3 Tips for New Investors When Repeating for BRRRR During COVID-19

3 Tips for New Investors When Repeating for BRRRR During COVID-19

2 min read
Palak Shah

Palak Shah (BiggerPockets Podcast episode guest #368) is the founder and owner of Open Spaces Capital and Open Spaces Women. An engineer by trade, after the birth of her two kids, Palak decided to make the move to entrepreneurship to be able to spend more time with her children.

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 three years investing full-time, Palak purchased, renovated, rented, and refinanced properties creating an almost $5M rental portfolio and generating $1M in annual revenue. It is now her passion to empower other investors to pursue entrepreneurship through real estate investing to live an empowered and financially free life without taking undue risks or over-leveraging through her coaching program Open Spaces Women. Follow her on Instagram @openspaceswomen for tips and motivation for building and scaling your buy and hold portfolio.

Experience
Palak worked in engineering leadership in various industries. She was in the nuclear industry for six years until she joined a startup as a consultant to analyze big data to predict power plant failures. A few years later, she moved over to the management side in engineering at a startup for efficiency measures. She then spent six more years in the pharmaceutical industry, running a specifications department at a glass manufacturing factory.

After the birth of her two kids, Palak realized she needed to create a life of financial independence—one that allowed more time for her family while allowing her to still make an impact. She decided to make the move into entrepreneurship, co-founding and managing Open Spaces based in Philadelphia. Her focus is on renovating deteriorated properties in and around the city.

Palak manages the end-to-end lifecycle, starting from sourcing properties, completing renovations, and renting them out, along with financing and investor relationships. She takes pride in bringing people together to achieve the common goal of empowering a community through real estate development. She believes that profitable growth can be achieved, sustained, and even enhanced by embracing diversity in business partners and by engaging with local communities to foster development that is inclusive.

Open Spaces accomplishes this by providing high-quality rental homes and apartments, with great customer service, at prices that are affordable.

Palak is active on Instagram @openspaceswomen and is passionate about inspiring other professionals.

Press
Palak was honored by Billy Penn in the “Who’s Next Real Estate and Housing” series of 2018, highlighting Philadelphia’s most dynamic real estate, housing, and development professionals under the age of 40. She was also featured in the BiggerPockets Podcast episode #368 and Real Estate InvestHER’s podcast episode #47.

Education
Palak graduated with an MS in Mechanical Engineering from University of Illinois.

Follow
@openspaceswomen on Instagram
OpenSpacesWomen.com

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And so it goes: rinse and repeat.

BRRRR has been a life-changing strategy for me, allowing for retiring out of my job as an engineering Manager—although I really wouldn’t call it retiring because I still work but it definitely feels like retirement! It’s also allowed me to spend time with my children while still making an impact. And—very recently—in addition, it’s allowed my husband to join the business full-time, leaving his corporate career in finance and strategy ay a Fortune 100 company.

The scaling component of the BRRRR strategy has been the most appealing and transformative for our finances.

Related: BRRRR Investing: The Ultimate Guide to the Buy-Rehab-Rent-Refinance-Repeat Strategy, Made Simple!

renovation interior with vinyl plank flooring and faux brick wall and gray paint

I combined my engineering background and 17 years’ time in corporate America to build robust systems and processes, adding a deep understanding of the world of finance. This gave me an entirely new career that pays me significantly higher returns for much less work. Not to mention the amazing freedom that comes with flexibility!

In the current economic uncertainty, scaling and growing seems to be unheard of. When people in the real estate industry usually talk about growth, it is typically spoken of with high risk and irresponsibly low equity in mind. When I speak of growth, I mean low risk and financially responsible growth that comes with being parents of two young children and wanting the ability to provide for them in any circumstances.

We have been moving forward without letting the current situation impact us significantly. And because of a few key strategic moves we have made in the past few years—and most significantly, in the wake of the coronavirus pandemic—I’m sharing tips with you today. If you are on the verge of giving up, my hope is this will provide you with motivation to keep going.

Related: 3 Tips for New Investors Rehabbing for BRRRR During COVID-19

3 Real Estate Repeating Tips During COVID-19

1. Invest for cash flow, not appreciation

Very early on in my journey, I invested for appreciation. I did get great returns—but it is not a very reliable strategy. I do not recommend that you invest for appreciation in the current conditions.

cash-flow-appreciation

For the past few years, we have stopped investing in volatile, high-growth neighborhoods and instead focused on secondary markets that allow us to obtain great cash flow and building of equity without undue risks and volatility.

Related: 3 Tips for New Investors When Buying for BRRRR During COVID-19

2. Leverage technology

If you are one of those investors who has shied away from property management software, Google Drive, banking with institutions that allow you to perform 99% of the transactions online, virtual mailboxes, and various other tools that are available—now is the time to break out of that comfort zone. Getting comfortable with technology can do wonders for your business. If there is one piece of advice I want you to take from this series, it is this one.

3. Stay nimble

As the circumstances change, staying adaptable as a person and nimble as a business is the best advice. It can change your trajectory dramatically. The advantage that the larger players—the goliaths in real estate—have is their size. However, the “Davids” of real estate will be able to stay nimble and quickly make changes as needed.

So, open that spreadsheet and call your lender. Network with other investors and make this pandemic the time you made key changes to your mindset to revamp the financial future of your family. Take calculated risks, and build wealth. Happy BRRRR-ing!

Do you have any questions about how to implement these tips?

Talk to me in comments below.