How to Build a Rental Portfolio (Fast) That Gives You Financial Freedom

Summary

Real Estate Rookie Podcast Summary: "How to Build a Rental Portfolio (Fast) That Gives You Financial Freedom"

Release Date: May 7, 2025
Hosts: Ashley Kehr and Tony J. Robinson
Guests: Nidhi Pollak and Palak Pollak
Duration: Approximately 48 minutes

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1. Introduction and Guest Background

In the premiere episode titled “How to Build a Rental Portfolio (Fast) That Gives You Financial Freedom,” hosts Ashley Kehr and Tony J. Robinson welcome seasoned real estate investors Nidhi Pollak and Palak Pollak. The Pollaks share their inspiring journey from long-term corporate careers to building a $10 million real estate portfolio in just four years.

[00:24] Ashley Kehr: “If you've been curious about supercharging your portfolio, but you weren't exactly sure where to start, this is the episode you've been waiting for.”

Nidhi and Palak transitioned from corporate roles after 15 and 17 years, respectively, recognizing the need to build true wealth and prioritize family time. Beginning with single-family rentals in 2015, they quickly scaled using the BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat), expanding into duplexes, triplexes, and quadplexes.

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2. Transitioning from Corporate to Real Estate

The Pollaks delve into the pivotal moment that led them to leave the corporate world. Balancing demanding careers with raising young children, they faced challenges like inadequate maternity leave and the constant stress of corporate life.

[02:58] Palak Pollak: “I can't do this anymore. I want to be with my kids. It just feels very unnatural that you work so hard and then you never see what you waited so long to achieve.”

Deciding to become a single-income family, they dedicated evenings to real estate, ultimately allowing both to exit their corporate jobs and pursue real estate full-time. This transition not only provided financial freedom but also a deeper sense of personal fulfillment.

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3. Implementing the BRRRR Strategy

The core of the episode focuses on the Pollaks' effective use of the BRRRR strategy to rapidly scale their rental portfolio.

3.1. Scalable Acquisitions and Deal Analysis (S)

Nidhi outlines the importance of defining a clear market and property criteria before sourcing deals. By narrowing their focus to specific zip codes and property types, they eliminated the majority of unsuitable deals.

[26:02] Palak Pollak: “The more specific you are, the more you're going to stick in their mind... you're serious about it.”

They emphasize targeting properties that match their investment avatar—typically three-bedroom, one or two-bath homes—to streamline the acquisition process and attract relevant deals from wholesalers and realtors.

3.2. Construction Management (C)

Managing rehabs efficiently is crucial. The Pollaks share strategies to avoid the pitfalls of DIY projects, advocating for outsourcing to reliable contractors. Key points include:

• Finding Reliable Contractors:
  Nidhi recommends contacting multiple contractors and vetting them thoroughly. They suggest leveraging local resources, such as county websites to identify contractors who have recently completed renovations.

  [32:36] Palak Pollak: “Go to the county website... find at least 10 to 15 contractors using that.”

• Managing the Rehab Process:
  Maintaining a balance in the level of rehab ensures properties are neither over-renovated nor under-prepared for renters. The Pollaks stress the importance of contingency budgeting (10-15%) to account for unexpected costs.

• Appraisal Strategies:
  To maximize property value during refinancing, they recommend preparing detailed documentation and professional photographs for appraisers.

  [15:36] Palak Pollak: “Preparing that packet is going to allow them to really view your property in the light that you want it to be seen.”

3.3. Adding Cash Flow (A)

Enhancing rental income involves strategic upgrades that appeal to tenants without incurring excessive costs. The Pollaks focus on:

• Quality Finishes:
  Installing stainless steel appliances, granite countertops, and in-unit washer/dryer units to attract high-quality tenants willing to pay premium rents.

• Tenant Retention:
  Maintaining consistent rent for good tenants to reduce turnover and vacancy rates, thereby stabilizing cash flow.

[35:37] Palak Pollak: “One of the biggest costs that you'll have is the turnover... so that's what they're doing, right? That's, that's basically what we're repeating.”

3.4. Leverage in Commercial Finance (L)

Securing favorable financing is pivotal for scaling. The Pollaks share their exhaustive approach to finding the right lenders:

• Networking with Lenders:
  Nidhi contacted approximately 90 banks to understand their offerings, emphasizing the need for an organized spreadsheet to track lender interactions and terms.

  [41:22] Palak Pollak: “Build a giant spreadsheet to remember which bank I called, what was the number, what was the contact that I talked to.”

• Utilizing Technology:
  Tony suggests using tools like ChatGPT to compile lists of local credit unions and regional banks, streamlining the lender search process.

  [44:09] Tony J. Robinson: “I went into ChatGPT and I said I need a list of 100 banks and credit unions...”

• Professional Presentation:
  Establishing a credible investor presence with a dedicated email and a concise elevator pitch enhances interactions with potential lenders.

3.5. Exponential Growth (E)

The final component focuses on scaling the portfolio exponentially through:

• Mastering Deal Analysis:
  Developing expertise in evaluating deals to ensure profitability and scalability.

• Managing Teams Effectively:
  Building and maintaining reliable teams, including contractors, realtors, and property managers, to handle day-to-day operations without micromanagement.

• Systematizing Processes:
  Implementing consistent systems and templates across all properties to ensure uniform quality and operational efficiency.

[46:04] Nidhi Pollak: “Don't rely on your contractor to do that. For your realtor to do that for you, you really need to master deal analysis.”

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4. Overcoming Challenges

The Pollaks candidly discuss common hurdles in real estate investing, such as managing unexpected rehab costs and dealing with undervalued appraisals. They advocate for:

• Respectful Appraisal Challenges:
  When appraisals fall short, they recommend respectfully contesting the appraisal by providing comprehensive evidence of property improvements and comparable sales.

  [21:29] Nidhi Pollak: “You can respectfully challenge the appraisal... but be respectful.”

• Persisting Through Mistakes:
  Acknowledging that errors are part of the learning process, they highlight the forgiving nature of the BRRRR strategy compared to flipping, allowing for longer-term wealth building despite occasional setbacks.

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5. Key Takeaways and Tips

• Define Your Investment Avatar:
  Clearly outline the type of property and market you aim to invest in to streamline deal sourcing.

• Vet Contractors Thoroughly:
  Engage with multiple contractors to ensure reliability and quality workmanship.

• Prepare for Appraisals:
  Provide detailed documentation and professional photos to maximize property valuations.

• Master Deal Analysis and Financing:
  Develop strong analytical skills and maintain relationships with a diverse range of lenders.

• Build and Manage a Reliable Team:
  Delegate effectively to focus on scaling rather than getting bogged down in daily operations.

• Leverage Technology and Networking:
  Utilize tools like ChatGPT for research and engage actively in real estate communities to build connections.

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6. Conclusion and How to Connect with the Pollaks

As the episode concludes, Nidhi and Palak invite listeners to engage further by attending their session at BPCON in Las Vegas, where they will delve deeper into their scaling framework and share comprehensive case studies.

[47:04] Nidhi Pollak: “Things that are working in this market that you need to be doing right now for every step in the process, case studies of deals... so if you can be there.”

Additionally, they offer a free retirement calculator and a strategic planning tool available through BiggerPockets, empowering listeners to map out their paths to financial freedom.

[48:28] Palak Pollak: “You can use the code biggerpocket to get it for free.”

For more insights and resources, listeners can follow the Pollaks on Instagram at Open Spaces Academy and attend their upcoming sessions for personalized guidance.

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This episode of Real Estate Rookie serves as a comprehensive guide for novice investors aiming to build a substantial rental portfolio efficiently. By sharing their proven strategies and actionable tips, Nidhi and Palak Pollak provide invaluable roadmaps for achieving financial independence through real estate.

Transcript

[Ashley Kerr]

If you've ever wondered how to take your real estate investing from just a side hustle to a multimillion dollar business, today's guests have the exact blueprint.

[Tony J. Robinson]

Yeah, that's right, Ashley. They've built a $10 million portfolio and engineered their escape from the corporate world, all while raising a family. Nidia and Pollock created a framework that makes their brrr strategy so efficient, they're able to build long term wealth incredibly fast.

[Ashley Kerr]

And they're pulling back the curtain on this entire process, from market selection to financing strategies, and even more. If you've been curious about supercharging your portfolio, but you weren't exactly sure where to start, this is the episode you've been waiting for. This is the Real Estate Rookie Podcast. And I'm Ashley Kerr.

[Tony J. Robinson]

And I'm Tony J. Robinson. Nidhi Pollak. Welcome to the Real Estate Rookie Podcast. Super excited to have you both.

[Nidhi Pollak]

Thank you so much for having us.

[Palak Pollak]

Thank you for having us. We're excited too.

[Ashley Kerr]

Now, you guys have been experienced podcasters on the BiggerPockets Real Estate Podcast, but welcome to the Rookie Podcast where our listeners are way more engaged, way more awesome for the audience. Can you give a high level overview of your portfolio?

[Nidhi Pollak]

Love it. Thank you again for having us. So, yeah, two. To give everyone a quick backstory, Palak and I were in corporate for a long, long time. We kind of, you know, followed the traditional route of getting a college degree, you know, kind of trying to climb the corporate ladder for about 15. I did it for 15 years. Palak did it for around 17 years. And then we realized we needed to kind of build, you know, wealth. We had income, but we didn't really have wealth. And we really wanted to spend time with our little kids. So we started investing in real estate this back in 2015, 2016. And we started with just single family rentals. Right. Rent ready rentals. And we quickly realized we wanted to scale a little bit faster than that. We wanted to be able to retire in four to five years instead of waiting 15, 20 years to be able to retire. And so we found the birth strategy. We scaled in about four years, we built a $10 million portfolio of single family homes, but also duplexes, triplexes, quadplexes, slightly larger properties as well. And yeah, and we were both able to quit our corporate jobs and now we do real estate full time.

[Tony J. Robinson]

So you guys have built a successful portfolio. And I think a lot of rookies are in the same situation that you guys were in where they're working the corporate gig. They, they did the quote, unquote American dream. Went to school, got a career. They're doing all the things, but they, they just feel that something's not right. So I guess maybe tell us about that moment when you realized that the corporate lifestyle wasn't for you. Like, what specifically triggered that decision to go all in on real estate? Did you guys have, like a horrible boss? Was it, you know, something else that happened? Like, what, what was that moment for you guys?

[Nidhi Pollak]

Haven't we all had that?

[Palak Pollak]

Yeah, we worked till our late 30s and everybody told us that that was the right thing to do. Become financially stable and then think about having kids. So that's what we did. And so we had two kids back to back. And I remember, and that was maternity leave is next to nothing. And I remember going to work and on a conference call and I had to do it from my office because I had to pump while I was on the conference call. And I'm sitting there pumping and trying to get on this call and do the thing. And I'm looking around and I'm like, wow, is this what I worked so hard to achieve? And that day onwards, every day, I was like, I gotta get out of this. Like, I can't do this anymore. I want to be with my kids. It just feels very unnatural that you work so hard and then you never see what you waited so long to achieve. And we're first gen immigrants. We don't have a village. We were constantly struggling. We were stressed out all the time. And so after months of turmoil and, you know, I mean, you know, as a woman who's built up a career, like, I felt like I was letting everybody down by choos to get out of corporate. And so months later, we decided we were going to become a single income family and I started pursuing real estate full time. So we would work on it together in the evenings when the kids, you know, were asleep. And then during the day, I would go off and do whatever I could with the two kids. And it's funny how, you know, in corporate, like, you feel like everybody else decides what your capability is and how far up you can go. And then when you start working for yourself, you're like, wait a minute, I am way better than I thought I was.

[Ashley Kerr]

And you're so used to, like, one downside is you're so used to somebody else telling you what to do or, like, which path to take or whatever in a W2 job. And then when it's just you, the possibilities become endless because you're not told what to do. But sometimes that shift is hard, like not having that guidance and, you know, or even like somebody say, like, you have to work from 9 to 5 now it's like, oh, maybe I can just sleep in today. And like getting into that work mode too, having to push yourself, like it really is a drastic change or, or.

[Palak Pollak]

The other way around. If you're, you know, really motivated and excited, you could really go off and overwork yourself. You really have to understand how, what your rhythm is and what works best and how to make decisions without seeking other people's approval. And what is your strategy and what is the right step. And I completely agree that people, that's why I think us as real estate investors, we start chasing all the shiny objects because the opportunities are endless. And nobody tells you that this, you have to stay in this lane. This is your strategy. Stop looking at other things.

[Tony J. Robinson]

Discipline, I think, is something that's very hard for anyone that's entrepreneurial to really focus in on. But I couldn't agree with you more, Pollock, because I remember the moment as an adult when I really realized that I couldn't be a traditional W2 employee for the rest of my life. And it was my first big boy job after college. And I came in, I thought I crushed it. I thought I was doing incredibly well. My annual review comes up and they're heaping all this praise on me. Tony, you've done a phenomenal job. You know, you've been such an invaluable part of this organization. And they gave me a 2% raise. And at the time, I think I was making like $65,000. So I went from like 65,000 to like 67,000. And I was like this, like. Like what? Like what am I doing? Like it, like, is this really all that that's there? And I think the benefit of being an entrepreneur is that you get to decide, improve what your value is in the marketplace. And if you are valuable, people will reward you by paying you money. And if you are not valuable, people will show you that by not paying you money. So it's very clear. But I think the benefit is that you get to prove to yourself how valuable you are.

[Nidhi Pollak]

100%.

[Tony J. Robinson]

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[Ashley Kerr]

So once you made that transition from quitting your corporate position and you're focused on real estate, what kind of things did you get into? Did you chase a different strategy and try different things out? Kind of tell us the path you took from there?

[Nidhi Pollak]

Yeah, you know, we tried everything under the sun. Right. So we actually got some really good advice when we first got started. So we had a couple of mentors and one thing that we learned pretty early was they said, look, you build wealth in real estate by owning real estate for a long period of time. You don't create wealth in real estate by buying and selling constantly. Right. So that became sort of our motto is like, all right, whatever we're going to do, we're going to buy real estate and hold onto it for a long period of time.

[Ashley Kerr]

You chose brrrr strategy. Most people are if they don't do a brrrr, it's because they're scared of the rehab process. So maybe they choose a different strategy. How did you become comfortable and confident in managing contractors, managing rehabs to actually be successful at implementing the burst strategy?

[Nidhi Pollak]

Yeah. And I think that is really one of the hardest part. Right. As you said on the burst strategy is like how do you manage the rehab? And especially like the way we do rehabs is we don't have to be at the job site every day. That was again like one of our things. We didn't want to be there every day. And even doing a lot of DIY projects, we're definitely not doing DIY because that just takes up so much of your time and not great ROI on that. Right. We could easily outsource it. So the key is to really find good contractors and you have to talk to at least 10 or 15 contractors to be able to find the right one. Right. And kind of knowing what kind of rehab you have to do, so figuring out what is the right level of rehab even. Right. Are you rehabbing it to flip, which we were not, or are you only rehabbing it to put it just a little bit of paint on the walls where it it really to be able to bur it needs to be somewhere in the middle. Right. It's the Goldilocks Zone. It's like not too much rehab, but also not too little rehab.

[Palak Pollak]

And so knowing who your stakeholders are, right? Like you need to know who, who are your stakeholders? Who are you doing? Who's your end customer that you're rehabbing for? So one of them is of course, your tenant. You want to make sure your property's appealing, comfortable and safe for your tenants for that area. Right. What's, what are the other products that are being offered and how to make your product stand out for the right price? But then the other stakeholder in the bar strategy is the appraiser. You want to make sure that your property appraises to where you want to do appraise so you can get the cash out that you need so you can move it to the next deal and the next deal.

[Nidhi Pollak]

And again, like, you know, once you learn the skill of how to estimate rehabs, right. And you will, mistakes will be made along the way. Right. And so that's why we always say whenever you're coming up with a rehab estimate, always put 10 to 15% contingent at the end of it because you know that your rehab is always going to go. There's always be surprises at every rehab, right. There's steps that you can take to minimize those surprises. Things like doing a home inspection and knowing ahead of time what surprises may come up and then building that into your rehab budget. Right. Getting two or three different quotes from two or three different contractors. So you can really kind of vet that you're actually covering everything and not missing anything and you're getting a reasonably good quote. Quote.

[Palak Pollak]

And knowing that contractors are creatives, they're creatives. You have to be the one to manage the project well. You have to be the one to keep things organized, document things and make sure you're, you're staying under budget and on time and you've hired this person to do the work. Once you take ownership of that, it becomes a lot easier.

[Nidhi Pollak]

Yeah. And one more tip, if I, if I may. So, you know, it's, it's really having a good boots on the ground is so critical, right. Like having somebody who can be your eyes and ears, who can visit the property a couple of times a week, maybe three times a week, sending you pictures and videos of what's going on. And they're an independent third party so that they can be unbiased. Unbiased. Right. As the rehab is going on. And so, you know, having that really ensures that the property, the rehab is coming along well. And also paying your contractor in certain facts, phases as and when the rehab gets done. So don't pay 50% up front to your contractor because a lot of people do that. Right. And so paying the work, the contractor for the work after it's done and having it inspected by a third party is really, there's so many safeguards that you can put into place. But ultimately, as you said, Ashley, like, it is still, you know, a risk, but at the end of the day, that's a skill worth mastering and you will make mistakes. But Burr is such a forgiving strategy in that sense that it's not like a flip where if you go over your budget, then you're going to lose money on that property. Right. With Burr, you can do a cash out refi. Maybe you get a little bit less equity up front, but because you're keeping holding onto it for a long period of time, you can refi in two or three years when the equity goes up and the property value goes up, and then pull that cash out eventually.

[Tony J. Robinson]

Now, Nidhi and Palak have already given us a glimpse into their framework for scaling, but how exactly did they implement this system? So up next, they're going to share specific strategies they use to literally double the size of their portfolio, including the commercial financing techniques most rookies never even think about. But first, a quick message from today's show sponsors.

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[Ashley Kerr]

Okay, welcome back from our short break. So Pollock, you mentioned the appraisal process and how this is also a key component of doing the BRRRR strategy. Can you give us some tips and tricks as to what we should be focused on for an appraisal? Like what? Increase the value of the property?

[Palak Pollak]

Yeah, that's a really good question. I think that the big thing is you have to really understand what properties are being appraised around where your property is and at what amount. So doing that comparison will allow you to know what rehab you should be doing. That's the easiest way to figure that out. Right. And then knowing that when the appraiser walks in the door, you want to make sure that they're wowed. They want to look at a property and be like, yes, this is a fully renovated property. So a lot of times I notice that people, especially bar investors, they say, oh, it's a rental, so we're only going to do this or that. And that's not going to wow your appraiser. And that's not going to make them appraise your property higher. Right. You want to make sure they walk in the door and, and they feel like it's a fully renovated property. We also recommend preparing a document for your appraiser that you can send to them. Because most appraisers, the way they work is they're going to be on the field, you know, running around doing their site visits certain days of the week. And then certain days they'll sit down and they'll sit at their desk and they'll prepare the reports. By then that Appraiser's already forgotten about your property. They're going off of their pictures and some of the notes that they took. And so what you want to do is you want to prepare a document and give it to the appraiser that lists everything that you've done to the property. Really nice pictures. Because sometimes the property is already rented out by the time the appraiser goes in. And then you are at the mercy of how clean your tenant is and how tidy they're keeping that place. Right. So you want to have nice pictures for the appraiser that are professionally taken before the tenant moved in. And providing them that packet is going to allow them to really view your property in the light that you want it to be seen.

[Nidhi Pollak]

Yeah, every time. By the way, we've sent that, we've increased our appraisal by 10 to 15,000. Right. Just having like a documented. Here's all the work at it. Here's a breakdown of. We update the kitchen. This is how much it costs us to do all the upgrades. This is the before and after pictures. These are the relevant comps that we.

[Palak Pollak]

Think put in the comps in there. Because you don't want the appraiser to choose their comps. You want to give them, Nudge them. Nudge them. And very respectfully. Right. You're just giving them all the information. Then it's up to them whether to take that into consideration or not. But preparing that really helps. And if you're local, don't be afraid to go meet the appraiser at the property and learn from them and ask them questions like what all. You know, what all do you need? I've also noticed a lot of times appraisers don't go into certain parts of the property if nobody's showing it to them. So if you give them a list of items. There have been times when appraisers don't realize there is a garage or there is a mudroom where there is an entire laundry area, unless you list it. Right. Especially in these rentals, when you're renovating old homes, they prepare certain areas, like the washer, dryer. We're going to get creative and put it somewhere. Right. And so the appraiser may not even know that they need to go there and check for. So listing all those things really helps.

[Tony J. Robinson]

Yeah, I think one of the best things that a rookie can do as they're starting the rehab process and they're eyeing a refinance on the back end that's going to require an appraisal. Is to try and get your hands on other appraisals from that local market. Because if you can see, hey, here's an appraisal that was done last month, and here's the. The radius that the appraiser used. In some markets, maybe the radius is only a quarter of a mile. In other markets, maybe the radius is five miles. Like, I know for me and like my suburban neighborhood, the radius was literally like a quarter mile. But in Joshua tree, where I invest, they've used comps that were seven miles away. Right. Because it's a different landscape. So knowing the radius, how does the appraiser account for variance in lot size? How does the appraiser account for variance in bathroom count? How does the appraiser account for variance in condition? And you can make some guesses, but if you can actually get your hands on something, I think that's one of the best ways to really educate yourself on how appraisers in that market work.

[Ashley Kerr]

I actually just had an appraisal done. I just got it back two days ago. And I'm always learning something new by looking at the appraisal. So this appraiser, the property, it didn't have a first floor bathroom except for in the master bedroom. So there was actually a $4,000 deduction in value because there wasn't that bathroom that was accessible to the common area. And it was like, under the functionality part, the line item. But, like, that was something I'd never seen before. I guess this is also probably the first house that hasn't had a bathroom that. That, you know, isn't in a master bedroom. But there's just little, like, unique things there that I wouldn't even think of that an appraiser can deduct or add points. This property, too, had a basement, and about 40% of the basement was finished and a bedroom was added in there. The bedroom value in the basement was only worth, like, $4,500 compared to a bedroom on the floor, first floor, or second floor above. You know, the grade was, you know, like $7,500 per bedroom in value. So, like, just seeing these little tiny things and how these little thousands of dollars in different places can add up or decrease your value.

[Tony J. Robinson]

A lot of the appraisal is it's like more art than science. Right. And you could have two appraisers go to the same exact property and come up with two different opinions of value. So needy park, I guess. One question for you guys. Have you. Have you ever had to challenge an appraisal? You're doing your, your refinance in the back end, the value doesn't come back where you anticipated it would, and you've had to go back and try and get the correct value. Have you guys ever experienced that? And if so, how did you deal with it?

[Nidhi Pollak]

Absolutely, that, that'll happen, you know, if you, if you're investing a lot, that'll happen a few times along the way. Right. And so, you know, when it does happen, couple of things you, that you could do that we've done. Right? So one is you can respectfully challenge the appraisal. So you can kind of send back an email to the appraiser and to the, to the lender to kind of say, hey, look, you know, these are the comps that we think that really reflect the kind of work that we've done in our property. And this is what we think the real value really should be. And again, having that appraisal document up front that you give to your appraiser does help kind of, you know, put your point across even before they write up the report. But you can kind of say, look, you can, you can definitely challenge that and do it respectfully because if you, they're under no, the appraiser is under no obligation to go back and, you know, increase the value. Right. So they, if you, if you're kind of rude or if you could be like, hey, this is, you don't know what you're doing. This really should be. This. They're just saying, no, thank you. I'm good with where I'm at. Right. And so be respectful when you're kind of, when you're requesting sort of a, you know, change in the appraisal. But if it doesn't happen, then another thing that you can do is just either ask the lender if you can order another appraisal. Now you'll have to pay for that additional appraiser, whatever it is, 5, $600 for a different appraisal. So that will come out of pocket for you. But if that can increase your value by a few thousand dollars, it's going to be more than worth it.

[Tony J. Robinson]

I know we spend a lot of time on appraisals, but I think it's such an important part of nailing the brrrr process is being able to actually achieve the appraisal that you want. So we appreciate you guys kind of breaking that down for us. But the next thing I want to hit is your scale framework. And I know that you guys have put this together and it kind of underpins how you both have been able to build your portfolio so quickly. So let's just kind of go through what exactly the scale framework is. So the S, what does the S stand for?

[Nidhi Pollak]

S stands for scalable acquisitions and deal analysis. And let me, before I jump into that, if I may offer just like a quick. Came up with a scale framework, right? Because sort of what does it mean? And so when we first sort of started doing brrr, we noticed that people, there is no one way to do brrrr. People are doing brrrs in many different ways, right? Depending on the kind of rehab they do, who does the rehab, how they finance it, you know, how they even look for deals. Some people were becoming wholesalers so they can get the best deals, whereas some people are like, let me become a contractor so I can save money in the construction piece. So there's many, many different flavors of burrs. So we're like, okay, how do we do implement burr in a way that makes the most sense for our lifestyle and how we want to build our business? Again, kind of going back to time and location freedom, building it in a way that we can build systems and processes and teams and scale fast. And scale fast, right. So that's kind of how we came up with the scale framework. And that kind of defines every step, defines how we specifically did every, implemented every step in the BUR process. So S stands for scalable acquisitions and deal analysis. So that's the buy part of the process, right. So a lot of times people will look for deals in multiple markets or they'll look at all the deals that are coming to them. But I don't think that's the right way to do it. So the right way to do it is kind of put it backwards first. Really figure out which market and which zip code you want to invest in and then identify your specific buying criteria or your ideal property avatar. Right? It's like really figuring out, is it a three bed, one bath you're trying to buy, is it a condo, which, which are, which we advise against, right? Like condos have HOAs and you really don't want to do that. But you know, really defining what your ideal property avatar is. It should be a three bed one bath or a three bed two bath. If you're just starting out, it's really good to start small. Don't start with a three unit or a 10 unit building because that's gonna, you know, that takes a lot of learning curve. So start with like a small project, three bed, one bath. You know, you say, okay, I'M going to kind of find a property that needs a new kitchen, a new bathroom, new flooring. Right. And then once you do that and you narrow it down to say one or two zip codes, that eliminates 80% of the deals that are out there. Right? So now you're only focusing on the deals that make sense for you for your strategy. And then start looking at deals and then the deals that come to you will be. And then when we start looking for properties, we tell all the wholesalers and all the realtors, we know, like this is the kind of property we're looking for in the zip code. So we get all the deals coming to us that are actually what are buying criteria.

[Palak Pollak]

And the more specific you are, the more you're going to stick in their mind. And now they know that you're not just somebody who's dabbling in real estate. You're serious about it, you're very specific about your criteria and that allows them to send those deals off to you. And so, yeah, having that predictable deal analysis and then building that deal pipeline, getting very specific on your property avatar.

[Tony J. Robinson]

I think just one follow up question to that because you hit on an important point that you guys are focusing on the business of scaling, not necessarily the business of finding off market deals, which is wholesaling. So how are you identifying the wholesalers that you end up working with? Are you going to Facebook groups? Are you going to local meetups? Like, like how are you identifying these wholesalers? Where, where are they all hiding?

[Nidhi Pollak]

So you know, it's all of those things, right? So if you were. Once you decide which market you're investing in, say you're investing in Philadelphia, I would go on a Facebook type in Philadelphia. Real estate investors, there'll be a few Facebook groups that pop up. A lot of them will have anywhere between 5 to 10,000 members, something like that. Join as many Facebook groups as you can. There will already be both investors and wholesalers in those Facebook groups. You can just post a question there. Hey, I'm looking for wholesalers. Would you recommend some. And then they'll be some people who recommend wholesalers or there'll be wholesalers who will introduce themselves. Right? Just build a network of wholesalers. Like just your first goal should be to give your email to as many wholesalers as you can. Now when you do a deal with them, you do want to vet them, right? Because wholesaling is the wild west. There's not really a lot of rules around wholesaling. And like there is around realtors, there is no Rules around really. It's a very new industry. Industry. So you have to be careful as to who you're doing deals with. So you make sure, if you do a deal with a wholesaler that you vet them and you check for references and you make sure they're legit.

[Palak Pollak]

Never wire money to a wholesaler.

[Nidhi Pollak]

Yeah, yeah, yeah. There's. There's things that you learn, you know that. And to anyone really. Right. You really want to make sure that you're, you're sending money to the right people and all that. But, but yeah, first goal is to get as many wholesalers, as many lists as possible. Facebook group, Google, you know, local meetups, all that stuff.

[Palak Pollak]

And yeah, and you're right, it's unregulated. So you want to make sure you vet the wholesaler, ask for references, make sure you're involving a title agent and an attorney if this is your first time. Also, if first time investors, we always recommend for first time investors, it's okay if you pay a little bit more for the property wholesaler. Working with wholesalers and buying off market deals. That's for your second, third deal, first deal. Make it as predictable, as simple as possible.

[Nidhi Pollak]

Yeah. And we, by the way, still do 50% or 40% of our deals through MLS. Right. So we're not.

[Palak Pollak]

There are some great deals.

[Nidhi Pollak]

So there's really good deals if you know what you're looking for. Again, if you have a good buying criteria, these deals kind of come to you.

[Palak Pollak]

Yeah. Our first brrrr. We found it actually in a Facebook group and a wholesaler had posted it and he said that there is a really a cute grandma's house up for sale. It needs work. Does anybody want it? And I remember, we went and saw it and we. So I'm gonna. Is it okay if I tell you guys the story? It'll take two minutes. We went and we went with our contractor to look at this property and this wholesaler is a pretty big name, so they hold open houses. So there's like 20 people looking at that house. And they do this because they want to make sure that everybody feels like they need to jump on it right away. It's a good tactic. Right. So we went there. We had no idea how to do any of this. So we went there with our contractor and they were like, if you want it, we need a check for $5,000 written to this title company. And we're like, oh, we didn't even bring the checkbook. Our contractor lived around the corner. So he went home and he called his Wife. And he's like, can you write a check for 5k? He went and got that check, he gave it to them. And he was like, don't cash it, please. This is just to hold the property. We went home, we wired the money, and then we were like, can you send us a picture of that check torn up? And that's what we did. And of course we still work with that contractor because of that.

[Ashley Kerr]

Yeah, I mean, wow, what a nice contractor to do that for you.

[Palak Pollak]

So, yeah, so I mean, you know, you learn these things along the way and build your team who'll back you up when you need them.

[Ashley Kerr]

So let's move on to the C. What does the C stand for?

[Nidhi Pollak]

Yeah, so C is the construction without the diy, Right. So this is the rehab phase in Burke. And really the key here is knowing what kind of rehab you're doing. So again, looking at comps before you even start the rehab or come up with a rehab budget, look for properties that sold in the area that are going to be that you're trying to make your property sell for. Right. So if you're trying to sell your property or get your property to ARV for let's say 200,000, look for properties that are sold in that zip code for around 200,000 that were rehabbed. Right. So you'll see. Okay, this is how it did the kitchen, this how did the bathroom. So you can now have a template to follow to say, okay, if I redo my kitchen and my bathroom and the flooring, that's what gonna give me the $200,000 ARV. So figuring out what your property is gonna look like, getting quotes from your contractor, building it that 10 to 15% contingency, and then really putting systems and processes in place to be able to manage your rehab. I think that as we talked about earlier is really, really important. So having we have a WhatsApp number of our contractor, we're always using that for them to send pictures and videos as the rehab is getting done. And same thing with the boots on the ground, right? So having those systems and processes in place to manage your rehab really, really helps. And again, our goal is to have a nice comfortable place. We put in nice flooring. We always have a template. So again, thinking about scaling, we have a template so our all our kitchens look the same in all our buildings. Right?

[Palak Pollak]

Because they look exactly the same.

[Nidhi Pollak]

We went through once and selected the best looking cabinets and the best looking appliances and the countertops and the flooring. And once you figure that out, you don't really need to change that. So everything is down to a science and all the contractor has to do is just be like, all right, follow the list.

[Tony J. Robinson]

Let me ask, I think one of the bigger challenges for a rookie is finding a good contractor. So let's say that we dumped you guys in the middle of a brand new city, somewhere you didn't know, somewhere you didn't have connections, somewhere you didn't already have contractors. Where are you going to identify the right folks to work with?

[Palak Pollak]

Yeah, yeah, Nidhi has a really good hack on finding contractors.

[Nidhi Pollak]

So one is of course, you know, you could go to, go online and look for, you know, you can go to Facebook groups, you can Google, you can look at, you know, Angie's website. It's called Angie's now instead of Angie's List, you know, there's different websites that you can look for to get a list of different contractors that you can, that you're going to call. I never work with the first one. Like always call 10 or 15 contractors. One really cool hack that Palak was talking about is, you know, depending on which city you live in, you can go to the county website for that city and you know, search for a house that was recently renovated. So find a house on Zillow that sold for say $200,000 or whatever the amount you're trying to get your property to look like. Put that address in the county website. It'll come up, you know, it'll kind of show you sometimes what the permits are for that property. If it were, if rehab was done on that property and in the permit is the name of the contractor. Right? So now not all, not every house is going to have a permit that was rehabbed. But it's a really quick way. Like if I, if I did it right now, I'd probably in an hour I'd find at least 10 to 15 contractors using that. And I know these contractors are doing business in my neighborhood because that's how I found them. I already know what their product looks like because I saw the pictures of those properties in Zillow and you know.

[Palak Pollak]

They pulled the permit and they didn't.

[Nidhi Pollak]

Swing it exactly right. So another plus is you want to be, you want your, your contractor to pull the permit so that you do that and you'll come up with 10 or 15 contractors. Call every single one of them a few questions. You want to ask them how big is your crew? You don't want somebody who's just like a one man army because it's going to take forever. To finish your project, at least two or three people on their crew, if not more. You want to ask for how much do they charge for a kitchen and a bathroom? And then compare the rates for different contractors to make sure you're not getting charged a lot. And tell your contractor that you're trying to do a rental note, not a flip, because that also kind of makes a difference in the materials they use.

[Palak Pollak]

Yeah.

[Ashley Kerr]

So we've talked about the S, we've talked about the C, and now we're going to talk about the A for Ashley. So is it. You need to become friends with Ashley, you need to listen to Ashley. What is the A?

[Nidhi Pollak]

The A stands for adding cash flow. Right. And so this again goes back to figuring out how you can maximize the rent for that, for that house. So are you deciding the right kind of finishes? Like for instance, we always put in a washer dryer in all our properties. Right. We always put in stainless steel appliances, we always put in brand new cabinets and granite countertops. Because again, those are small things that don't cost a lot, but they really look good and they attract a lot of great tenants. So how do you get your listing to stand out is by picking the right finishes that don't cost a lot, but really maximize the rent that you can get.

[Palak Pollak]

And then how do you know adding cash flow is all about how to manage properties in a way that not only maximizes your rent, but also makes your tenant happy without you physically answering all their questions. Right. It's all about how to get out of the way and have a team manage your tenants.

[Nidhi Pollak]

Right.

[Palak Pollak]

And that's how you can scale the bar process is by not becoming the property manager. But, and if you are the property manager, still having a team in place that does all of the day to day operations of, of managing your tenants.

[Nidhi Pollak]

Yes. And you know, one last thing I'll add is having the tenant, like if we find a good tenant, we never increase their rent, like for as long as they're there because we want the tenant. Like, one of the biggest costs that you'll have is the turnover, right. Between. Between tenants and the vacancy. And so if you have find a good tenant, just keep them there forever in three, four, five years if you can. And then when they move out, you can always then increase the rent.

[Palak Pollak]

Yeah. And when we go buy properties that a landlord has owned for a long time, you will find that the rents are way under market. There's a reason for that. It's because they've kept that good tenant at low rent. Because it costs a lot more to go kiss a bunch of frogs until you find another good tenant. So that's what they're doing, right? That's, that's basically what we're repeating.

[Tony J. Robinson]

Well, we'll be right back with Nidi and Pollock after our final ad break, but Ricky's we just hit 100,000 subscribers on the Real Estate Rookie YouTube channel, which is an incredible thing to say out loud. So thank you to all of the rookies for coming on this journey with us. We love, love, love making this content for you. And if you haven't yet subscribed, you guys can find us on YouTube @RealEstate. Rookie. We'll be right back after a quick break.

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[Tony J. Robinson]

All right, guys, so we're back here with Nini and Pollock and we're going through the scale framework and we've already hit the S, the C, the A. So let's finish things off by talking about the L and the E. So what is the, what does the L in this framework stand for?

[Nidhi Pollak]

So L stands for leverage in commercial finance, right? Which is the finance part of Burr, the refi part of Burr. But really it also includes the how do you fund the initial purchase and the rehab. Right. Commercial financing is really one of the most important things if you're trying to scale your rental portfolio. And that's one thing that we learned pretty early on. And you know, Pollock called how many like 90 banks, right? To really figure out. And it takes while it takes a while to figure it out. Like I come from a finance background. It took me like six months to even.

[Tony J. Robinson]

Wait, did you, did you say nine zero. 90 banks, nine, zero.

[Palak Pollak]

So you have to understand we started when it was very tough to get financing for new investors. It's much easier now though. And we didn't know how commercial financing worked. So in calling 90 banks. It allowed me to learn about commercial financing and found a lender that was the right fit for us.

[Tony J. Robinson]

I love that because we talk so often about the power of talking to multiple lenders and getting exposure to different banks. Because every bank, every credit union has a slightly different product offering. So Pollock, when you recall in these places, just run us quickly through like your script. What were you saying? What questions were you asking?

[Palak Pollak]

If somebody wants to replicate this process, it start with a Google Sheet spreadsheet. That's where everything starts in our world. So build a giant spreadsheet to remember which bank I called, what was the number, what was the contact that I talked to? Because the first person you talk to will probably not be the right person. They're gonna ask you questions and then transfer you to someone else. Who I talk to? Who am I waiting for a call back from? And then once I do get a call back, just continue populating that spreadsheet with the terms that they talk to you about and ask questions. And if you're a brand new investor and you don't know what the terms are, then feel free to ask them that, like, hey, what should I consider? There'll be points at closing, there'll be interest rates, there'll be tons of things that they can go over and everybody's slightly different. So as you start, start populating that spreadsheet, you're going to learn a lot and you're going to understand the lingo, right? Like as you start talking to more and more, it's all about repetition, right? And a lot of we hear a lot of new investors feel this imposter syndrome, like, I'm not an investor. How can I talk knowledgeably? Well, it's all about repetition. The more you do it, the more confident you become and the less you feel like an imposter. And then when you call lenders, make sure that you're, if you don't have an email address with a proper website already, go buy a domain name and get a proper email address. So you come across as a legit investor instead of [e-mail], which is fine. But if you want to come across as a legit investor who means business, make sure you are coming across that way by getting that email address. Having a company name, having an elevator, what is it called? Elevator.

[Nidhi Pollak]

Elevator pitch.

[Palak Pollak]

Elevator pitch, where you can explain what you do in 30 seconds. Hey, I'm, my name is Palak. I'm investing in Baltimore area. We're investors, we buy distressed properties, we renovate Them and we rent them out. We're looking for lenders to help us scale this business. Can is are you the right person? Just figure out what you're going to say, write it out, script it out and then once you, once you have that down, you can build your 90 lender spreadsheet.

[Tony J. Robinson]

I just, I want to give a quick hack here because I actually tested this out a couple months ago, but I went into ChatGPT and I said I need a list of 100 banks and credit unions within a 50 mile address of my city. Exclude any national banks like Chase, bank of America, et cetera. It asked me a few follow up questions and then it worked for 62 minutes.

[Nidhi Pollak]

Wow.

[Tony J. Robinson]

Is how long ChatGPT worked on this response. It came back with 100 local credit unions and regional banks with phone numbers, names and websites for each one of them. So if you want to shortcut the building of that list, go to something like ChatGPT. But I think that's an incredibly cool.

[Palak Pollak]

Go to ChatGPT.

[Tony J. Robinson]

Yeah.

[Palak Pollak]

And better yet, have ChatGPT script out your script, your elevator pitch as well.

[Tony J. Robinson]

Well guys, let's finish things off by talking about the E. So what is the E in the scale framework?

[Nidhi Pollak]

So E stands for exponential growth, right? And really if you do everything that we said, which is focusing on there's really three things that you want to focus on to be able to scale your portfolio. One is your deal mastering deal analysis. Because without that it's hard for you to scale. Don't rely on your contractor to do that. For your realtor to do that for you, you really need to master deal analysis. Second is mastering commercial finance. Right? So everything from hard money to when you go to refi really want to master that to be able to scale. And the third piece is managing your team. So managing your contractor, managing your realtor, managing your property manager, learning those skills of how you're going to use them so that they're doing their job really really well and then putting in systems and process and teams along the way that really help you scale. So that's really exponential growth is once you do all these things and as we said, you could build a business just off of wholesaling or just being a construction company. And eventually if you want to do that, you can. But then don't let that get in the way of building your portfolio because ultimately it's about, about creating wealth.

[Palak Pollak]

And every, every, every piece of the board process is its own active business. Like you're saying, wholesaling and construction, all of that is its own active business. Could you build all of those? Absolutely. But should you focus on building wealth and passive income if that's what you're after? That's what we did. That's what the scale framework is all about.

[Ashley Kerr]

Well, Nidhi and Hollik, thank you so much for joining us today on the Real Estate Rookie Podcast. We are so thankful to have you to share your experience and your journey with the rookie investors. Can you let them know where they can reach out to you and find out more information?

[Palak Pollak]

Yeah. You can follow us on Instagram at Open Spaces Academy. That is the best way to get in touch with us.

[Nidhi Pollak]

Yeah. Thank you so much for having us. It was, it was great, great being here.

[Palak Pollak]

Thank you for having us.

[Ashley Kerr]

And will you guys be at BPCON this year in Las Vegas?

[Nidhi Pollak]

Yes, I think I'm certainly going to be. And I'm actually doing a three hour session in bpcon. So.

[Ashley Kerr]

Awesome. Tell us about that real quick. Give us the elevator pitch.

[Nidhi Pollak]

So the elevator pitch for that is really learning. So it'll be the scale framework that we talked about, but in much more detail. Right. Things that are working in this market that you need to be doing right now for every step in the process, case studies of deals. If you've done everything from single family to duplexes to even large 10, 15 unit buildings, there'll be Q and A and you know, like a state of, the state of the market in that as well. Things that we are taking because we speak to lenders every day. We speak to, you know, title agents, realtors, so you know, just what's happening. And, and I analyze deals all over the US and every single, like in many, many markets. Right. So every week, every week I look at like literally 50 to 100 deals. So I have a perspective that I can share on what's going on in each of the different markets. So if you can be there.

[Ashley Kerr]

Yeah, awesome. You can go to biggerpockets.com conference and check it out and we'll see you guys hopefully in Las Vegas.

[Nidhi Pollak]

All right. So you know, there's a, there's a cool freebie that we can give out which if you're interested, it has like a retirement calculator. Because a lot of times we're like, wait, how many rentals do I really need to be able to retire? Right? So having like a retirement calculator that we've built out that says, you know, here's how much my income is right now. If I wanted to replace that, how much, how many rentals would I need. There is a building an investor brand because as Palak said, building an investor brand really helps you attract the right, you know, team members that you're going to hire in the future.

[Palak Pollak]

Also has a plan where you can start from, hey, where do you want to be five years from now and reverse engineer back to what steps, what tangible action you can take today to make that happen. So breaking it down and reverse engineering your retirement plan. So building a plan and then how to take action. And you can use the code biggerpocket to get it for free.

[Ashley Kerr]

Well, thank you so much for sharing that with the rookie community. That sounds awesome. I'm going to have to go check that out. So thank you guys so much for joining us today. I'm Ashley and he's Tony. And we'll see you on the next episode of Real Estate Rookie.