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Structural Issues, Changing Layouts, 2nd Storey Additions With Alex Pal

Structural Issues, Changing Layouts, 2nd Storey Additions With Alex Pal
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George El Masri [00:00:00] It's George El Masri here with a fresh new episode of the Well Off podcast, and on this episode I spoke to none other than Alex Powell, who is a friend of mine. He's a realtor out of Hamilton, Ontario, and he is the owner or co-owner of Powell Property Solutions. So for those that don't know, he's a real estate investor and he works with his wife, Kaylee, who is a real estate realtor, I should say, real estate salesperson. So if you guys have been following for a long time, you'll realize that I interviewed them a couple of years ago. They were one of the first people that I interviewed. And my wife Mandy was on that episode as well. So you guys can go back and listen to that one if you want to find out a little bit more about Caylee. But anyways, on this episode, we talked about Alex's recent projects. So he had an eight unit building that he purchased and he talks about some of the issues that he had in terms of structural problems, some mold, some some damaged beams and stuff like that that he had to deal with. He also had yeah, he's looking at or sorry, he bought a place for himself where he added a second story addition onto the property. So that was a pretty cool thing to talk about, especially because I have a property which is only about five hundred square feet. And I was curious to know what it would be like to add another story to that. And then finally, we talked about his Horder House in Hamilton. So he bought a place where he said he had, I think if I remember, just said 28 bins of garbage in the property that they had to clear out. So if you're interested in learning about different strategies multiunit, you're interested in talking also or learning a little bit about hoarder homes and flipping and that kind of thing. Alex is an expert when it comes to that. So there's a lot of valuable information in there. And if you want to connect, go to well-off Nazia. My contact information is there and you can also download some free reports as always. Well, if that's the way forward slash report. And finally, if you can leave us a review that would be greatly appreciated, whatever platform you're listening on, if it's YouTube or Apple podcasts, leave us a review. Share it with your friends and family. Let's get the message out there. Let's help people become wealthy through real estate. And that's always appreciated. Enjoy the episode. Welcome to the Law podcast, where the goal is to motivate, inspire and share success principles. And for the second time, I'm here with Alex Powell. Last time I spoke to Alex on the podcast, it was actually Kaylee, who is his wife, and my wife, Mandy, who was at the time, just my girlfriend. And then we had a good conversation between four realtors at the time. So now we're catching up again. So for those that don't know, Alex is a realtor and a real estate investor based out of Hamilton, Ontario, and his company, Pål Property Solutions buys redeveloped single or multifamily properties throughout southern Ontario with a goal of rejuvenating neighborhoods and providing safe and reliable housing. Alex, as always, welcome to the show. It's good to speak to you again.

Alex Pal [00:02:48] You as well. And it's very exciting to be back here. I do love your show, Hujer A.M.. So you do a bang up job. It's a pleasure. A pleasure to be on here.

George El Masri [00:02:57] Thanks a lot. I appreciate that.

Alex Pal [00:02:59] So you were you were mentioning the last time we chatted. I remember you brought all your equipment actually to our condo. You kind of had like four of us sitting around with all this gear hooked up and stuff. Yeah, I don't I don't know if James was born in them.

George El Masri [00:03:13] No, I don't think so. No, I think Caylee was pregnant at the time. We must have been pretty early.

Alex Pal [00:03:20] So we've like we've moved into a house now. We've got two kids.

George El Masri [00:03:24] Yeah, I know. Things have

Alex Pal [00:03:25] changed. Yeah. Yeah. And then we met up since then, so I went to hang it up with that one time. But yeah. Yeah. It's nice to catch up and there's Yeah.

George El Masri [00:03:34] For sure. I spoke to Caylee recently actually because I know she's been selling stuff for crazy prices in Hamilton. So yeah I just, I reached out to her to just ask her about something but yeah. I mean that's cool. You guys seem to be doing really well. So how are things coming along for you in terms I know Caylee's kind of handling a lot of the real estate sales and your gear. You're focusing your energy on your investment business, I guess.

Alex Pal [00:04:00] Yeah. Yeah, things are going well. We're we're very busy for sure. I'm going to be focusing a little bit more on filling the backlog in the next little while. But we have seven renovations on the Golan right now. A lot of them kind of spilled over since last year because we are getting now it's like much larger projects, which it's fun and it's interesting. Yeah, it's just there's a lot of exciting stuff. And then Kaili, like we just had Nathaniel middle of the summer. Yeah. And it's the march right now. And Kelly is like, we can't keep her, we can't keep her still. She just wants to go on freshfields. Yeah. Yeah. Just doing remarkably well.

George El Masri [00:04:45] So so I just, I just I know because Mandy's always has has thought about that in the past, like in terms of, you know, being a realtor and potentially a mom at some point in the future. So how is Caylee? Handling it, I know this isn't necessarily irrelevant for everyone listening, but I'm just curious to know what's what's Caylee been doing to adjust to being a mom and a busy realtor at the same time?

Alex Pal [00:05:13] Well, she makes it look easy. I know that it's it can be taxing. I know that sometimes it's easier and easier said than done. So I'm kind to say, yeah. But she clearly has a very good approach, like just handling stuff better than me, 20 percent. Like, things just kind of roll off. She's what she is. She's a very good real estate agent. She really is. Whereas like when I was a real estate agent, I like going there and I go to do a job. Like my job is to sell your house. I'm going to crush it and try and get you the most amount of money I possibly can. Granted. And then once I'm done, I say, OK, perfect. Like if I can help you out, Caylee, by the time she's sold the property, she's also Krushchev. But then the whole family is coming over for dinner or at their children's christening or something. I'm like, yeah, you know what? And she just has that kind of personality or it's like it's very infectious. So people just love to be around her, which is a part of the reason, like what you saw in me. But I'm just grateful for that. But honestly, no, it's how she handles it and stuff like that. We do have support here, right? We do have administrative support and things like that. So for her, a lot of the a lot of the the major like times is communicating. Right. And that's that's the biggest factor for any sort of like really high level of real estate agent is how effectively they can communicate with the clients, with other agents. And so she's just dynamite. She gives people the time of the day for that. And I think that that's the only part that becomes challenging for her. But she does it with such ease that it's hard to imagine for for her. I think what would be harder would be not working because she's somebody who moves and shakes. She doesn't want to just be at home. And like I of course, we have we have help at home, too, which is extremely grateful for. And we are now looking into daycares and things like that to just make things a little bit easier. But I mean, when you look when you're in an entrepreneurial state and you're used to going out and doing things, it's hard to just be at home. And I'm sure of my my I tip my hat to all the moms out there who are of that kind of like being a stay at home parent is a full time job. It's very challenging. Yeah, for sure. There are days where, like, I'm at home and I'm at home. And then when I do this, every single day consists of me. Yeah, well, I mean, maybe it's different if you're not running a business. Maybe it's different if you're just, you know, just that that's all your focus, because I think that you can really make the best of it and try and, you know, focus a lot of the attention on it. Whereas I feel like even when I'm at home, I'm fielding calls and stuff like that. So I'm kind of not present in both. So I prefer when I am home and just kind of shut it down so that I could be with the kids. And just like so I'm there and enjoying naptime. I like try and get like 20 things done in like an hour and a half time frame. And then once they're awake, it's like, all right, I'm done. Yeah, yeah, yeah. But we make it work, so we're good.

George El Masri [00:08:27] Obviously you guys have a lot on the go. Tell me a little bit about your ongoing projects. I know you said you have a couple and I also heard you on the Andrew Hines podcast talking about a multiunit you bought. I don't know how long ago that was, but you had like some structural issues and stuff like that that you don't like. So, yeah. What do you want to go?

Alex Pal [00:08:46] So we have an eight unit apartment building that were renovated. That's the thing we were talking with Andrew Hines about. So we actually we bought this this idea that, you know, Brian Casti. Brian, what are you, Brian? No, it is a real estate agent as well, so him and I bought it together. It was our first delve into the higher echelons, higher caliber of mortgages. So we bought the property together and we kind of like doing a big bird is what it is. It's no different. You're adding literally, you're adding a zero to every number of bathroom rentals, like five thousand dollars. Well, now it's fifty thousand dollars. So mind you, it's only eight units. So not only it is a unit, so it's there's a lot to be said for what had to go into it. So the levels that were existing were just atrocious. You'd walk into this imagine like six hundred square feet, each unit, something like that. And they were set up as a one bedroom plus. It was like a living room that you could kind of like close the door to. That they were claiming was a second that which it wasn't because then there was no living spaces. And and Leggate, like I'd say, probably a quarter of the unit was made up of hallway. So you can walk into this massive hallway that would then, like I'm looking at it, would shrink down like that and then go into another hallway which would open up into this tiny little kitchen. The kitchen had enough for like an oven and like 30 inch wide cabinet resting beside it. And that's all there wasn't on the fridge was kind of floating in the middle of the living room area and and the floors were off. So you could it was like a moldy smell and stuff like that. And it was just I don't know, it was a gross property. Lot of drug activity there, too. And all that, as we're talking with a lot of the. A lot of the people that lived in the unit and also neighbors and stuff like that, as places just like this place will be a cesspool for all of it. So, yeah, but anyway, when we bought the place, the first floor tenant had conveniently just called the city on the previous owners, not knowing that the place is so there, there's no sign on the front that. So we had bought the property. We went to go visit the next day and there's a sign plastered on the front thing saying that the property was under investigation for structural issues because literally from one end of the of the one of the units to the other, there could be like a two inch difference. Yeah, it was like pretty substantial. Right. Here you go upstairs and. Holy crap. So we had to do a lot to jack the place up and get all the floors to be some level. Even now, like you can tell, it's not like a fresh, clean new build, like straight as an arrow until it's kind of like it's ninety nine percent better than what it was and we're happy with it. So kind of laying down the floor now, but it was just a it was a much larger job in that respect. And that's why I'm glad we took it on ourselves, because, you know, dealing with the multivalent is a different process. It's a different expectations from the inspectors. Our inspector in this particular one is like. Crazy, she's like, you know, I know she's doing the right thing and I'm not I'm not saying anything negative there, but, you know, making us make sure that we have the proper nail patterns above our heads from, like a nonstructural, a load bearing wall. It's like, come on, man. But anyway, it is what it is. So we're going through the motions regardless. And now what we do is we create a big opening concept, two bedroom unit, and we've gotten rid of all the mold. We've gotten rid of all the rot, all new plumbing, all new electrical. It's going to have all new bathroom fixtures going to have on the kitchen appliances. Everything's going to be top to bottom new. It's going to be delayed. So very, very excited about it. And so, yeah, we bought this thing for about one point one five and we're putting into it about half a million. So we're going to be in it for like one point six, five, one point seven. And then we're expecting like a two million dollar buy at the back end or an apple paradise or the back end.

George El Masri [00:13:09] That's cool. I had a couple of questions about that. So, one, moving forward, is there like a certain us, I guess, just a way for you to identify what it would cost to repair? The foundational issues or is that just always a case by case basis, like did you learn anything that can help?

Alex Pal [00:13:30] No, actually there was no actual foundation issues here because it's actually like it's it's a crawl space underneath. It just has like a foot of a big footing. Everything sits on the wall. So as your question was, is there anything I could have learned from this that I can apply moving onwards

George El Masri [00:13:50] to to really understand what it would cost you in the future to repair these types of problems if you have a similar issue?

Alex Pal [00:13:57] Yeah, for sure. I think that is it just comes down to like that experience. So it's like, OK, now I've been there, done that, got the T-shirt. It's not like let's frame up a basement of a duplex or something. It's not that like our framing on this job along with I think like one hundred and ten thousand or something like that is a big framing budget. But that we also coupled in like structural steel beams that are like going across like half a unit structure of steel beams go across all eight units and they have these massive footings poured into us. So we coupled that all into like framing the bathrooms and like took down the drywall. And then you just flick it can go like this and you can crush the two by four in your hand just like crazy. So you're having to deal with all the lot and deal with all the resistance of beams and Joyce that have been just brought in or cut out or God knows what's been done. So that all kind of falls into like the framing bucket, you know. I mean, for sure.

George El Masri [00:14:59] Yeah. And the other question that I had for you was, did you go down? Did you go with private financing on this on this type of project or did you end up going with some some more conventional financing?

Alex Pal [00:15:11] We went through VMO on this one. OK. So they actually. Yeah, they allowed us to do it. It's only for the first six months, I believe, and then converted into like the actual mortgage to give us a bit of a head start on the windows. Yeah. Yeah.

George El Masri [00:15:28] So did you, did you get a construction loan of some sort or do you just use your own funds for the Renaults.

Alex Pal [00:15:35] Just our own funds.

George El Masri [00:15:36] OK, OK. Did you explore any, any options to to go to grab some construction financing.

Alex Pal [00:15:43] Yeah. I mean we have resources we could have gone down in case. But like once again this was one of those properties where we were kind of unsure what we were walking to do because we were a little bit like I wouldn't have been like now I would be very comfortable joint venturing a proper like this, you know, Parmeno. But the first one that you do and and once you realize that, like from a simplicity standpoint, there's not a whole lot of different aspects. But you have to you have to anticipate some of the things that are going to be different than what you would do in a simple like do. So I think once we've got a good grip on it now and it's like managing anything else, it's just dollars and cents. And you have to make sure that your forecasts are correct and make sure that you have the money in the budget. And then still you're trying to save money on every single line item. Your budget is much more robust, right? It's a lot then a lot more to the budget. And that's basically how I like to do it. Maybe other people, I think, is a little bit different. But you don't know exactly how much we're planning for, like appliances, for drywall, for all the stuff. So consistently we're there on they OK, we have X amount of dollars for appliances. How do we save an extra five grand on that line item alone that compiles is compound?

George El Masri [00:17:08] Sure. So if I understand correctly, you bought it as a property. I had eight one bedroom units and you're converting all the one bedrooms into two bedroom units. Yeah. OK, is there any other way for you to add value to that building aside from increasing the the units or not increasing the number?

Alex Pal [00:17:30] I don't think so. We're putting this laundry into all of them. The only other way would be to the coin month or something, but there's no space for it. It's not like you walk into this lobby. It's not a basement that has like this, like what's called a utility area, or you find the building. If you imagine this here and this is like this is the ground level and here is the building. Yeah. The there's actually behind the building. There's an underground section. So you have to leave the building, go underground. And then that's where you get into the boiler room, the world of the like the plumbing type stuff is. So it wouldn't be practical to have laundry or something down there. So I'm pretty sure we've made this unit. It's definitely the highest and best use possibly can be made into. Yeah, yeah. The only like. Not at all. I couldn't think of anything else to do that.

George El Masri [00:18:24] Well, you've done enough, right? It's not to say that you haven't done enough. You've torn the building apart and rebuilt it.

Alex Pal [00:18:29] So maybe if we have some sort of approval to put a fourth story on it, because the fifth story or whatever. Right. But even then, I think that at that point we need like elevators or something like that, so. Right. Cool. I don't want to go down that road.

George El Masri [00:18:44] Yeah, that's awesome. And the goal is to, I guess, hold on to it long term after refinancing

Alex Pal [00:18:49] it for sure. Yeah, we have the same kind of mentality, Bryan, myself that kind of works like we both have kids. This is something that our kids can take over when they're, you know, I'm okay to hold onto it forever because it's going to be cash flowing like I think we last we did the math is like three or five thousand dollars a year or something like that. Is pretty cool. And that's great. And then, of course, it's paying itself down. And if we can create CMHC mortgage financing and it's like a mind blowing.

George El Masri [00:19:17] Oh yeah. For sure. Yeah. And you touched on building another story on this. I believe at one point I saw that you bought a property. I think it was a bungalow and you turned it into a two story. Am I right?

Alex Pal [00:19:32] Yeah, that was our personal house.

George El Masri [00:19:34] Oh, it was your personalness. OK, can you tell me a little bit about that?

Alex Pal [00:19:38] Yeah, totally. So we did a second story on the price of this property was in Grimsby and like a dead end street. Funny enough, I'll tell you the back story of how I found that at the time I was working on Nathans team. So that listing specialist, OK, and so. We are kind of calling around the area, just prospecting for future listings, and I call this guy just he's in the area of a listing that we have so far. Hey, my name's Alex. I'm just curious if by chance you would have thought about selling your house maybe now or in the near future. And his answer was, I think about it all the time. OK, I said, OK, so like, ding, that's when the light goes off and you're cold calling. Like you've just gone through a series of one hundred no's. And that's something like, OK, is this person interested? So then you probe with the following question, say, OK, if you don't mind me asking what's why are you hesitating, make a move. He's like my property garbage and nobody would want it. And I was like, things like that is like crosses too awesome. Like checkboxes for me personally because I love shady properties. But anyway, so we were talking and he was kind of a little bit like standoffish standoffishness. You can understand. Like I could be anybody who's known me, madam. So I said, listen, your partner is actually on my way home. Do you mind if I drop off a little package to you and just tells you who I am and then see, like, I'm a real person, I'm not just some person who's calling from God knows where this is, again, a problem. So remember, I dropped a package off of this place and they were going down the street to a secluded. It's very nice. It's quaint. And so we end up buying the wind up sitting on point because I was like, do you mind if I actually am going to go along with me? Because it was dark when I went over there were not dark was like getting to be dark. So it's not like I could see the place anyway. So I told them I would come by actually to go to the park and I love to bring my wife along. And so Chilian, I just and him, we all three of us just hit it off. And the guy was awesome. He absolutely loved us. And so I think he was really excited that because we're like, listen, this guy's name is Joe, like, we would love to buy this property off yet. And so he's like, we were excited about it, but his whole family got involved and was just fine. No doubt. I was probably in those like early seventies, late sixties. But he had lost his life and I guess everybody felt an obligation to get into it. So they had got like three different realtors and stuff like this to try and get quotes. And they were pulling in one direction another. So he told me that at one time and I was kind of like crap. I think like I think this one might be fizzling out on us. We're gonna have to keep an eye on it does come on the market, make sure we can get a bead on me or something like that. And then all of a sudden we get this email and it's in my inbox said, listen, like my family is driving me crazy. I told them that this is the price I want. It was hard. We had kind of talked and verbally with him is like, if you can get me an offer for 60, the deal is yours. I was like, the the paperwork's coming to you in five minutes. So I sent him the paperwork and then we so yeah, we bought the deal and actually it was really nice. I'm closing date. Him and his whole family was there and we got a chance to walk through the place. Everybody and everyone kind of gets a lot of them had gone up there, but it was I think that they were all really, really happy that it was us that was moving into that, because at that point, we we had jeans and stuff like that already, too. So we brought him along. So they were very excited. But anyway, that's kind of the back end story. But moving on with it, like this was about a thousand square feet in itself, three bedrooms, one bathroom, kitchen and the living room, a thousand square feet. And then so here's the property. Beside the property was a detached garage. And at one point they had built the breezeway through the garage and the house, non insulated. It was just kind of like a be fact. You didn't have to walk out into the elements. And he had like a bit of a fireplace in there where he would hang out kind of thing. So we took the entire roof off the garage, the breezeway in the house and went up the full second story. Cool vaulted the one part of the house. So the actual floor to ceiling is like thirty five feet or something in one part of the house. And we built these full beams and it looks really cool. Yeah. So that'll be over some fences.

George El Masri [00:24:14] Yeah. Can you tell me a little bit

Alex Pal [00:24:17] about a very interesting renovation.

George El Masri [00:24:19] Yeah. Can you tell me a bit about what the permit process was like and like some of the costs involved with adding a second story to a to a bungalow.

Alex Pal [00:24:30] Yeah, the process was terrible because we are on the entire statement, so we had to first get approval from the Irish government commission. And so I remember that and I got married on September seven and we got the permanent start. We got approval from the Irish government commission that we were allowed to apply now for a permit on December 17th of that same year. So it was, I guess, three months. And then at that point, that's when we were allowed to go for a permit. So then there was still a bit of back and forth of that. Then we also have to get a septic permit because we're on septic tank. So we had to redesign that. So that required environmental engineering. So a bit of back and forth there. But once the bills started to happen, it was pretty straightforward. We had a real reframing from there to kind of reject the whole project ourselves is what we do anyway. So big ticket item was like the framing for it to make sure that we did the actual framing and once that once it all came together and once the walls came up, it's funny, you look at a project like this and you kind of get intimidated just because of the sheer size of it, just because a lot of building to space unknown. It's not like having a shell and just like drywall, you're actually creating more space. So there's this there's this unknown factor of like, oh, I wonder what, you know, how to accommodate this. But once the shell of a property comes together, it's really no different than any other innovation portfolio. So it was great. The whole thing cost us three hundred fifty thousand. That's including a including the septic. OK, so

George El Masri [00:26:19] was it was it like a price per square foot type of thing or not?

Alex Pal [00:26:25] I don't ever calculate that, no. For me, it was like I got Electrical Data Concordat. I could probably look at all that and then determine, well, if you're

George El Masri [00:26:33] I'm assuming you added a thousand square feet, right? You just doubled whatever you had. Oh, eighteen hundred. Because it was about yeah.

Alex Pal [00:26:41] It was about a thousand square feet. So we added another eighteen hundred because we built on top of the garage space. Yeah, yeah, yeah. Yeah it's ok. Yeah. So I mean even as twenty eight hundred square feet in total because even the problem is, is that when you factor in the price per square foot, the bill also didn't incorporate like we didn't do a new foundation in waterproofing around the foundation, but it was also the main floor walls were also also completely done already. So I'm sure we just hate them with like what they were called. But like they like they use like two by six exterior walls to bring bring to the main floor level up. So instead of having normal eight percent think the main floor, we have the 10 facilities or something like that. Yeah. So. So I mean, we're 20 so let's say three hundred fifty thousand dollars by an eighteen so. Divided by eighteen hundred, I mean, but one hundred ninety four dollars a square foot. Yeah, but that doesn't that's that's only if we're building that extra eight hundred. But no, we still have to finish the thousand square feet. So yeah.

George El Masri [00:27:56] But just to kind of get a park ballpark idea, it did end up costing you just about two hundred dollars a square foot to add the second story.

Alex Pal [00:28:08] No. Well yes, yes and no. I don't think that's the right it's not a good analysis because if you think about it, the main floor also had to be completely redone. If you imagine we're rewriting the timeline. I mean, yeah. So if the entire square footage is twenty eight hundred square feet and it costs us three hundred and fifty thousand dollars to do that actually is a buck twenty five a square pleasure I get. But if we're looking at the upstairs in itself four hundred fifty then that's two hundred. So what I would say is because we didn't have a foundation because we didn't have to do a lot of that kind of stuff, we're probably somewhere in the middle, maybe like one hundred and fifty bucks a square foot. So that's kind of where I would sit right now. Yeah, we were pretty we're pretty good. Not not to mention, too, like we end up doing some of the stuff ourselves as well, like the decorative beams, like some of the future kind of walls and onto the fireplace building that. I thought that myself. Yeah. So different elements of the party we contributed to in different ways. So that definitely helped out to some of the cost. I would have driven things up, but yeah.

George El Masri [00:29:22] Yeah. The reason I'm asking or that I'm extra curious about this is because I have a bungalow in Hamilton. It's literally a one bedroom detached bungalow that's about five hundred fifty square feet and it has an unfinished basement. So like there isn't really much opportunity to add value other than to maybe build a second story.

Alex Pal [00:29:47] When you picked that up,

George El Masri [00:29:49] I bought it two years ago,

Alex Pal [00:29:51] just how much for how much you

George El Masri [00:29:54] bought it for one eighty two.

Alex Pal [00:29:56] Oh, yeah, dynamite.

George El Masri [00:29:58] Yeah. So it was pretty good. Yeah. So I've always kind of thought about adding another story or the other thought is why don't I just sell it and then re use the money for something else instead. Like what's, what's the better option there. So for now I'm just kind of leaving it, letting it increase in value and see what happens.

Alex Pal [00:30:16] You just rent it out from it.

George El Masri [00:30:19] Is it is rented. It's tended to. Yeah.

Alex Pal [00:30:21] But definitely if you're going to sell that before, in my opinion it's going to sell it as is. That's one thing. Then you're just allowing another investor to profit from that. Right. And he could probably make something cool or make the property already like spit shined in this current thing so you can get it its highest and best use as it stands now when you're not having it. That's the whole crap, the money that I have, right?

George El Masri [00:30:46] Yeah, exactly. Yeah, I see what you're saying.

Alex Pal [00:30:49] Yeah.

George El Masri [00:30:49] Yeah. So I know you guys like I think you posted recently about this property that you bought that was like a serious hoarder house and it was just filled with garbage left, right and center. So can you tell us a little bit about that project? What was that like? And maybe you can share with us some of the numbers and what it cost you to renovate it, would you? And what you ended up selling it for?

Alex Pal [00:31:12] Yeah. So did you see the video actually for so it was on the news as the worst hoarder house, which is pretty kind of proud about the city. But yeah, we bought this property, the Musella, just like he wanted out here. I think that what happened is we saw it on the news, so we went to go drop off a card at the house. And I think that at the same time, he saw it himself on the news. OK, I think he might have panicked and just was like, I need to get rid of this. So I came to the house to Sarkhan and he's like, I need to get rid of this house and I need to close in like a week. And I'm like, OK, come on over, let's talk details. So, you know, we we figured out he only wanted one hundred and fifty thousand, so. Yeah, no problem at all. So we bought it. So we the demolition in itself, just removal of garbage, not demolition was twenty eight thens. Wow. Philbin's so like they were taking out like dead rats. There's one hundred and twenty kilograms of human feces. Wow. Yeah. Was just like there's a open kerosene containers, propane tanks. It was like, it was just like a bomb waiting to happen in any regard. So did you, you would walk up to the windows on the outside the house and you'd look at the windows and it was like it was like hot summer weather. And you could see, like, I don't know if they were like lice or like fleas or whatever that were just like buzzing around the windows and then on the inside windowsill in broad daylight for the entire like whatever like an entire community to you were rats eating the lights of the windows. I've got a video where I'd walked up to the window and there's two rats eating the lights off the windows. I've this is mind blowing. It's so crazy. And like, I felt bad for the guy totally. Because you could tell, like, very unassuming. You never assume that this and we kind of he actually left us a ten minute, like, testimonial video about like how quickly or to react how because we also found like a bunch of heirlooms that he had that were buried in there and we fished out for him. We actually we found his passport. We found a blanket that his daughter had made him from back home. There was a bunch of stuff that, like we kind of helped them go through. So his goal was just to take the money, buy a Winnebago and just go across country, just retire happy. That was his plan. Yeah. And so but it was sad. We realized I was cleaning the place out. You could tell someone had lived there in that, you know, and some and he was like, that's it. It's like fighting the elements, not like water coming in, but like raccoons coming into the house, rats middle of the night. You know, it's just a seeing of nightmares. Anyway, we got the place all cleared out and we like top to bottom renovation. It was like I think the whole thing cost us like one hundred eighty thousand dollars or something like that. Just renovations. Yeah. For a single family, that's pretty like it's a big chunk of money like inside

George El Masri [00:34:32] because you had some run run beams and stuff like that as well, right.

Alex Pal [00:34:37] Yeah, it was, it was, it was bad. So just a lot of saturated water from like soggy stuff sitting for a long time. Yeah. And. Smell the smell was like the words like it, like embedded itself in the lumber. Yeah. So you have to go through and like, we sprayed it twice for, like, insects and three times for, like, ozone type stuff. It's like a fog machine that comes from every corner. And as soon as you go in there, smells like baby powder after it's done. Yeah. So it's actually really cool. And like you also imagine you've got to kind of keep the crews that you're working with kind of at a simmer as well. Oh yeah. They go into a properness things like, oh hell, they'll just say, no, we don't want this job. There's so much work out there. Oh yeah,

George El Masri [00:35:25] this one for sure. So we have incredible crews. But to cut you off just very quickly, that ozone thing, you have to do it twice because from I've never actually personally used one of those machines. But from from my research, it seems like they usually work on the first try, like they do a great job and done.

Alex Pal [00:35:43] Yeah. Yeah, we did it. We did it once before the drywall came down just to get like a good coating of smell cover. OK, and then once we put the drywall off and we took the insulation off and we had a whole clean slate, we did it one more time. I mean, for the cost of like an extra five hundred bucks to it twice, it was worth every penny because like, once again, like, you got to imagine the people that are growing and digging this place out, like you want to make their life a little bit better. Yeah. Yes. Yeah, so, yeah, it was a while. So anyway, we put everything top to bottom, like electrical, plumbing, each HVAC, you name it, the drywall, the flying in the air within five minutes. So after it was all said and done, I think we sold it for six hundred and forty five, six forty two or so, six, 40, something like six for this.

George El Masri [00:36:42] That's pretty good. So you so you bought it for one fifty. Let's say you put in two hundred between renovations and closing costs and whatnot. So you're in for three fifty and you sell it for six forty. It's pretty, pretty good. OK. Yeah that's very well. Yeah that's great.

Alex Pal [00:36:59] Yeah. Yeah. You don't come across this every day. That's why I'm often hesitant to share the numbers because then everyone expects that like oh I'm going to go make a quarter million a flip. Yeah. Just for the viewers, if we do a thirty thousand flip, it's not a bad flip. Yeah. Just so you know. Yes. For sure. But when you're remember, it all comes down to a return on investment to it. Like if I'm putting one hundred and eighty thousand dollars into renovate something and I make thirty thousand dollars, that's terrible. So just keep that in mind as well. Right. So it just goes down to how much you put into the deal.

George El Masri [00:37:31] So, you know, I guess that also it depends on how long it takes you to make your money. If it takes you like two weeks to make thirty grand on one eighty, that's not that's not too bad.

Alex Pal [00:37:41] Yeah, yeah, yeah, yeah. At that point we'll say when do you just not sell it on the market. Like if I was going to make a hundred grand on that deal and I knew that after renovations I would have just listed it after having cleaned it out and then made one hundred then. Yeah but we want to take on the renovation property. Not too.

George El Masri [00:38:05] Oh yeah. For sure. So change of use. So you've done that I think a couple of times where you take like either a single family or a duplex and you add additional units. Did you have any any recent experiences doing that and anything you can share?

Alex Pal [00:38:23] Yeah, sort of. Our first time doing it was we converted an old swarmy hut into a into part of what was a legal triplex. Yeah. I think we may have talked about. I think

George El Masri [00:38:35] so.

Alex Pal [00:38:36] But on the last one. Yeah. We got expropriated from the government. Not while I'm still sour about it. I look at it now and I'm like, oh it's going to be worth so much more money.

George El Masri [00:38:45] So what happened to it? Because that was for the LRT and then the project got canceled. So what happened to that property do?

Alex Pal [00:38:52] Well, it's still there. It's boarded up, I'm pretty sure every piece of copy has been stripped clean out of that place for sure. And but to be honest, I don't I don't really know what condition know where it's at right now. It's been neglected for so long, it's all boarded up to the most recent change of use that we've done. So we bought a property in Wellington. It's a five unit. Sorry, it was a too commercial and residential. And on the main floor, one of the commercials was a convenience store, and the place beside it was actually a laundry parlor with the laundry mat above it was two, three bedroom units. So the property was unique in the fact that the building in the front that was on the corner of Helmes and Regions, it had this convenience store, a laundromat behind the building was a detached little dinky property of the property, I think is six hundred and twenty feet two stories. So to imagine just how small the square footage is, four square feet of Florence next to nothing. Yeah. So we just got in on just a couple months ago. We got granted the severance. So we've actually cut that property to be separated from the Helmes property. So we bought both in competition on the market. Yeah. For two hundred and eighty six thousand. Yeah. And so we're going to flip the property about 30 grand into the house portion and we're going to flip that one on its own for about 250.

George El Masri [00:40:35] You should. Yeah, I would imagine you can get that maybe even more than that with the way things are right now.

Alex Pal [00:40:40] I think so, yeah. I'm hopeful, optimistic and I will remain realistic. You I will remain status quo and be pleasantly surprised, say, for that method than hoping for the best and preparing for it. So the the other building itself, the too commercial to residential, we're actually converting it to five residential. So we got approval from the committee of adjustments for that as well. And so the problem we face with it was when you're doing a change of use, you have to go to what's called a registration of site condition. And so registration of site condition typically includes a phase one environmental as well. The barrage of other crap that the city needs from you, including like you got to do, like a historical search on the property back like one hundred years to see all the uses, yada, yada, yada. So it's it's above my my scope of knowledge of what is required. But I know that the court end up pumping out is like one hundred plus pages of like everything that this property has involved with. That part of the reason you need this is because when you go to a commercial, to residential, you're actually going to a more sensitive use. So I'm not sure if it would apply in the reverse direction. I think it would. But that being said, I keep hearing the more sensitive views. Right. So I get it. So I guess that the part that kind of irks me is that the the property or when we first went through the RC process is tedious and especially Jenko, that it takes forever. Yeah. And they told us that we would only need a phase one to be done on the property. And it makes sense why phase one would need to be done. Because you think it's a laundromat. It's like when you have a lot of dry cleaners. Thank you for importing here. Then you have a dry cleaners. There's a chance of contamination within the concrete, within the soil or whatever they need, saturating the ground if there was any spills. Same if there is like there's a gas station and a close proximity to a property and there's some sort of leakage of like gas, they want to make sure that there's no contaminated soil. So for a laundromat, it's usually not a big deal. There's no gas stations around. So it wasn't going to be a big deal. They were like one hundred percent. It doesn't need a place to. So we went through the whole process of a phase one. And then the the city pushes back was to say, no, we want to phase two. And then they refused to said, listen, there's no dry cleaners, they said, or dry cleaners very close to what we were doing to the laundromats, very close to the dry cleaners. So hence we are going to require this from you. So super frustrating, very expensive. Phase one customer, five grand, all in phase two. You can add another fifteen thousand dollars on top of that. So anyway, and of course all the time and all that. So effectively what that's done is just delay the process because they won't release the permanent unless we have an approved receipt should. So we are where we are there now, that being said, we always start on our projects before we get permits just because we need to make up some sort of headway. So a lot of the interior planning is being finished. We've already run some interior plumbing to try to make some headway. But all in all, it's going to be good. Now, the people who say the property behind us, the detached presidential one that runs off to almost finished that one will planning to go on the market hopefully in the next month or so, having. Cool, cool. Yeah, I'd love

George El Masri [00:44:26] to see that sometime. I have I have some places down and like, well, in St. Catherine's. So I'd love to come by if you're ever around or whatnot and have a look and see what you're what you're doing out there.

Alex Pal [00:44:38] So let me do a video for years as I left there. Yeah, sure, sure.

George El Masri [00:44:43] That's so cool that you because I remember seeing that property. I remember looking at it. I actually looked into possibly buying it, but I just I would have done the exact same thing. You did convert that commercial into residential, but I had never done anything like that. So I kind of shied away from the project. But you did so well with that. Like, just to think that you were able to buy it for that price, that house alone that you're going to sell. Realistically, it's probably going to go over three hundred, maybe even like three fifty or whatnot.

Alex Pal [00:45:15] I don't know. No, if it's going to like I would be, I think an optimistic look would be like in the high twos, I think realistically like it would be to 50. Yeah, even though it's detached, probably it doesn't have a backyard. That's why it has parking later. It's six hundred and fifty square feet. Sure. It's a tiny, tiny little house. So if it was like a full detached property that was just crushing it on the same street as on the same type as all the other ones. Yeah. Yeah for sure. We'd be probably even in the forest, but yeah, the property just isn't conducive of it. But we're going to go all out like we've all any wiring or new plumbing, new appliances, new kitchen place looks really kind of cute and cozy. So it's going to be a great home for somebody. Yeah. Cool.

George El Masri [00:46:01] Yeah. Good luck with that. Yeah. Like I said, I'd love to have a look and I know we're kind of running short on time here. So before we move on to the next section, is there anything else you want to touch on? Anything we forgot to talk about?

Alex Pal [00:46:16] No, I think that it's I mean, all in all, it's there's all kinds of exciting stuff. I know. You know, what I'm excited about is to talk about the next projects, you know, and and we have a couple coming down the pipeline. But I feel like that. And I mean, so ingrained in these projects, you know, when you put a lot of effort into to a couple of things and you're just excited at a certain point to see them done. Oh, I'm so excited to see these properties in operation. And just because the cash flow on either one is going to be exceptional and it's going to be a you know, it's going to be a game changer in terms of like the passive cash flow that we are expecting in our lives. And that's what it's all about. Like, you know, I think about this business in itself. I know a lot of real estate investors especially get caught up in what I like to call the pursuit of more and just more more. And we go to like this deal. We have a couple of 30 deals. You know, it's like, why why are we doing this? What's the point of it? So for us and our family, like our values, are very much passive income and freedom of times that we can go and experience bigger, different things. So I think that as you go through the stepping stones, we have to work through the sludge, through the swamps a little bit, and then you come to the next one and then becomes easier and better and faster. You that are trades and better systems and things. So I think that the only thing that I would want to touch on is that I'm excited. I'm excited for the next steps because it's that's it's fantastic. It's a challenge. I love what I do. And I think I would share the same things. And obviously, you know, so do you like, you know, even talking about it gives us a tremendous amount of energy and passion. And I think that's really cool because we're doing good things up there. We're repurposing housing. We're adding places for people to live. And if you can make it lucrative and then why the hell not, right?

George El Masri [00:48:16] Oh, definitely. And the really cool thing is like seeing the growth, just having met you a couple of years ago, maybe two or three years ago, and then during that episode with you, when you lived in our condo, like you mentioned, you know, we didn't have any kids. And then to see where your businesses are today, where you guys are as a family and then same same with us, just to experience that growth and to see it happen simultaneously is pretty cool. And I look forward to continuing to see or to see where you continue to go and to continue to to grow with you guys as well. So I appreciate you sharing your time. Yeah.

Alex Pal [00:48:53] Yeah, I know it's a it's a it's a pleasure for us to. It's very mutual.

George El Masri [00:48:58] Yeah. Great. So let's jump into the random five. I'm going to ask you five random questions and you just tell me the first thing that comes to mind. Number one, what? Two, totally normal things become really weird if you do them back to back.

Alex Pal [00:49:13] What what would you say? That's kind of question.

George El Masri [00:49:16] Yeah, OK, maybe get away with wearing tights professionally in a professional setting.

Alex Pal [00:49:22] I've always wanted to do that. Yeah.

George El Masri [00:49:25] There you go. Yeah. So that's that number three. What's the weirdest thing you found lying around or sorry. Lying on the ground.

Alex Pal [00:49:35] Weirdest thing like

George El Masri [00:49:37] that that you found lying on the ground.

Alex Pal [00:49:41] I think the list is literally endless. We demo, but some of the worst cases and this this last probably we're doing right now, we found a dead cat. Well, that it was like super disgusting, a super disgusting. He found the box full of porno, actually posted it on my Instagram. Yeah, so I'd say that's probably the weirdest thing. Some very, very questionable pictures as part of this porno collection. This was not just like your your standard a grade, you know. Yeah. It was like there are definitely like peering deep within themselves. Good for them. But I think it always is pretty hilarious to delve into that, you know. Yeah.

George El Masri [00:50:31] OK, there you go. Number four, what's something that I don't know.

Alex Pal [00:50:39] You don't know. Do you know that I speak fluent Hungarian?

George El Masri [00:50:44] I do know that because I see videos of you talking to your son sometimes in Hungarian.

Alex Pal [00:50:50] Yeah, OK, partial German. My German is really crap, but I can understand a lot of it. OK, what else would you know. Oh yeah. I used to teach Hungarian folk dance. Oh cool.

George El Masri [00:51:04] Interesting, I've no idea.

Alex Pal [00:51:06] So we actually like you. Yeah, it's a good old party. A lot of fun, actually. It's not like your typical, you know, hoity toity kind of dancing. I'm not like a river dancer, like wearing Russian dancing either. It's very it's like I like salsa, but like more Eastern European. So, yeah, it's actually how my parents met my dance group.

George El Masri [00:51:29] Oh, nice.

Alex Pal [00:51:31] OK, cool. So I grew up around it.

George El Masri [00:51:33] Yeah. That's something I didn't know for sure. Number five, where is the best place in Hamilton to have a picnic.

Alex Pal [00:51:43] That's police in Hamilton to have a picnic. I say we got some pretty sweet areas here in terms of the waterfalls and stuff like that, but to have a picnic, I would say like maybe like Gage Park or something. And I think they I don't know if I would want to be completely secluded for a nice picnic. It kind of like Gage Park. Sometimes you can go there and there's like stuff happening around. So I would probably lean more towards that than I would somewhere completely. But there's like some really cool areas, like in the Devil's Punchbowl and stuff like that. And yeah, you can get some pretty cool sightseeing and stuff like that. So there you go. Yeah. Yeah man.

George El Masri [00:52:26] So that concludes the random five if you want to tell people how they can reach you and what services you provide for sure.

Alex Pal [00:52:35] So if you guys are looking to get into real estate investing, the one thing I would recommend if you go on our website, W-W Powell Property Solutions dot com there is actually at the top right hand corner a place where you can get a free book. And I wrote it. You can download it. It's I, I read it like in grade four level, so it'll probably take you an hour to read it. But I've gotten a lot of really good feedback from people who are really trying to get into that. The tell tale like I don't have any money or I don't have any time or I don't have to experience this kind of flush. So what should you do if you fall into those situations and then let me know what you think about the book? That's that will be step one, how to get your foot in the door of the book itself. It's called Getting Your Foot in the Door. The other thing is the services that we provide, we we provide opportunities for people that want to get into investing, don't have time, don't have the resources and don't really know how to execute, but have cash that they want to invest and can qualify for a mortgage. The two important factors. So if you have money that you want to invest and you can qualify for mortgages and give us a call, and we'd love to talk about future partnership opportunities and how we can build your net worth without you having to do a single thing. Beautiful thing.

George El Masri [00:53:54] There you go. Awesome. Alex, thank you for everything you shared today. And it's always nice chatting with you. And I look forward to seeing you possibly in Weland at some point in the near future.

Alex Pal [00:54:03] Yeah. Yeah, absolutely. Yeah.

George El Masri [00:54:05] So good luck with all your projects and we'll talk again soon.

Alex Pal [00:54:09] Thanks again for having me.

George El Masri [00:54:10] Just take care. Thanks once again for listening to another episode of the Well Off podcast, just want to remind you that if you do appreciate the content, all I ask is that you comment, maybe like it if you can, on the platform that you're listening to it on and finally share it with friends and family. I'd love to get the message out there and it would mean a lot if you can share it. And finally, I just wanted to offer you as a valued listener, a free copy to the roadmap to real estate investing, which is a document that I've put together which helps you identify what strategy would best suit your needs at this current time. You go over certain things that are included in this document step by step, and it'll hopefully provide you with some clarity. So have a look. You can go to w w w well off Dossie forward slash guide. Download your free copy.

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