Business & Finance, Quotable Magazine

Palak Shah and the BRRRR difference for Real Estate Investment

Palak Shah, like so many new moms, was struggling with balancing her corporate job with family time. The desire to feel empowered and spend time the way she wanted pushed her into the realm of real estate investing, where she was able to replicate her six-figure income! We got the chance to chat with Palak about her journey into real estate investing and got the scoop on some of the methods that have helped her to build her $10M real estate portfolio.

What were you doing before pursuing real estate investing? Why did you decide to leave that field?

I was a Mechanical Engineer and worked in corporate for 17 years. I climbed the corporate ladder and my job was to train CEOs of different companies all over the world on how to increase the bottom line of their factories. It was a great job and I was very well respected in my industry as a subject matter expert. For a lot of us, this is the gold standard. It all changed once my husband and I decided to have children. I found myself feeling less and less empowered as time went by. As a corporate couple with two young children, my husband and I led stressed out lives and we didn’t get to spend enough time with our young kids. Good quality childcare was very difficult to find and unreliable. At the end of the day, we realized our kids were spending the majority of their time with people who were getting paid to spend time with them. I had a visceral need as a new mother to spend time with my kids and it was not being met. I felt like a lie had been sold to me. We are told to do everything according to plan – build a career, and become financially stable before having kids. However, the higher up you climb in the corporate ladder, the less time you have for your family. I remember one instance where I had just returned to work after my maternity leave (which was a lot shorter than I had hoped) and I was on a conference call while pumping breast milk for my newborn in my office which had newspapers that covered the windows. I thought to myself, ‘Is this why I worked so hard for 17 years to build a career?’ That moment of clarity was the catalyst to a major shift in how I viewed the relationship between earning money and time.

Had you been involved with real estate investing before it became your full time focus?

I actually invested in a few deals before I quit my job. All I needed was a glimmer of hope that this was something that could work. We experimented with a few ways to replicate my income so we could consider becoming a single income family. It was a tough call because I was making six-figures and I had worked hard to build my career. We would take our annual bonuses and tax refunds to purchase a rental property. We put 25% down and purchased the property that I self-managed. We repeated that a few times until I had some cash flow to offset my income. After purchasing a few rent-ready rentals and having a proof of concept of using real estate investing as a tool to be financially free, we decided it was time to pull the trigger and take the risk of jumping into real estate investing full time.

When did you start Open Spaces? Can you explain the different parts of the company (Open Spaces Capital, Open Spaces Women and the Portfolio Program)?

The issue with rent-ready rentals is you need savings for seed money each time you purchase a property. Now that we were a single income family, I had to find a way to generate this seed money on a consistent basis so I could continue scaling our rental portfolio. After I quit my job and moved over to full time Real Estate Investing, I used my skills as an Engineer and leveraged my knowledge on building systems, teams and processes that I had acquired while climbing the corporate ladder to exponentially grow my portfolio. I had replicated my income and started acquiring millions of dollars in assets within a couple of years. As I met other investors during my journey, they wanted to learn how to scale their portfolio fast just like I had. I became passionate about helping others grow their portfolios and retire early and wealthy. Open Spaces Women is the education arm of our business that started organically and grew by word of mouth. The Portfolio Program is our 3-month immersive small group program directly with myself where I teach others how to build and scale their rental portfolio so they can build wealth and passive income for their family.

Why did you decide to start a program to teach new investors? How does the program capture your specific investing strategy?

I love working with folks like me, who are high earners but not willing to give into the demands of their golden handcuffs. We work closely by helping them learn the strategy and then implement it. I take a look at their deals myself, and help them through tactical, mindset and strategic steps they can take to replicate their incomes and make work optional. What I enjoy the most about this is seeing the lives of so many people like myself change right in front of my eyes. We have helped hundreds of investors build millions of dollars in assets.

Can you describe your specific investing strategy?

We specialize in the BRRRR (Buy-Rehab-Rent-Refinance-Repeat) Strategy that we supercharge with our proprietary SCALE Framework. Let me explain what BRRRR is. We purchase distressed properties, renovate them, thereby forcing appreciation, rent them out and then refinance them to pull all of our original cash out to move it to the next property while keeping the original cash flowing asset. It is the same method that flippers use, except we keep the assets instead of selling them. The goal is to build wealth and passive income over time. We found out that most investors who implement the BRRRR strategy are at the job site during the day and fending off tenant issues at night. We supercharged this strategy by leveraging various resources. We leverage other people’s time by building a robust team who can execute our vision without us having to ever go to the job site. This allows us to buy, renovate and rent properties sight unseen. A majority of our members invest out of state – it allows those living in expensive markets to take advantage of building wealth by investing in real estate. We leverage short term lending options to start with just $25K and borrow money to purchase and renovate the properties. We leverage technology, systems and processes to run the business like a CEO.

How does real estate investing provide a flexible lifestyle?

Honestly, when we started, we were very clear that we didn’t want to build a business that would end up being like another 9-to-5 job. We have always been very lifestyle-focused while building wealth. So the decisions that we took along the way to grow the business were aligned with this end goal in mind of allowing as much flexibility as possible. With the right systems, teams and processes we are able to execute the strategy while being location independent. In fact, we recently purchased a multi-family building while spending the summer in Spain with our kids. We run the business in less than 30 minutes per day and that includes growing the portfolio, finance, managing construction projects and rentals.

How has real estate investing changed your life for the better?

Real Estate Investing has allowed me to pursue the quest of finding my own higher potential. I now have a $10M portfolio, and I have retired from my career as an engineer. I am continuing to grow alongside my husband who has also been able to retire from his high pay job. We spend about 30 minutes a day working on our portfolio. We are able to spend as much time as we want with our two young children who are now 5 and 7. I have also found my calling: empowering others to build wealth and passive income through real estate investing. We have helped hundreds of investors quit their high paid jobs and create over $50M in assets.

What advice would you give to someone who is interested in pursuing real estate investing but is nervous about leaving their current job?

The best part about real estate investing is that it allows you to start and scale your business on the side until you are ready to quit your job or simply make work optional. In fact, the majority of people we have coached have highly paid 9-to-5 jobs or businesses (eg. corporate employees, nurses, doctors, engineers, lawyers, architects etc) and they continue to grow their portfolio until they are ready to take the plunge.

One thing to watch out for is the real estate gurus who flash their Lamborghinis. They have been teaching an old school approach which is focused on maximizing profits and not time. Figure out what kind of lifestyle you want first, then figure out your strategy and method of execution.

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