Join an active community of RE investors here: https://linktr.ee/gabepetersen
On this episode of The Real Estate Investing Club Podcast 🎙️, host Gabe Petersen sits down with Palak Shah, former mechanical engineer turned real estate investor and co-founder of Open Spaces, to break down the exact system she and her husband used to walk away from 17 years of corporate life and build a $10 million real estate portfolio in just five years. If you are searching for real estate investing for beginners, BRRRR method real estate, or how to achieve financial freedom through rental property investing, this conversation is packed with actionable insight. 🏡💰
**THE SCALE FRAMEWORK EXPLAINED** 📈
Palak walks through the SCALE Framework, a system she and her husband built on top of the traditional BRRRR strategy (buy, rehab, rent, refinance, repeat) after realizing the classic model still felt like creating another job. SCALE stands for Scalable acquisitions and deal analysis, Construction without the DIY, Adding cash flow, Leverage and commercial finance, and Exponential growth. She explains how predictable deal analysis, a consistent deal pipeline, and moving from conventional to commercial financing allow real estate investors to scale a rental property portfolio without burning out or micromanaging every renovation and tenant call themselves.
**OVERCOMING THE FEAR OF FINDING DEALS AND RAISING CAPITAL** 😨➡️💪
One of the biggest topics in this episode is real estate investing for beginners who feel stuck by fear. Palak shares her framework for breaking down the fear of buying investment property into individual, manageable risks, from bad deal analysis to unreliable contractors, and explains why every risk can be paired with a specific mitigation strategy. Gabe and Palak also discuss why the fear of investing never fully disappears, even for experienced investors, and why trusting your underwriting and due diligence process matters more than trying to eliminate every risk.
#RealEstateInvesting #BRRRRMethod #FinancialFreedom #PassiveIncome #WomenInRealEstate
Want to learn more about our guest? Connect here: https://www.instagram.com/openspaceswomen/
Want to learn more about the REI Club Podcast, how to invest with Gabe at Kaizen, or join our community of active real estate investors on Skool? Visit the podcast website at https://www.therealestateinvestingclub.com or click here: https://linktr.ee/gabepetersen
On this episode of The Real Estate Investing Club Podcast 🎙️, host Gabe Petersen sits down with Palak Shah, former mechanical engineer turned real estate investor and co-founder of Open Spaces, to break down the exact system she and her husband used to walk away from 17 years of corporate life and build a $10 million real estate portfolio in just five years. If you are searching for real estate investing for beginners, BRRRR method real estate, or how to achieve financial freedom through rental property investing, this conversation is packed with actionable insight. 🏡💰
**THE SCALE FRAMEWORK EXPLAINED** 📈
Palak walks through the SCALE Framework, a system she and her husband built on top of the traditional BRRRR strategy (buy, rehab, rent, refinance, repeat) after realizing the classic model still felt like creating another job. SCALE stands for Scalable acquisitions and deal analysis, Construction without the DIY, Adding cash flow, Leverage and commercial finance, and Exponential growth. She explains how predictable deal analysis, a consistent deal pipeline, and moving from conventional to commercial financing allow real estate investors to scale a rental property portfolio without burning out or micromanaging every renovation and tenant call themselves.
**OVERCOMING THE FEAR OF FINDING DEALS AND RAISING CAPITAL** 😨➡️💪
One of the biggest topics in this episode is real estate investing for beginners who feel stuck by fear. Palak shares her framework for breaking down the fear of buying investment property into individual, manageable risks, from bad deal analysis to unreliable contractors, and explains why every risk can be paired with a specific mitigation strategy. Gabe and Palak also discuss why the fear of investing never fully disappears, even for experienced investors, and why trusting your underwriting and due diligence process matters more than trying to eliminate every risk.
#RealEstateInvesting #BRRRRMethod #FinancialFreedom #PassiveIncome #WomenInRealEstate
Want to learn more about our guest? Connect here: https://www.instagram.com/openspaceswomen/
Want to learn more about the REI Club Podcast, how to invest with Gabe at Kaizen, or join our community of active real estate investors on Skool? Visit the podcast website at https://www.therealestateinvestingclub.com or click here: https://linktr.ee/gabepetersen
Category
📚
LearningTranscript
00:05all right we are back with another episode of the real estate investing club i hope you guys are
00:11having a great day great week wherever you are and whatever day it is for you as always it is
00:17friday on the podcast so we're bringing that good friday energy to you and it is just the start of
00:23spring so i hope you guys are out there in your yards getting stuff done we just installed a
00:28number of planner boxes and my wife ordered tons and tons of gravel and so i've just instead of going
00:34to the gym recently i've just been shoveling gravel so it's been a good week for that reason but it's
00:38a good it's a good day for a second reason because we have pollock shaw with us on the podcast
00:43from
00:44open spaces um pollock is a they focus on the burr strategy with single family multi-family and they've
00:51created their own framework called the scale framework to help investors get into the game
00:56of real estate so i'm excited to hop into this pollock thanks for hopping on thank you for
01:01having me excited to talk to you absolutely i told you before we get on here we always like to
01:07start
01:07with stories we like to hear how people got to where they are so why don't you take us back
01:11to
01:11the beginning of your story in real estate and tell us how you got here yeah so i was in
01:17corporate for
01:1817 years i'm a mechanical engineer did the path that everybody says you should to become financially
01:26stable and i was in it for 17 years climbed the corporate ladder was we i was published author
01:35developed a niche framework it was great because i was traveling the world working with ceos and
01:41it's really nice to work with smart people you know i the golden handcuffs as they talk about
01:48and then uh we decided to have kids i was in my late 30s and my husband and i decided
01:53to have kids
01:56and i never saw them and i was just like i did everything they said i was supposed to do
02:03like everything follow the path and then now waited till my late 30s to have kids and i don't get
02:10to see
02:10them and that's the thing with corporate right they penalize you for wanting a family they penalize
02:16you for wanting a life outside of corporate and so i told my husband i was like i i want
02:23to quit my job
02:23but i was raised by a single mom who worked really hard to like give me a better life and
02:31i i wanted to
02:33make sure i don't make no financial impact i wanted to work on the and contribute to our family's finances
02:43so we started talking about real estate and started with just rent ready rentals and i thought that if i
02:53could get a few it would offset my corporate salary and then i could quit my job but then we
03:01realized
03:01that the growth was so slow because you had to save up for the down payment and if you wanted
03:07to become
03:07a single income family that wouldn't work because our income would then also reduce uh so we started
03:13looking into the bar strategy and uh we decided to execute it but we both my husband and i come
03:21from
03:21corporate and the way uh it had been executed and it's you know it's been done for decades like it's
03:28not a
03:29new strategy it's been done for a long time but it was always um it kind of like felt like
03:35i was
03:35creating another job and so we started applying business principles uh to bar and we developed
03:42our own framework called the scale framework uh to be able to scale the portfolio and then in uh
03:48fast fast forward to today in the first five years so this was 11 10 years ago i quit my
03:55job
03:55the first five years created a 10 million dollar portfolio uh and since then we have done every
04:04single strategy that we could get our hands on from single family to small multi to large multi-family
04:11everything with value-add investing at the base of it um so so yeah that's where we're at nice no
04:20i love
04:20it and i feel like uh your story really resonates um with both myself and a lot of people out
04:26there
04:26because you you know working in corporate i worked in corporate for um probably about a decade and uh
04:31it's fun when you're when you're in it but then other you know things start to come up in life
04:36and
04:36you realize that it doesn't give you the work-life balance i hate that phrase work-life balance but
04:42i guess the flexibility in your in your time um in order to fit in the the big things that
04:48really
04:48matter like family like spending time with your kids with your daughters and so you need that extra
04:53strategy and that's where i that's why i absolutely love real estate because it get it gives you know
04:59your average joe your average person the opportunity to create the the cash flow the the streams of
05:05income that they can create on the side they can create it as their as their second income source
05:09and then um when the time comes they can leave their corporate job and focus on what really matters
05:14at that phase in their life so love to hear that i love that you uh said you don't like
05:20the word
05:21the the phrase work-life balance because i don't either i think there's no such thing you really
05:25just prioritize what matters to you and sometimes there isn't a balance yeah and that's fine that's
05:34good yeah as long as you're following what you well the thing um what's great about entrepreneurship
05:41any sort of entrepreneurship be it in real estate or in business or whatever um is you know balance i
05:47don't necessarily feel like you're ever at balance but you are able to to fit your time to fit what
05:55you what's important to you your business and your family into the time slots that that you have you
05:59know that are in the day and you can fit everything in because you're able to um you're not supposed
06:04to
06:04be at a desk for eight hours you can do that work at any point and which allows you to
06:09be there for
06:09your family to show up for your family um and you're not making money with your time you're making
06:15money because of your talent your skills your systems and your processes absolutely um and that
06:21is actually a really good segue your your time your talents your systems your skills those are the
06:26things that actually do produce the money for you and having the right framework having the right
06:31business plan i don't really like the idea of business plan either but the right idea going into
06:36you know your your investment strategy um is very important you need to have the right framework when
06:42you're starting at the get-go or else you're going to be making a lot of mistakes i'm all about
06:46making
06:46mistakes and learning but it's not it's not the best way to go about things and so you guys have
06:50your system you have your your scale system that is based on the burr method everybody out there
06:55who's in real estate we understand what burr is for the those of you guys who are brand new
07:00buy rehab refinance repeat i can't remember i probably missed an r in there but
07:04basically buying a property fixing it up and then refinancing to get that equity out
07:08and so you guys built a framework uh a investing system on top of that framework tell us about that
07:15give us the details on on uh what's involved yeah so we uh we were interested in burr because we
07:22started with a finite amount of capital and we wanted to have ultimate scalability so we liked the idea
07:28of burr and how it allows you to generate that seed money after every deal and you can recycle the
07:35same
07:35capital but there were some issues with it um and the scale framework was built to combat those issues
07:42i took a lot of business coaching and i uh both my husband and i our backgrounds are in systems
07:47and
07:48processes he worked for a fortune 100 company he was on the finance and strategy side
07:52i actually put factories all over the world as an engineer and worked on building offshore teams so
08:00i had that background and so we combined that to build this framework um when you we realized that
08:08a lot of people who are doing the bar strategy especially when you're beginning to do it they were
08:14kind of trying to figure out how to just get the property and renovate the property without doing
08:20predictable deal analysis and so the letter s stands for scalable acquisitions and deal analysis
08:27so scale is an acronym and the letter s stands for scalable acquisitions and deal analysis how do you
08:33acquire properties but do predictable deal analysis so you know at the end whether you're going to cash
08:39out your money and whether you're going to cash flow and then have a deal pipeline i didn't want to
08:44create another job so i didn't want to do uh wholesaling i didn't want to do what do they call
08:49it
08:49driving four dollars i didn't want to do any of that i wanted the deals to come to me so
08:53how do you
08:53build a deal pipeline so deals uh come to you instead of you having to go out and find them
08:59uh the letter l um the letter c i jumped to l already the letter c stands for uh construction
09:07without the diy so in bar the first letter is buy and the second letter stands for rehab but instead
09:14of
09:15that we were like how do you do construction without the diy because like when i started i i knew
09:20that my
09:20peers who are also doing the same thing they would like wake up they would go to home depot they
09:25would
09:25get the material they would go uh get their subs and then get them set up at the job site
09:31and i was like
09:33i wanted to have breakfast with my kids that's why i was doing this um and so i said okay
09:37how do you
09:38do construction without any of the diy not that there's anything wrong with it this just wasn't
09:43my path and so how do you uh find vet and keep contractors how do you build project plans so
09:51they
09:51can finish on schedule on time the quality is good um the letter the third r the second r the
10:00third letter
10:00in bar stands for rent and instead we said hey um the letter a in scale so scale is a
10:09framework that
10:09sits on top of bar and each letter corresponds to the uh bar strategy and so we said hey instead
10:16of
10:16just renting it out let's focus on adding cash flow so that your tenants are happy and taken care of
10:24but
10:24at the same time you don't get those late night tenant phone calls um and then there's the refi
10:30step but instead we said let's focus on leverage so the letter l stands for leverage and commercial
10:36finance how do you start with a small amount of seed money instead of coming up with all the money
10:41to
10:41acquire and to rehab the property and so working with short-term lenders to bring under 25k for every
10:50deal but then having them fund the rest and then also at the end uh commercial lending as opposed to
10:59a lot of people are starting out start with conventional financing but moving over to the
11:03commercial side so you can have ultimate scalability and then the last letter in bar stands for repeat but
11:10instead of just repeating the letter e in scale stands for exponential growth so how do you put systems
11:18teams processes automation technology to be able to have that ultimate scalability and that way you
11:25can continue expanding the portfolio without spending a lot of your own time uh so that's kind of like
11:31the scale framework we have we're published authors we have a bug oh there's it's mirrored it's called
11:37accelerate your real estate very cool i love it so burr um the burst strategy generally typically it's
11:44something that's talked about in the context of single families you're going out there you're
11:47flipping a house um you're renting it out and then you're pulling out that equity it sounds like
11:51you guys have taken that same for that same structure that same format and you're trying to
11:56and you're just applying it to commercial to multi-family uh is that pretty accurate yeah we've also
12:01applied it to small multi-family and uh my husband heads up the larger multi-family area so that
12:08that one also uh value add investing is being done forever even a business right like you can acquire
12:15a business and add value to it and then the value of the business would go up when you force
12:20it to
12:20appreciate that way so it can be done in any any business yeah absolutely um so let's talk i mean
12:27the
12:28thing that i feel like most people struggle with is um especially the people that i've coached in my past
12:33is they're afraid of finding the money and then they're afraid of finding the deal
12:36um they feel like those are the two things that they they are not able to do and i i'd
12:43like to hear
12:43your um your take on how how you kind of shepherd people through that um because it is just a
12:50fear
12:50it's something that people that you need to get over and there's absolutely a solution for so
12:55finding the deal let's start with that how do you generally suggest people start and build their
12:59pipeline i really think that in the beginning i feel like we are afraid to find the deal because
13:06we're we're really putting all of the different fears and risks in one big bucket and then we want
13:12to just we look at it as this big pot of all the different risks that are involved and in
13:17investing
13:18and entrepreneurship inherently does have risks and so does life like you could cross the road and
13:24there is risk right so there's there is there are risks but i think if you instead of uh being
13:30afraid of
13:31all the risks if you divide them up and look at them individually i think that really breaks that
13:37fear and so um for every deal i break it break all that fear down into different pieces so when
13:49you
13:49really start thinking about it and deciphering it you realize you're afraid of all these different
13:54small things like what if uh what if i buy the property and it wasn't the right deal uh i
14:00didn't
14:00do the numbers right what if um uh what if i don't know how to do construction what if the
14:05contractor runs
14:06away with my money what if um what if the tenants don't pay all of these risks get piled on
14:12to just
14:12one thing like i'm just so afraid of finding the deal and so break it down and every every step
14:18could have a
14:19risk mitigation strategy that would uh that would that you'd be able to uh execute right so for
14:28example hey if you're afraid of your numbers not being right well build in a buffer and and see if
14:35the deal still makes sense and then i always tell new investors like think about it this way if you
14:43did
14:43a bunch of things wrong in this deal analysis how much money do you think you would lose and are
14:50you
14:51willing to take that chance on that deal as opposed to doing what you're currently doing and then when
14:58you really just put a number to it you understand that hey you know what i'm not comfortable with this
15:04number because i don't know i don't have the skill and there are some amazing team members that you can
15:11work with there are some great realtors there are some great um wholesalers there are some great
15:16contractors and when you learn how to step into your role as a leader and more than anything learn
15:24how to vet and work with the right people that can solve half of these problems yeah yeah and i
15:30will say
15:31the fear um or at least all of the fear never disappears you're always going to have fear even i've
15:36done tons
15:36of deals and even now when i even when i know it's an absolute killer of you know slam dunk
15:41of a deal
15:41i will get to the closing table and i'll be like what did it like i'll have that nagging fear
15:46like
15:47what did i miss this is what what is going to go wrong something else could go wrong something i
15:51didn't think of something that's not on the checklist um so that fear will never go sorry go ahead i
15:57don't
15:57mean to interrupt you i get excited well i was just saying that fear will never go away you just
16:02have to
16:03trust your your preparation trust your checklist your due diligence checklist trust your underwriting
16:09and trust yourself um that you have you know done what you needed to do to verify that it is
16:14um you
16:15know an actual deal and we're still making mistakes like fear doesn't go away mistakes don't go away
16:22the risk doesn't go away but then the bigger fear should be the bigger risk should be doing what you've
16:29been doing so far and doing that for the rest of your life that's a bigger risk in my opinion
16:33that
16:34should be the bigger fear than taking the leap and trying something new yeah so yeah we're still we're
16:40we're all still making mistakes and we're going to continue to make mistakes and still taking the
16:45risks and still have the same fears so i love that you said that and those uh those mistakes are
16:49going
16:49to be the basis of your best lessons i'll tell you that much you're not going to forget the mistakes
16:54you make all right with that uh unfortunately we do have to move on we're past the 15 minute mark
16:59so
17:00it's time to jump into the quick question round you ready all right all right starts with education
17:05it could be any form could be a book you've read movie you've seen conference you've been to mentorship
17:10program you've been a part of i just need two recommendations one for general life wisdom and
17:14then one for real estate oh i love that um you know what i'm reading um the almanac
17:21of novel ravikans right now and just finish that actually you just finished it's been the best
17:27books i've read in a long time so highly highly recommend that um and then in terms of
17:36uh community that i've been a part of i really think that when you when you move through this
17:44journey you're going to meet so many people along the way more than a specific community i really think
17:51that what i've learned is not to be transactional with people and really just cultivate long-term
17:57relationships and not really worry about making like that small amount of profit quickly and as
18:03opposed to really investing in people and the relationships as you move forward and you'll
18:08you'll realize like people i met 10 years ago will come and we'll do a deal together now because of
18:16the
18:16past and because of the relationships yeah does that help yeah no absolutely and i i would second
18:22that myself is you know the relationships you build today are are they're going to continue on into the
18:28future and so um i've done you know people that i just i met like you said 10 years ago
18:33when i just
18:34got started i'm still still working with i'm still doing deals and so those you really have to cherish
18:38the good relationships um from the beginning uh yeah i would definitely love that piece of advice
18:44and that moves us to the second question this is for your younger self so let's go back to the
18:49pollock who was still working in corporate so many years ago go back to her look her in the eye
18:53give her
18:54one piece of advice moving forward oh that's so good um i think really trusting myself and
19:04and knowing knowing that everything's gonna work out yeah because i think as a new mom i was so afraid
19:12of something happening to the kids or something happening to the finances or something happening
19:17to my career and all in the end it all works out yeah and when things do happen which they
19:23will bad
19:23things happen all the time you'll you'll solve that problem when it comes you don't have to work
19:27i feel like the worrying is the problem because that is what's detracting it's taking away from your
19:33energy in the moment and the energy that you have right now is the thing that matters because
19:37you can't you can't prevent bad all the bad things from happening they're gonna happen
19:41um what's most important is your ability to deal with those problems and uh that is always in the
19:46here and the now and as women like we're we're often told we don't know a lot we're often just
19:53we're
19:53just raised that way not to be that confident and it's no you you know more than you think you
19:58know
20:00all right next question is about the u.s it's a big place there is a lot of opportunity out
20:05there
20:05give me the single metro you're most excited about investing in today oh i love that so we have
20:13a large amount of portfolio our large amount of our portfolio is right now in philadelphia and
20:19we invest all over the country but i i love philadelphia i love how the city is growing from
20:25within um investors are a lot of investors here are local and yeah love love investing here
20:32nice yeah we don't hear for some reason we don't have a lot of people on the show that invest
20:36in you know new england area it's mostly you know people are really they're keen on the south southeast
20:42and that's where a lot of people are investing now but and that's true yeah yeah new england there's a
20:48lot of opportunity like i told you where i'm actually buying a mobile home park out in pittsburgh
20:52right now um it was the first time i'd ever been out there on the due diligence trip and it
20:56was
20:56beautiful i'd never been in that area of the country and it's a really pretty area yeah i've
21:01never been to pittsburgh but it's a great place to invest all right next question is about finding
21:07deals it all starts at getting in contact with the seller and pending that purchase agreement so
21:11what is your favorite way to generate leads and find new deals again it's all about relationships
21:17i love finding deals on and off market uh so mls is still a great source of uh deals if
21:25you
21:25know how to do your numbers um and then know how to connect with um realtors and agents and
21:33especially if you're new show up as a legit investor who is not wasting anybody's time that's still a
21:38great place to uh find good deals and then off market deals love working with wholesalers as well
21:45they there's and and people always say like um you know that there's they because that industry is
21:55unregulated you don't know what you're getting into uh but you really if you know how to do your due
22:00diligence it's still um another great uh way to build a solid deal pipeline yeah absolutely and that
22:07all i mean both the things you said were relationships there so building those relationships
22:12is so key um not only in in uh in you know acquisitions and in deal finding but in everything
22:18else and lending and um your contractors just building those relationships keeping those up
22:23uh it can't be overstated how important that is and as we leave corporate right like this becomes
22:29our community you don't have those water cooler conversations anymore these are your people now
22:34so enjoy enjoy building those relationships there you go all right next question is about lessons
22:40learned we've already kind of touched on this but we're going to take it um we're going to go down
22:44to the details and go to a specific deal uh not every deal we go into goes the way we
22:49expect it in
22:50fact pretty much every time something goes wrong and that's when we get to learn a lesson so what was
22:54a deal that went a little bit sideways for you and then what was the lesson you pulled from it
22:59uh so one of the uh properties that we acquired uh we didn't change the locks right away which i
23:06highly
23:06recommend that you do um we didn't that that's where we learned that from we didn't change the locks
23:12right away and we had a uh a theft in that property that night um i was told it was
23:19an estate sale and
23:21the realtor did tell me that a lot of people have keys to this property make sure you change the
23:26locks
23:26uh but yeah change the locks same day you when you when you acquire a vacant property
23:31yeah absolutely it's crazy how people get into get into properties i own um a number of self-storage
23:38facilities and people breaking in is one of the the biggest thorns in my side it's just uh it's
23:44something you just got to deal with yeah um all right next question is about ai this is a new
23:50question
23:50we've been talking about uh but ai is here to stay and it's impacting every business that implements it
23:55and so how are you implementing ai in your business today so yeah we run my husband and i run
24:02um
24:02five different businesses real estate was just the beginning point for us and in our org chart we
24:08actually have ai employees uh we actually have an asset manager right now that's and it's a fully ai
24:14employee uh one of my ai employees got me to talk to you today um yeah uh it's a great
24:23way to
24:23leverage what you already know and automate it um i'll give you one very tactical quick example um
24:32when a tenant moves out we create a disposition form that needs to be sent to them uh our va
24:38used to make
24:39it for us and now with ai um there's an agent that makes it it has a template all it
24:46needs is a
24:47email to be forwarded to it from our property management company and it creates the form automatically
24:52nice what uh what um agent tool are you guys using so we just moved everything over to claude
24:59but even chat gpt the latest uh version is actually pretty good but yeah we love claude we have a
25:06team
25:06uh account with claude and every week i hold a training for my entire team because everybody needs to
25:14keep themselves updated on how to use ai what's claude's agent um called it's claude
25:22there's chat co-work and code do you mean co-work uh i think i mean co-work yeah i
25:27i do love claude i um
25:29i have a subscription to all of them but i haven't dove into that element of it i've been meaning
25:34to
25:34though because i've heard good things about it it's amazing yeah you just have to just like with
25:40anything right just like with real estate you got you gotta just get yourself used to it it's really
25:44great all right that leads us to the very last question this is for the listeners you've given us a
25:50lot
25:50to think about i'm sure people want to reach out get in contact with you this is a two-parter
25:54where
25:54can they find you and then what can they expect when they reach out um the best way to reach
25:59me
25:59is on instagram dm me at open spaces academy or open spaces women and uh yeah we have tons of
26:08free
26:08resources uh so when you reach out just tell us where you need help and we'll find a free resource
26:16to to help you yeah perfect i will put uh palak's urls in the show notes so if you guys
26:23want to reach
26:23out all you got to do is click a little more in the description it'll pull down that full description
26:28and in there you can find her links all right palak that wraps it up thank you very much for
26:34hopping on the show yeah thank you for having me this was fun absolutely for everybody who's with us
26:40today thank you guys for showing up you are the reason we do this so if you guys have any
26:44questions
26:44reach out to me gabe at the real estate investing club.com if you guys want to support the show
26:49just leave us a comment review anything like that other than that i hope you guys have a great week
26:53keep rocking real estate and i look forward to seeing you on the next episode
26:58you
26:59you