[00:00:00] Speaker A: Hey, everyone. Welcome back to season two, episode two of the more to life real estate investing podcast. I'm your host, Adrian PANOZO, and I'm very excited for this next season.
Season one, Everybody knows, was a great and it was a hit. And I met so many amazing people with so much great content and so many great stories in the real estate and investing game. So hence came back for season two.
Joining us today, we continue our journey and speaking to as many experts in the industry as we can with insightful discussions, real life case studies that shed light on the ever evolving landscape of property investment in real estate. Whether you're a seasoned investor or just sparking on your real estate journey, mortal life is your compass to navigating the dynamic market we're in now and achieving financial success through intelligent real estate choices. Quick little update before we introduce our guest.
We just closed on a 15 unit multifamily building in the GTA, specifically the downtown core of Hamilton. So super excited about that. Great deal. If anybody wants to know some numbers on that, by all means shoot me a DM or an email. Love to tell you about the way that deal evolved and the numbers surrounding that. And last, little bit of advice or information, really not advice. We now have a wholesale division with an EPC. So we have dedicated two really hungry wholesalers that work specifically and directly with EPC right here in our office that are bringing us an abundance of off market deals. If anybody out there wants to get a hold of some off market deals, we have a specific database strictly for off market deals, predominantly multifamily throughout the GTA, not just Hamilton. So never know what may come about. So if you want to be part of that off market database again, shoot me an email, shoot me a message. Can add you to that database.
Other than that, we're going to get right into it. I want to introduce to you a personal friend of mine that I've known for, shit, it's got to be what, six, seven years? Alex?
[00:02:46] Speaker B: We're looking at eight or nine at this point.
[00:02:49] Speaker A: I was going to say, yeah, we're getting old, but a little bit about Alex. So his name is Alex Powell, and Alex fell in love with the prospect of real estate investing at a very, very young age. By the age of 16, Alex was going to conferences and had read the majority of Robert Kawasaki's collection of books on building wealth. Good for you. I think at 16 I wasn't reading Robert Kawasaki, I know that for sure. But graduating from Mohawk College as a mechanical engineering technologist and later from Lakehead University as a Bachelor of Engineering, construction and Technology were always of interest to Alex. Immediately out of university, he saved every penny to buy his first house, which he fixed and rented out. After repeating the process, a number of additional times, he decided to leave his salary job to pursue real estate investing full time. Think shortly after that is when you and I met.
[00:04:04] Speaker B: You were my first.
[00:04:05] Speaker A: Remember the day you and I met? You were wearing a blue three quarter length like, jacket. It was winter.
[00:04:15] Speaker B: You loved it, didn't you?
[00:04:16] Speaker A: Yeah. Had the big collars and everything. Why I remember that, I don't know. But anyways, since then, get this one, guys.
Alex has raised over $16 million and has over $19 million in assets under management in real estate.
Incredible. As the founder of Pal Property Solutions, alex has elevated investment strategies, revolutionizing the way Canadian investors approach generational wealth. Spanning. Both us. And Hamilton markets, alex's diverse portfolio reflects his deep expertise, providing a reliable compass for aspiring investors to navigate the intricate world of real estate investing. Welcome to the mortal life. Alex after that long bio, that's a.
[00:05:13] Speaker B: Heck of an introduction. I love it. Thank you.
[00:05:16] Speaker A: Missing the drum roll, but anyways, thanks for being on the Mortal Life Real Estate Investing podcast.
[00:05:20] Speaker B: I'm really excited to be here. I'm a huge fan.
We love you, too. Kaylee and I both, so we're big supporters, and if we can add some value to your viewership, know, bring some content your way, we'd love.
[00:05:35] Speaker A: And, you know, for everybody that knows Alex and everybody that knows me, we kind of do the same thing, really, when you think about it. But here's another token of, you know what your network is, your net worth. And there is so much business out there.
I love having competition on the show.
Really. We do the same thing. We attract JV partners. We kind of have the same business model, so to speak, if I can say that. But there's so much business out there, why not have Alex, a friend of mine, on the show, to talk about his experiences, his expertise? And hey, reach out to Alex and we'll give you all his information at the end of the show and take it from there.
[00:06:26] Speaker B: On that note, it's funny being competition, it's funny being a competitor, because I think real estate investing is probably the most unique business where your competition could be a partner, could be a lender, could be a referral, could be a wholesaler. Like you just said, you're just promoting that new branch of your guys'business, which is awesome, by the way. I will be going on that buyer's list, and I'll gladly buy your wholesale deals if you're sending them out. But anyway, if you can share ideas and there's such an abundance of properties, I don't think and maybe I'm wrong, I don't know if one stuck out to you. I don't think we've ever competed for a property like with Offers or even Hamilton's. Pretty small. You tend to know your competition. You tend to figure who the players and stuff like that are. But that just goes to show you there is such an abundance out there. There's lots for everybody.
[00:07:25] Speaker A: And that's the whole point of the show is just have as many amazing people on this show to share the wealth really on their experiences and help people out and whatnot and network and meet new and exciting people. So getting right into it.
[00:07:42] Speaker B: Pal.
[00:07:44] Speaker A: We're going to start with, if you don't mind talking about investing in Ohio.
[00:07:51] Speaker B: Yeah.
[00:07:52] Speaker A: So the opportunities and challenges about investing in the US. Market, specifically Ohio, what specific industries or sectors in Ohio are currently and this is becoming such a really hot topic, investing in the like, I've heard it now like dozens of times, but what industries or sectors in Ohio are currently driving the real estate investment opportunities and how can prospective investors capitalize in those opportunities?
[00:08:24] Speaker B: Good question, actually. So one thing, if we're looking at industry, the one most prominent one that comes to mind right now is the new intel chip plant that they're developing in New Albany, which is just like 20 minutes outside of Columbus. I've actually driven the lot where they're building and this chip factory, like a semiconductor chip factory is going to be the largest chip factory in the world, right? So if you look at just Geopolitics, you look at tension between, let's say China and Taiwan. You look at Taiwan being like one of the sole distributors of semiconductor. They're holding a hot ticket item and there is a risk right now of China looming on their doorstep and hopefully it doesn't come to that, we don't know. But I think that countries like throughout the west, especially the US, they're heavily, heavily dependent on these semiconductors and these chips. So for them to start developing this and to incentivize businesses to be doing this is huge.
Then that's just one. I mean, Google just opened up one of their shops.
I'm using shops lightly. It's one of their locations in south side of Columbus as well.
Personally now this is just me kind of thinking outside the box a little bit, trying to future prospect. What does the world look like in 2030 years? Maybe not even just like 2345. But we're turning to automation quickly. AI is prominent. You look at manufacturing, is already using crazy technology to get things sorted. We used to outsource to China and now you're starting to see this deviation shift towards India, for example. And so a lot of manufacturing is heading out there and I'm wondering if there will come a time where there's almost like a breaking point where for companies it's going to be still more worthwhile to bring the things, keep them in house. In the countries like you see it for your own business and sometimes rather than subbing things out, you just kind of start the company within. But when you're dealing with automation and you're not having to pay expensive salaries and things like that to operate, there might be an argument for bringing things back home. And I think that when you look the Lake Erie within itself and you look at let's say St. Thomas down to Windsor down, then you go across the border there's Detroit, Toledo, columbus is down here a little bit. And then you would go up to Cleveland, up to Buffalo, that whole area. Got more in the states than in Canada. Got hammered when everything left into China in the 70s. Like look at Detroit, it's a ghost town.
Look at the property values. You look at the incentives that the government's putting in place to attract people back. Like Ohio's populations, people are moving into Ohio. It's a red state. So obviously that is pro tenant laws. There's all kinds of benefits from that side. But I do think that there is opportunity within the northeast of I'm trying to allocate myself here. The northeast of the US.
I don't know. And not just that. Price points are still incredibly attractive. You can still find single family homes that cash.
It's just different. There's a few different nuances. But so far we've just sold our second flip in Columbus and for us it was know, we want to create a proof of concept, but we want to do it completely, virtually like sitting behind a desk. How do I source deals? How do I fund deals? How do I renovate the deals? How do I make sure it's ready for listing and then how do I list it properly so I can create a profit? And it's been super simple just a couple of times, check in per week and the next thing you know you're creating an income source. So it's been pretty powerful and it's very exciting because now that the hardest part is just stepping in. And then once you're in there, you're kind of floating in that tub and you're just like, okay, well, can I buy a 20 unit building for a million dollars somewhere?
And that being cash flow is like crazy comparative to, let's say, Hamilton, where your appreciation is going to be a lot more, but your cash flow is going to be a lot less. So for me it's like, okay, what can we do? How do we diversify a little bit?
But we're still very bullish on the Canadian market, no doubt. I'm very much a believer and I think that there's still ways that it can go. But I just think it's kind of fun to try different things and see what's out there. Right?
[00:13:15] Speaker A: That's amazing.
And you answered my question because my next question was going to be are you really shifting all of your focus down to the US. Right now? Are you still doing deals down here? And you just said you're still very bullish here.
[00:13:31] Speaker B: Yeah, if the deal makes sense here. I think that nowadays, especially with the larger and you could speak to this better than I can, you've got more experience in the larger scale. Maltese we've got two apartments that we own that we had completely gutted and started from scratch.
But anyway, the truth is that nowadays, when you're buying these, you almost have to account for a period of three years where it's like nothing, and then you're just hoping that it's eventually with natural turnover or interest rates, decreasing that you're going to get to a position where it's positive cash flow, and then you can start making the income that you're planning to make. Do you see that same thing when you're writing your numbers?
[00:14:12] Speaker A: Yeah, just depends. And I get it a lot, too, because every investor wants to know, okay, the numbers in general, general speaking, am I able to get all of my money out if we do a burr on it? In general, how long does a project take in general? What's the ROI?
But obviously you can attest to this, Alex. It's hard to talk generalities, typically, because our apartment building purchases now ranging in size from six units, like I said, we just closed on a 15. We got a 47 unit on the Hamilton Mountain. We're involved in a Burr, a couple of twelve.
It's really case by case specific. Do I still think yeah, obviously until that building stabilized and then running smoothly yeah. You're not cash flowing 100%, so what's that stabilization period look like? And then obviously maybe tickering off that.
What does the whole time frame look like before you cash flow? I would say again, case by case, we haven't taken any of our apartment buildings to the Studs. I know which one you're probably talking about, but most of our apartment building rentals and acquisitions have been more cosmetic in nature. Doors, kitchens, baths, stuff like that. But we're not going to the Studs.
So it's really case by case, to answer your question. Yeah, still believe in them. And we've really transitioned into that space a lot with the rate hikes because the smaller stuff, quite honestly, you can speak to that as well.
The numbers don't make sense anymore here.
[00:16:00] Speaker B: You can't do a Duplex triplex here in Hamilton, even like fourplexes, it doesn't make sense. And you might wind up with a massive appreciated value if you score it at if you're buying it on market, forget it, no chance. If you somehow connect with a seller who's going to sell you because they want just out ASAP, you might still be able to make that margin of equity so that you can sell and create a profit, but there's a 0% chance for cash flow. So what do you do? Do you just not take out as much equity, which is a possibility you can keep? You buy something for under five and you put in 100 and it appraises for 850. You may not have to choke it up all the way, but you're still just about breaking even for what it's like. If there's some opportunities to do something bigger, something better, and that's why even in the US right now, one phrase that's kind of been coined out there, it's not utilized here as often. I'm sure people have a concept of it, but everyone's like, what's your buy box? What's your buy box? You ever heard of that?
[00:17:03] Speaker A: No.
[00:17:04] Speaker B: They talk about is your buy box is your set of criteria that you look for within a potential opportunity.
And I guess it's one way to hone in and focus on what you're wanting to buy. Because if you look at me in Hamilton, I'll buy anything if the numbers make sense. But people out there sourcing leads, and it's hard for them to really you chase three rabbits and you'll catch none kind of thing. Right.
So your buy box, for me, it's pretty simple. For a flip, I want to make sure that I'm netting 30K minimum on a deal. And for a single family home, it should be cash flowing about $500. And a duplex should cash flow 300 per unit. So that's kind of my expectations right now as to what things look like. And now you can put that out to the universe and to your network of wholesalers and realtors and things like that, and they're like, okay, they're not even going to bring me a deal if they don't think that the margins there. So it actually makes buying a little bit easier, and it helps you kind of hone in on expectations.
But anyway, here in Hamilton, I'm so used to buying just whatever. We've bought partial commercial, partial residential and converted it. We've been warming house to single unit conversions, like multi unit. Right. But single entity units with a kitchen and a bath rather than having common baths and kitchens. So we've done all kinds of stuff.
[00:18:34] Speaker A: Amazing.
[00:18:35] Speaker B: Yeah.
[00:18:37] Speaker A: Tell me those stats again.
You're okay with making and I'm glad I like where this conversation is going because I got a bunch of questions, and I'm really not sticking to them. It's just conversation is going organically, which is cool. You're okay with making 30,000 on a flip?
[00:18:54] Speaker B: Yeah. But you got to think of what your purchase prices are out there. I'll tell you.
[00:18:58] Speaker A: Oh, you're talking in the States.
[00:19:00] Speaker B: In the States here, it's a little too tight. Too tight. The one little market deviation here. Yeah, all those stats. That buy box is in Columbus or Cleveland, Ohio.
[00:19:11] Speaker A: Got it.
[00:19:12] Speaker B: Here in Ontario, you can't like one sneeze of the market and 30 grand is gone. It just doesn't exist.
But in the US. An example, we bought our first place for 184,000.
We put in just under 30K in rentals. We sold it for 265. And of course, there's like realtor fees and then there's lending fees and stuff like that. So you kind of a little bit over 20K. I'm just using 20K as whatever. We staged it and bunch of stuff. And through concept, of course, you're just hoping to make money when you're starting. So to me, I think that it was kind of a pretty powerful idea. Now, 20K isn't my 30K expectation. This was the first deal, but now I know. Now I know what kind of items we might run into.
It's funny, in the US, it seems like they don't care about timelines. Like, oh, yeah, we'll just extend the deal. We'll close next week. I'm like, here in Canada, the bells will be ring, people. Oh, yeah.
[00:20:16] Speaker A: Lawyers going, Nobody cares there.
[00:20:19] Speaker B: It's so loud, it's hilarious. But anyway, there's like these little nuances that you got to pick up on, and they use title companies, they don't use lawyers. You're dealing how buyers deal with home inspections, and just the way their contracts are written are a little bit different than ours. Like, for example, I just learned today that we had a property that was selling. They released it. One of the original offers had released, but they didn't abide by the contract terms. So our Realtor is actually keeping the $2,000 deposit, which they're going to funnel our way. And I was like, I didn't know this. I didn't care. Right? Yeah.
So, anyway, better than a poke in the eye with a sharp stick, I think, right? Absolutely.
[00:21:14] Speaker A: All right. I want to talk to you a bit about the Burr strategy, because you're one of the experts in the industry with that strategy as well.
It's become so popular, it's maybe slowed down a little bit with the smaller space, like we talked about. Given the numbers and interest rates, doing the Burr on a triplex fourplex in today's market is probably not the smartest thing in the world. But the concept in general, what are the common challenges and pitfalls investors should be aware of when utilizing the Burr strategy in multifamily investing?
[00:22:00] Speaker B: Very good question.
I think fundamentally, and I think that this applies for any type of real estate investing, first and foremost, you make your money on the buy, all right? So often you can price in your profit before you even close on that deal. Now, yes, construction funds can fluctuate, but if you're buying at a premium and then hoping to convert it to something more often, it's wishful thinking, I'll be honest. It's just not the best. So that does take some experience, and that's why people have partnered with us. The same reason they partner with you, Adrian, is you kind of have the experience of what to expect on a rental. It's going to be this is 30K, this is fifty K. You can put those numbers in your head quickly and then you can crank out what an estimate is within 5%, let's say, right, roughly. So you can kind of have an idea. The other pitfall I find that people do, and I think that it's very short sighted is that they don't heat as much or put as much effort or emphasis on the back end because you might buy something for a great deal that you maybe bought under market and you can renovate it for a reasonable cost that is expected for that kind of renovation. But then you go on the back end and it doesn't cash flow, what's the point, right? And I know it was funny.
I heard a couple of investors, especially during we've had a wild appreciation ride, like, what, the past five, six, seven years? However long it's been, even longer. Probably just Hamilton has just climbed like crazy. And I was hearing maybe more novice investors talking about the fallacy of cash flow. I was like, oh, I don't care about cash flow because, yeah, I'm minus $500 a month. That's minus six grand in the year, but I'll sell it next year and I'll make 100 and I get it.
There's truth to that, because if your property is appreciated by that much and you've added value, great. It is the gamble. That's the gamble aspect. So one thing I've always done and I try to stand firmly on is that when I'm buying, I'm buying for cash flow, actually. So I'm aiming to get everything. If not, I'm leaving a little bit of money in the deal or my partner's money, whatever the case may be. And then we are cash flowing on the back end. Right now. You start to see it. We're lucky in the sense that we've got a pretty substantial portfolio. We're like 89 units or something like that. I forget the exact number, but we're getting up there and we've got maybe two properties that are suffering like a couple of $100 negative cash flow. And then across the board, you're still healthy and it's not an issue.
So, like, knock on wood, interest rates start to behave themselves a little bit better. However, I think that as investors, you have to hedge for those moments. I think we got kind of short sighted. A lot of investors did, and they didn't see that this could you know, I'm grateful to have read books that kind of blare the warning signs out on these. Like, there's a really good book by Don Campbell called The Real Estate Cycles. Should check it out. If you haven't, I'm sure you probably have, but he was one of the founders of Rain in Toronto, and it's a very good book. And I just find that it's like you can pinpoint exactly where in time you are with the market, whether you're in a boom cycle, slump recovery, whatever it is. And you look at what those economic indicators actually, he spells them out for you, like, well, in this market, rents would be here, and this is what you should expect with homebuyers. And buyers have this kind of a feeling, and sellers feel like this. It's very interesting stuff. I'm very fascinated by that kind of thing.
[00:25:52] Speaker A: Amazing.
[00:25:53] Speaker B: Yeah.
[00:25:56] Speaker A: Once the property has been rehabbed, how do investors approach the rental phase in multifamily real estate? And are there any specific considerations compared to single family rentals?
[00:26:12] Speaker B: Very carefully.
So Kaylee right now is dealing with most of our property management and vetting of tenants, and she's a viper. She's wicked at it, and she's got a pretty good sense towards who to rent to and what she looks for. And it's sad that it's come to this. It's sad that it's like you have to be so diligent on who to rent to because there's so many renters, right? There are not clamoring for housing. They need houses. But as investors, when so much is reliant on that one piece of that check coming in every single month, and then if they decided to come delinquent you're, what, eight, nine months to get a tenant out, I think it's absolutely absurd. By the way, I'm sure most of your viewers would agree they're probably thinking the same thing, but I think that right now is probably one of the most important things you can buy, right? You can renovate. Right? You can refinance at the price you were hoping for, you can project the proper cash flows and advertise it for rent, and you get a shithead in there, doesn't pay your rent, and then what happens? So it is by far the most crucial thing. And I would suggest that if you have never rented before, or at least a property before, maybe try to use a property manager on your first one or two. It's actually kind of a good thing to get into anyway. Run your numbers with an 8% property management fee. Always in the contingency, right? So make sure you do that, because more often than not, property managers know how to vet and know what to look for. You don't know how we'll put a property up for lease. And within the first two weeks, let's say we have, let's say ten applicants, right?
Across ten applicants, three or four of them will have doctored documents.
That's where it's like they're showing a credit score of, like, yeah, 675. And then you actually run their credit, and their credit is 450.
Get it all the time. This is crazy. So you got to be very careful.
[00:28:24] Speaker A: That's a good point.
Obviously.
So they have an Adobe editor and they edit, right?
[00:28:34] Speaker B: Real estate agents submit applications on behalf of their clients that show amazing.
People just don't think, we're not going to run our own credit on the application. There's a little box there that says, we give consent to the reviewers to run a credit report on my we always run our own credit. It's because of that. It's crazy. And then you get situations where people are like, oh, yeah, I sold this house, and I'm just using the proceeds from the sale of that house. And you look and they were never the owner of the house. You get all crap.
Always.
We are very fortunate and once again, knock on a wood that we have the tenants that we've placed after renovations.
Our payment rate is like, 99% across. We have barely any units that don't pay. And the only troublesome tenants that we typically have are ones that we've adopted on a purchase.
[00:29:35] Speaker A: Right?
Yeah. Same as us. Same as us.
All right, next question.
Can you share a success story or a case study of a multifamily burr that you've been involved in recently?
[00:29:57] Speaker B: Yeah. How many units? We got an eight unit that was really successful in St. Catherine's.
[00:30:03] Speaker A: Sure, let's talk about that.
[00:30:06] Speaker B: Yeah. So we bought this one with a partner. Actually came to me. I met him through a contractor, and he had bought this property, so he sourced it and bought it and needed help with the execution. So we went in 50 50 on this deal, and he turned out to be probably one of my favorite partners to deal with. He's a really cool guy, so dependable, and it was a pleasure to do that kind of business. So it worked out really well from a relationship standpoint. But we ended up scoring this place for 750.
[00:30:36] Speaker A: It was a room 750 for eight units?
[00:30:39] Speaker B: No, it was 20 unit rooming house.
[00:30:42] Speaker A: Okay. 20 unit rooming house.
[00:30:44] Speaker B: All right. But it's a big building. I mean, this is what, 6000? Something like that? Yeah. Building. Okay. So we went through the legal process of converting it into eight units plus a 9th batchyard. So we put coin off laundry in there. We got a brand new boiler system. I'm talking down to the studs. Everything was restructured, reframed. We pretty much kept a shell. Brand new windows, new roof, new electrical, new plumbing. So it only had 1 meter. So we also split up each unit to its own separate meter. And then we have a nine house panel. Put up security cameras, big lights in the parking lot. It's a bit of a sketchy it was a bit of a sketchy area in St. Catherine, so we had a lot of repeat customers after we boarded the place up.
But when we bought the place, it was actually sold by a guy who was it used to be a nice student rental. So students would go there and they'd rent. And then all of a sudden, the homeowner who bought this place, who thought he was doing the right thing, and this goes back to my previous comment on leasing out to renters. He let in it's a beautiful building, running smoothly. He let in some riff raft. And this riff raft started to bring in drugs, staying up late. They're not students. They just needed a room to rent. All of a sudden, what do those students do? They get the heck out of there because they don't want to be any part of it. So what does he do? He's got to rent the place out still. So he's bringing in more riff rack. He's not qualifying them. He's got a big heart. He. Thinks he's doing the right thing. These people know, wanting to help him out.
Anyway, which way? Turns out that the whole unit gets turned over. So him and his wife put together this Facebook group, and they're going to put together a safe injection kind of property here where people can feel safe to come.
Anyway, lo and behold, not an ounce of copper is left in the place. They're ripping out the piping. The basements are flooding. There's no copper left from any of the electrical.
When we had bought it before closing, there was two overdose deaths in the building.
There was a guy there that claimed he was the superintendent. It's only because the owner had given him a whole lot of keys, and so he had keys to everybody. He didn't do anything. The lazy guy that just anyway, he asked some guys for their rent and they threw him off of the top staircase. And so he had a big neck brace on this guy.
When we had closed on it, first week we closed on it, there was a fire in the bathroom. Two guys smoking crack in the bathroom. The second week, two guys lit up our garage in the back. We had a whole detached garage in the back, up in flames. And the fire department comes, puts the fire out, and then finds us.
We're like, Lord, this is how this is going to start. This is the beginning.
So anyway, we actually worked with local law enforcement. We didn't go through the landlord tenant board on this. We didn't need to. Nobody had leases. There was just riff raff in and out. Nobody stayed there. You didn't know who one person was from the next. So the police, like the police headquarters or whatever, is literally right down the street. So if I was ever there, they said, don't ever go in. If you suspect something's in there, please call us. We'll have somebody come and walk through with you in case somebody jumps at you or something.
And they were great. They'd show up in literally 30 seconds. It was crazy. You called and someone would just pull right in because they all knew the building. They all knew the riff rack. On the day we had coordinated with the police and like, three cruisers showed up. Six people get out of the cars and they're just hucking stuff out windows. It was wicked. I just wish it would be like that more often. But we ended up boarding it up. It was for safety, because realistically, we've had now two fires, two deaths. A lady also got stabbed and had to get airlifted to Master Hospital. It was just chaos.
Place was being run rampant. So working with the right people, and we are very much like pro law enforcement, and so they were incredibly great to us and recognize the need to do something about this building because it was just getting out of hand.
So that's the beginning part. So we bought this thing for 750 construction wise permits. Took a year and three months. It was an absolute joke, but it was also like COVID times, and it was just crazy. You couldn't get a hold of anybody. One of our planners retired halfway through our plans, and then they kind of started over again. We're just, like, banging our head against the wall. And then finally we got going and managed. The place looks absolutely stunning. It's like such a beautiful building, but everything is new. Everything. It's just new fire alarm systems, new beautiful paved parking lot with the painted spots. And then it was about, let's say, 650 for rentals. So we rent it for 1.4, and I think our appraisal came in at 2.4. So it was good.
[00:35:51] Speaker A: Amazing.
The reason I love that story is because everything you experienced in that burr, nobody can teach you. No book, no real estate coach, no mentor, so to speak. That you're paying all these services for navigating, all of that has given you a wealth of experience and knowledge that, in my opinion, money can't buy.
[00:36:32] Speaker B: No, for sure. But it makes you more cautious. It makes you understandably. And I mean this with the fullest heart. It makes you kind of jaded. It makes you kind of pissed off that this is the way it is, that this is being allowed.
You see these old guys that have been in industries for like, 60 years. That guy's just a miserable old guy. I think to myself, I got to surround myself with all this positivity because I'm a pretty positive guy. But you can totally sense how 1 may get there one day if they just keep I remember the day the police came to take all the stuff out of the building.
My other partner, who we know well, Brian Karsti, we're in the process of finishing the renovation on 1212 Cannon, and he called me and he's like, somebody just came broke into the main floor units because the guys were working on the top two floors and they cut out all the wires on their main floor two units.
And I'm sitting there dealing with all this chaos at the other building, and he's calling me, and I just was like, it's crazy. And for what? They probably made like $150, if that, in copper.
[00:37:51] Speaker A: And obviously I've been through that in some of my properties, and I've dealt with those people my whole police career when I used to be on the job myself. So if they could rip out a bunch of copper for $10, they'll do it because it's $10 closer to getting their next piece of crack or whatnot. But on that note, when you bought this building and seeing what you were buying and knowing what you're going to have to navigate, did you have a sense of being uncomfortable?
[00:38:30] Speaker B: Oh, yeah, for sure.
[00:38:32] Speaker A: Big time, right? And you hear it all the time, get used to or be comfortable with being uncomfortable. That's where we grow. Right? And here's another classic example. You take on this crack house, grooming house.
Like, I can say I've never done a grooming house. I can also say, had I decided to embark on what you did, I'd be really uncomfortable. It's a lot of work. Oh, yeah, it's a ton of work. And I kind of know what's involved, but it's a whole other spectrum. But you grew in that space.
[00:39:16] Speaker B: Yeah, and it takes a while, too.
We know that you can't take a D class building and put A class tenants in there. You can't, because an A class tenant is an A class tenant. You want A class tenants, but they will go in there and in a hot second they're like, no, I'm not doing this. I'm out.
[00:39:34] Speaker A: Not living here.
[00:39:35] Speaker B: Not living here. So what typically you want to do is you have a D class building, and then you have natural turnover, and you maybe hope to get a couple of C's and the C's grow into it, and then hopefully you graduate to B's, and then eventually you want to really fix it up at the end to beautify it. And then you attract the right people, and people might balk at that, and people might say, oh, that seems so stuck up, or potential. Whatever it is, it doesn't matter. For us, at the end of the day, we are providing a really nice product. You're going to have brand new electrical, brand new plumbing. You're not going to have to worry about something happening while you're sleeping in your bed at night. You're not going to have to worry about somebody pound down your door who wants to steal your copper or something. At least we do try not to, but that comes with having the right people in place. And that goes for tenants. And we love our tenants honestly. We treat our tenants very well in our buildings that we have renovated because we want them to respect the.
[00:40:33] Speaker A: Absolutely, absolutely. I couldn't agree more.
We are at and we've only talked about two topics ohio, investing, flipping in Ohio, actually three topics. And now we've talked a little bit about the Burr strategy, and we're already at 32 minutes, so I want to go to our I love these questions, I really do. And I ask every single investor or sorry, guest that's on our show, I ask them all the same questions because I think it's so important, and I love the answers, and I get answers from one spectrum to the other.
What is your why?
Why do you do what you do?
[00:41:17] Speaker B: Good question.
Legacy.
I think it's a big one for me.
I come from my father's, amazing. One of my best friends in the world, one of the guys I look up to who's on the pedestal for me and unfortunately passed earlier this year. My grandfather my OPA that's on my mother's side, actually. But I've been very fortunate to have strong male role models in my life that I've been able to want to emulate. They provided a nice I'm lucky. I grew up in a nice household. We were middle class family. We're not wealthy, but I had good stability. And I think that if I look at my OPA, he started with nothing like poor, poor, poor family in Hungary and Eastern Europe. Fled the revolution in Hungary in 56. Nothing in his pocket. Came to Canada eventually after having met my grandmother and having some kids, and eventually, through the course of his career, built a multimillion dollar business in Hungary, a tool and die business, which is not an easy business for those people that know tool and die. He was just a sensational business owner and a sensational leader. The whole town loved him. He was super generous with what we had built there and he got the highest order in Hungary. He got knighted by the Hungarian government for bringing so much prosperity to Hungary. Just a sensational.
And you look at that kind of legacy, and I'm not talking financially, I'm talking like a legacy left behind by someone who just was a powerful individual. And I look at that. I've got three little boys now, a four year old, three year old and a one year old. And for me, it's like we're building this because Kaylee and I are planting the trees that we may not sit under the know. We do well for ourselves and we're successful, but really this is an opportunity for them to create their own legacy and to give them the tools. And we have experience. And by being in this industry, you have just a plethora of avenues you can travel down. Like real estate investing is amazing. You can go in the mortgage world, in the construction world, in the realtor world, you can do anything. It's just a ton of engineering. There's a big place in real estate. We use engineers all the time. So I'm just saying, for me, legacy and that kind of concept of building generational wealth is just incredibly powerful. That's my why love it. Long winded, but good.
[00:44:00] Speaker A: Last question.
You're obviously very successful now, but when you see and picture more to life, what do you see when you think about more to life? For Alex Powell?
[00:44:22] Speaker B: Good question.
Good questions, man.
[00:44:25] Speaker A: More to life.
[00:44:26] Speaker B: To me, it's consistency. That's what I'm going to say, consistency. I think that in my business, I've been very good at we're busy, we're doing a lot of exciting things.
Mondays don't scare me. I kind of look forward to getting into the grind and work and things like that. However, I think that when you're buying all kinds of things and you're kind of exploring outward and your competency bubble, I guess, is pretty big. We've done all kinds of weird and crazy stuff. However, it would be nice to be just like punching out a widget sometimes and that's what cash flow really is and that's why we love cash flow in a sense. But it will be nice to have consistency to allow us to be able to forecast someone who likes that kind of concept to see down the to be able to isolate from for a month. Let's say we have plans next year that we'd like to spend a month in Europe. Right. And in order to do that, you have to have consistency within your business. So it's really starting to create a focus around better systems, better operations, better communication, all that kind of stuff. Right.
[00:45:49] Speaker A: Amazing. Yeah, amazing. Love it. Well, we're just at 40 minutes, believe it or not, time.
[00:45:57] Speaker B: Adrian, there's going to be a part two.
[00:45:59] Speaker A: There's got to be a part two because there's probably another 2 hours. We could talk about everything else you've.
[00:46:04] Speaker B: Done, but you know, I could do that. It doesn't matter what it would be, you and I would just start shooting the shed and the next thing you know, 3 hours go by. Yeah, do the next one in person with some wine.
[00:46:13] Speaker A: What we should do, I was going to say you and I could open a bottle of wine and 3 hours later well, it won't be just one bottle of wine.
[00:46:24] Speaker B: Exactly. We need a couple of things.
[00:46:27] Speaker A: Well listen, amazing having you on the show. Tell everybody out there how do they get a hold of you? And should they want to pick your brain or do business with you in Ohio, or do business with you here in Ontario and use your expertise? How do they find you so instagram?
[00:46:45] Speaker B: It's palproperty solutions. There's an underscore somewhere in there, but search Palpatutions, you'll find us. We also have a website, WW palpropertysolutions.com.
So that's probably the two easiest ways and through those anyone can DM me or shoot me a message or send us through one of our contacts, capture things. It'll come right to me.
[00:47:07] Speaker A: Awesome.
[00:47:09] Speaker B: Thank you.
[00:47:10] Speaker A: Today, sorry.
[00:47:11] Speaker B: Thank you. By the way, this is a great show.
[00:47:14] Speaker A: You're welcome.
[00:47:15] Speaker B: Always a big fan when people give info to the public like this. It's good.
[00:47:19] Speaker A: Awesome. So guys, on a personal level, like I said when we started the episode, I've known Alex coming up to 810 years now, give or take.
Great guy. He's done a lot in the multifamily space.
Him and his wife pretty much run a family run business like I do. Great people, wealth of knowledge. Reach out if you'd like anything on this show that you heard and obviously want to pick his brain and do business together.
[00:47:55] Speaker B: Thank you buddy.
[00:47:56] Speaker A: On that note, thanks again, Alex. I'm looking forward to that bottle of wine and everybody, you know how to find me.
[email protected] is my email. Obviously we're all over social media as very, very easy to find. And don't forget, if you want to be part of that, Alex, send me an email and I'll hook you up. But everybody else as well. If you want to be part of our off market, strictly off market database team, or database that we're sending out, we created that in house, off market team now that's working in our building. We'll add you to that and we'll start shooting you deals as they come along. We have everything from Duplexes, which not a lot of people are interested anymore, but who knows, sometimes the price is right and all the way up to 50 unit apartment buildings.
All right.
Thanks again, Alex. Take care and we'll chat soon.
