Palak if she is at all interested in other types of real estate investing such as wholesaling or flipping and she talked about how that would require her to expand her skill-set which would defeat the whole purpose of why she got into REI in the first place - to spend more time with her children. She is willing to spend money to hire a reputable wholesaler, agent, or general contractor so that she doesn’t have to spend the time learning those tasks.
Then we discussed how Palak finds her deals. She starts off by saying it does take some time and effort to build a good deal pipeline, but it begins with cultivating good relationships. She works with wholesalers and has done several deals with a realtor, but she still often finds workable deals on the MLS. We talked about how important it is in working with realtors to train them to the specifics you are looking for as an investor and how you run your numbers.
Palak then walked us through a deal she did that ended up cash-flowing $3500 per month. She says she loves the property because so many positive things came out of doing that deal, such as completely revamping the neighborhood and even helping a neighbor to start a business.
Palak said that since they figured out this super-charged BRRRR strategy she really wants to help other investors, especially dual-income families trying to raise kids. She has started a coaching program and has a new cohort beginning June 6th that you can check out by visiting https://www.openspaceswomen.com.
I hope you will join me for this terrific and super-informative interview with brilliant engineer-turned-real estate investor, Palak Shah!
Notable Quotes:
“I felt like a lie had been sold to me - you are told ‘get an education, establish your career, have kids, and everything will be fine,’ but it’s not like that because everything gets really complicated.”
- Palak Shah
“I wanted to make an impact and do something meaningful, but I wanted to do it on my own terms.”
- Palak Shah
“When it was time to figure out what I was going to do next, buy-and-hold investing seemed like the best option.”
- Palak Shah
“When we were a family with two incomes, we just thought of real estate investing as a way to park our money.”
- Palak Shah
“Working from home during the pandemic may open people’s eyes to the fact that they don’t want to go back to the corporate grind.”
- Mike Simmons
“Companies may need to take notice and be more flexible.”
- Mike Simmons
“Is this why I gave up my life, so you could grow up and eventually quit your job?”
- Palak Shah’s Mother
“It is underrated how important it is to have a spouse that supports you.”
- Mike Simmons
“When it comes to investing, that is a couple’s decision to make together.”
- Palak Shah
“You have to figure out how to meet in the middle so you can achieve the best for your family.”
- Palak Shah
“There is just so much information out there, so I wanted to make sure I learned the business properly, and once that was done, there was no stopping me.”
- Palak Shah
“The BRRRR strategy allows you to take a finite amount of funds and grow a portfolio exponentially.”
- Palak Shah
“As you get better at any strategy, you are able to have better margins.”
- Palak Shah
“My ‘why’ is to have more time with my kids.”
- Palak Shah
“Knowing what you want and going after just that - there is a lot of power there.”
- Mike Simmons
“It’s the shiny object syndrome.”
- Mike Simmons
“The key is to really know your property avatar.”
- Palak Shah
“For an investor interested in the BRRRR strategy, you need to know two things: can I cash out and can I cash flow.”
- Palak Shah
“With worst-case scenario planning, ask yourself: is that an amount of money you are comfortable losing to learn all the things you will learn from that deal.”
- Palak Shah
“I have learned a lot from deals where I lost money.”
- Mike Simmons
Links:
Level Jumping: How I Grew My Business to Over $1 Million in Profits in 12 Months
