How to Scale Your Real Estate Portfolio: Insights from Alex Pal

Michael Stansbury (00:02.922)
Hello everybody and welcome back to the Real Estate Pros Podcast. I’m Mike Stansbury today, special guest north of the border, Alex Pal, how are you Alex?

Alex Pal (00:14.722)
doing great man, thank you so much for having me. I’m excited to be on here.

Michael Stansbury (00:17.854)
We’re excited to have you, but first we’ve to pay the bills. Investor Fuel, the sponsor of the Real Estate Pros podcast. At Investor Fuel, we help real estate investors, service providers, and real estate entrepreneurs 2 to 5X their businesses to allow them to build the businesses they’ve always wanted and to allow them to live the lives they’ve always dreamed of. Alex Powell, I like this question to go off first is let me ask you,

What got you started in this wonderful world of real estate? What was your origin story? What were you doing maybe before you got in? what brought you to this wonderful, this crazy and fun, sometimes infuriating, profitable industry?

Alex Pal (00:57.742)
Yeah, oh yeah. Yeah, good question. I started probably, was just getting in like end of high school getting into college and a cousin in law of mine was just bought a rental property. And I was looking to, I had an old beater car. He was an auto mechanic and he let me fix my car in his shop whenever I needed to.

And as a kind of a payback, I was like, listen, if you need some weekend labor, I’ll come help you paint some walls. So I did. And while I was there, he’s like, you should read this book, Robert Kiyosaki. Check this out. I’ll make this much cash flow after this. And I was like, this is like mind blowing. So my background education is engineering, mechanical engineering. But all through engineering school, I was reading anything I could about financial freedom, creating money that works for me while I was sleeping. So I became kind of obsessed with this whole thing. And that’s kind of how I built my network in university.

I still have a lot of buddies who I deal with now who have kind of started on that trajectory as well. So that’s what got me hooked on this idea that, you know, how to scale. If you trade your time for dollars, you make $40 an hour for an hour, 80 for two hours, it’s only going to get you so far because you only have so much time in a day. So the idea of going exponential was super cool and super attractive. And so, yeah, that’s brought us to where we are now. And now I’ve actually left my engineering job

over 10 years ago at this point.

Michael Stansbury (02:20.883)
Wait a minute, but you paid all that money for a degree in engineering. What kind of stuff are you talking about here? That’s not cool.

Alex Pal (02:24.404)
I know, who would have thought?

Alex Pal (02:29.738)
Yeah, I can design the diesel engine or I can show you the thermodynamic cycle of a gas engine, I can’t. What good is that nowadays, right?

Michael Stansbury (02:40.615)
Well, it has its place, right? So what’s interesting about your story is you’re trying to, again, you’re trading time for money, but you’re doing it in a way where you’re actually bartering so you can get your car worked on. And then you get introduced to Robert Kiyosaki, so many of us. I don’t think there’s a real estate investor that hasn’t read that book because it’s so instrumental in unlocking things in your brain. And it obviously unlocked a couple things.

with you. So from that book, kind of tell us what was your first deal, how did that origin of the first deal happen for you. We know what happened to your friend, you watched him do it, and you’re like, well if he can do it, I can do it.

Alex Pal (03:24.184)
Yeah, no good question. So I remember I was this poor agent, I ran him through the gauntlet. But when I was actually ready, had paid off my student let like hyper quickly paid it off. And I was like, gotta stop renting, I gotta start buying something that I can then rent out. And so I think I went and saw like 150 properties, like, ridiculous, a poor guy, but finally stumbled on one in the Hamilton Mountain, bought the place for 186,000. It had unfinished basement, small, tiny little two bedroom property and

I spent my evenings and weekends kind of figuring out how the plumbing worked. added a bathroom in the basement. I had another bedroom with a rec room. And then I rented out the upstairs rooms and I was living in the basement and I was making 600 bucks a month living in my own house. And I was like, this is incredible. This is like crazy. So I jumped over to the next one where I officially did like my first duplex conversion. And that was amazing too. And then got into my first flip, worked my ass off all summer on this flip and

me and a partner made 256 bucks after all was said and done. So, but, but that was the university. So my tuition came back. Trust me. I, paid, paid hard for that one. But after that flip, the second flip that I did and taking all the lessons from the first one, that second flip was enough that it exceeded my full year salary at the engineering job that I was working. And so it was like, okay, I got to get closer to the face of real estate somehow. And

Michael Stansbury (04:29.097)
But the lessons.

Alex Pal (04:53.25)
You know, at that point, I had two mortgages and yes, they were being covered, but I wanted to make sure I had some consistency in my income. So I ended up getting my Realtors license and I joined a high performing real estate investing team and eventually then branched off on my own with my wife, Kaylee. yeah, so now we’ve scaled our own portfolio. We have investor clients and the whole gambit.

Michael Stansbury (05:15.465)
Wow, and tell me about the timeline. When did all this start and now where are we in 2025? What was the timeline?

Alex Pal (05:23.118)
Yeah. So I’m thinking about my first place. I want to say maybe 13 years ago. so, you know, married or engaged, I guess, seven years ago, married six years now coming in September. And so we’ve scaled up from that first property that I bought, you know, obviously, Kaylee’s come in and we’ve not done a lot of stuff together and she’s been wonderful in terms of just a life partner and a business partner too. But we’re at like 220 doors now.

which is pretty cool. And we’ve spread out all across Canada. So we own properties in Alberta, Edmonton, Alberta, for people that are familiar. It’s like the Texas of Canada in terms of our oil sands and things like that. The majority of our portfolio is here in Southern Ontario. And then we also bought and own property in New Brunswick, which is on the East coast. And yeah, we’ve dabbled actually in buying in the US as well. We were buying in Columbus, Ohio, did a few flips out there, which is a lot of fun actually. I really, really enjoyed it.

I think that’s the next phase for us actually is like, not sure if you’re familiar with Canadian real estate prices, especially in Toronto. Toronto is one of the highest priced locations in the whole world actually, I think next to Vancouver, which is also, you know, another city in Canada. Our real estate here is ridiculous. So what I can buy in Columbus, Ohio, for 150,000 on the Hamilton Mountains 800,000. So the

The numbers don’t really make sense. So it’s really hard actually for like new investors to get into. It’s hard for home buyers. You know, I know that the affordability crisis in the U S and some States is bad. Like, you know, no, no first time home buyers jumping into New York city right off the bat and buying a detached house, but still, you know, with Canada having like a substantially less in terms of like their metropolitan areas where the businesses are centered.

it makes it very challenging because those high price real estate are centered around what like eight major cities, whereas in the U S every state has a major city. So it’s a big difference.

Michael Stansbury (07:24.442)
So yeah, so it looks like you guys, because of the affordability, maybe transitioned to buying more in the US. What are some of the other differences, because you bought in the US and Canada, besides obviously pricing and where they’re densely located, acquisitioning properties in Canada, loans, what are the big differences between the US and Canada when it comes to the execution of a deal?

Alex Pal (07:50.383)
question. So when we’re buying properties here, we don’t use title companies like they do in the US, we use lawyers. So transactional lawyer will take care of our stuff. Some areas, I’m speaking precisely in Ontario, we have something called land transfer tax. Now, states have similar things like when I was buying in Ohio, I think my tax to purchase was like 300 bucks. In Ontario, and I’ll get more specific when it comes to Toronto, we have a land transfer tax that

operates on a percentage basis. So if you buy a $500,000 property, your land transfer tax on that is like $12,000 or something like that, maybe slightly less. Toronto has double land transfer tax. So if you’re buying a $500,000 property, now your tax just to purchase the place is probably in the $20,000 range. And so that’s a huge difference. And it’s a cost that sometimes is just like, it’s totally a money grab. It’s just the way that the city kind of keeps perpetuating this like,

real estate cycle and keeping it expensive, but it is just something you got to get used to. So we’ve now started to buy out in Alberta where there’s no land transfer tax. So it doesn’t apply across the country, but it would apply for example, in Ontario, if people are looking about Ontario, make sure you know, there is a land transfer tax and it sucks. the other component is of course, the landlord type of rules. That’s a super important one. And that’s actually why moving into the US is so attractive. And now

I truly I pray for reform here in Ontario because investors are leaving in droves because the landlord tenant rules are so skewed towards the tenants. But we have similar backlogs to what you’d hear about in like California, where it’s like, you’re not getting a hearing date for five, six months, you know, it’s very pro tenant. So that’s been a challenge to navigate here in Ontario.

But once again, you know, as a part of my diversification play, we moved a bunch of our business out to Edmonton, Alberta, where they are very, like, very fair, you know, it’s not even becoming pro landlord, it’s just being fair. So that’s a that’s part of our journey in terms of like diversifying within the realm of real estate. Because to put in perspective, I actually have a mentor of mine who lives out in Pensacola, Florida. Amazing dude, Bob Preston.

Alex Pal (10:10.098)
And he mentioned that if you’re looking to do business, you have to do business in a place that you can execute your business plan. And it seems like such an obvious kind of tidbit of information, but it’s like, why would you do business in a place where you can’t actually effectively execute a business plan? And in multifamily real estate, for example, when you’re buying a residential apartment complex and you have to bring rents up and everything is rent controlled.

can’t do that. You can’t do renovations properly because you can’t justify the costs unless you’re going into major like, you know, you’re infusing a ton of capital, in which case your return on investment goes down and then people look for better returns elsewhere. So it all weighs out at the end. But one thing that we’re actively doing here in Ontario still, if we have a property management company, we still have a big chunk of our portfolio here. But we do do a lot of flips here. So that’s a big source of our income, big source of our of our

Michael Stansbury (10:40.732)
Right.

Alex Pal (11:08.51)
work. So we have four flips on the go right now. Two of them actually will be wrapping up very quickly. And we’re just kicking off the other two. So that’s that’s a ton of fun. I love that side of the business that speaks to me.

Michael Stansbury (11:20.368)
Yes, I love flipping as well. Flipping, that’s what we do here in our town in Memphis and it scratches the creative edge, but it’s also very fun when you can do some big deals. Now you mentioned Bob, do you have any other, for our audience and kind of for you getting the information and education in real estate, do you have any coaches, mentors or networking groups that you’ve been a part of that have kind of helped you in navigating the world of real estate?

Alex Pal (11:50.377)
Yeah, actually, I was, so when I first started, I got into fortune builders. That was a little while back. And, so I, I got my feet wet with some of their, you know, their repair analyzers and stuff like that. They came into Canada for a brief stint. I kind of subscribed and then they kind of fizzled out of Canada, guess maybe too much red tape, but I got a lot out of that. And I think that regardless of where you are, like I’m a huge advocate for like the masterminds, like you guys are advocating for like.

I think that whatever the case may be, it’s always you put into it. So you can pay 20 bucks to a fortune builders and you can sit there and beg, it was a waste of money and it’s a ripoff and the whole thing is a scam. The truth is it’s not a scam because there are tidbits of information, all these things that that one nugget can make it 20 grand. And it’s hard to, hard to believe that it’s hard to acknowledge that.

can actually twist it in a little bit of a different way. I’m sure a lot of people, a lot of your audience have read a lot of these like real estate oriented books. And you notice that the first like two chapters, like Millionaire Real Estate Agent, like the Keller series, like, yeah, Gary Keller, that Millionaire Real Estate Investor, sorry, the blue book, the first like chapter is all about mindset. And you look at all these other books, it’s all about wrapping your brain around this idea.

Michael Stansbury (12:58.875)
Gary Kelly, yeah.

Alex Pal (13:10.178)
And I find even myself when I got into it, I was like, screw this crap. I just want to get to the nuts and bolts. Like show me exactly what I need to do to get there. And nowadays when I’m reflecting, I’m like, all of that is at the beginning, like all of it. And so if you have a decent mindset towards growth and, and it’s so hard to do because you don’t know it until you know it and then you don’t know what you don’t know. So it’s like, how do you get around that? But I think that, you know, that

I mean, from gratitude, like having a growth oriented mindset, those kinds of things and being open to receiving certain bits of information. That’s where it’s like, that’s where you 10x, you know? So that’s just my two cents.

Michael Stansbury (13:48.872)
I couldn’t agree more. So I paid in my real estate career probably three or four hundred thousand dollars in masterminds, personal coaches. so I’ve always thought, and it never fails, like, man, this is a lot of money. And then what happens is that just get that one, I just get one, I usually get multiple things, but this one thing that I didn’t wrap my head around.

I understand it now because I saw it in action, I saw somebody else do it and I was like, oh, if that guy can do it, I can do it. And then I do it and then I do a $100,000 wholesale that I never would have done because my mind wasn’t ready for it and I didn’t, you know, I wasn’t ready to receive it. But it’s one of those things is when you do commit to something, you end up going, okay, I’m gonna extract whatever I can out of this.

Alex Pal (14:29.774)
100%.

Michael Stansbury (14:43.963)
so I can apply it in this area of my life in business or my family or relational because I’m putting money down so I better pay attention. So yeah, you nailed it. So it is one of those things where people, like people have probably read Robert Kiyosaki’s book and they’re like, yeah, not for me. don’t think that’ll work. And they’re right, it won’t because they won’t work it. won’t work the, they won’t work.

the principles and if you don’t work the principles you’re not going to get the result. So it’s interesting too. So you also manage your own property and you manage property for others there in Canada as well.

Alex Pal (15:23.234)
Yep. Yeah, we have a full service property management company. we deal with renovations already for our flips. So we have all the resources. I don’t think that there at this point, there’s anything I haven’t dealt with when it comes to house. Like I’ve dealt with the termites, the cockroaches, the crackheads, the fires, the water damage, the everything. So, I mean, there’s legit nothing we haven’t come across.

Michael Stansbury (15:42.915)
yeah. Yeah, you sound like, that’s hilarious. Crackheads. Crackheads in Canada. We got them in Memphis. And so I had to deal with them. So that’s so funny. the, know, and I, you know, I think every real estate business, construct, property management business especially, but they need to nail construction. If you don’t nail construction, if you don’t nail, you know, your SOPs on construction, especially when you’re flipping, you know, you can get in a world of hurt. But if you do nail it, if you take the time to really

Alex Pal (15:49.902)
Yeah.

Michael Stansbury (16:12.103)
curate that, then you’ll never not win because there’s always deals out there that you can take advantage of and put and add value and then put them on the market. And that’s kind of what you articulated earlier because of rent controls and Canada’s kind of grip on being very nice to tenants and kind of thinking the landlord’s really out to screw everybody. You know, you’re able to win in that realm while I guess they figure all that stuff out.

Alex Pal (16:37.71)
It’s interesting too, like one important point about the real estate industry as a whole, is it’s so beautifully vertically integrated. I’m sure there’s other industries that are similar, but I find real estate in itself can, it’s so easily like kind of like stacked together. For example, I have a real estate license, so I can then go help a client purchase a property and then I can pass them to our real estate property management team that can help them with leasing, any sort of maintenance.

they got to get the unit up to snuff, we can help them with construction, you know, so we can deal with that as vertically integrated and that same partner can borrow that property out, pull out a huge chunk and decide I don’t want to do that again, but I’ll lend it to you. So then we can deploy that money through our other so it all stacks so beautifully together where it’s like your and that’s why real estate is also unique is that your competition is actually a client is actually a vendor. It’s all this stuff. So that’s why I love it. Like we, we have

buddies and stuff like that in our industry, like golf with them or whatever that like you were always like, Oh, I just bought this or, you know, we try to one up with each other, but at the same time, we’re always helping each other too, which is an amazing thing about the industry itself.

Michael Stansbury (17:48.485)
Yeah, I call it coopetition. I want people to win. Obviously, I want to win. I want to win. I want to beat the guy. But again, at the end of the day, don’t want to pulverize the people where they don’t have business. I like to win, but I also like to see others win too. For instance, just recently, I wholesale the house to a guy and made a really good profit on it. And I thought he was going to flip it.

Alex Pal (17:51.672)
That’s a good word. I like that.

Michael Stansbury (18:12.378)
Well, he had an in buyer and he wholesale it to that guy. He made more money than I did. So it was kind of a daisy chain and I’ve never done, I haven’t, that hadn’t happened before, but I was so happy for him because he, you know, he knew the end game and he knew how to make, he had a buyer perfect for that house. And so that’s an example of like, that’s awesome. I love it. But most people would be like, you know what? I don’t want people to win. I want to take it all for me.

and that’s not what real estate’s about. Real estate’s about creating wealth, and there’s a difference between creating wealth and hoarding it. And if people can wrap their head around that, and sometimes that takes a little bit of work on your mind, then you can win here, and we want people to win here.

Alex Pal (18:57.398)
It’s so funny you mentioned that. we have on our MLS system, when we’re listing a property, people can go on the backend through our, it’s called the land registry office, and they can see what a property had previously sold for. In the U S it’s very common. And here in Canada, it’s a little bit more complicated. And especially if it’s sold off market, like it’s hard to get that data because you can’t just find it. But anyway, whenever a property does sell, it’s

plastered on this like geo warehouse is what we call it. So you can see what the last person bought it for us. So when we’re buying these off market deals, we’re typically buying them at a pretty steep discount. And what I find is like, I’ll give you an example. I buy a place for 300,000, I put in 25 K and I’m listing it on the market for 99. All have agents look it up and be like, well, he just bought it like four months ago. And it’s like, I no way like this, not worth it. It’s like, but all the comps support it and it ends up selling.

And so what we’ve done is like, you prepay your land transfer tax, it’s a little bit of a hack for any Canadians that might be listening. If you prepay it before closing and you put like the transitional cost is actually $2, but you pay the full amount that you would have to. But in that geo-error shows up that the purchase is $2. Nobody ever questions it. So little things like that to your point where it’s like, you know, if you want to, I don’t care, for example, ever what a wholesale makes.

Michael Stansbury (19:59.025)
Come on, bring it.

Alex Pal (20:21.848)
Wholesaler makes half a million dollars and I’ve hit my target of like I’m hoping to make 40k on this this flip all the power to him. In fact, I’m excited for him and I hope he buys me a beer because he made a great profit. But like I have no qualms with what people make and so many people like that’s how they measure their success is to like, you know, keep other people stifled and I’m of the opinion like raise up everybody and we all win, you know.

Michael Stansbury (20:45.446)
Yep, it is and you see it in text messages on deals. Well, you guys only had the property for four months and you paid $100,000 for it. You really expect to get that? And then you just ghost them and you wait and then it goes pending. And you say, yep, and then wait until it goes pending and you say, yeah, we just went pending on this just for fun. And then I love to talk to young people too about this because young people,

Alex Pal (20:54.765)
Yes.

Michael Stansbury (21:15.59)
It’s easy to fix in young people, but in old people. I don’t want to say old people. And people that have been around a bit, when you hear it, you’re like, there’s no change in them. They’re cooked. It’s baked into them. But young people, can have an effect on them because they’re more malleable. If you can show them, hey, this is how what creating is, and this is what this is, then they’ll get it.

Well, Alex, we’ve got some time here. I’d love to hear about a creative deal that you’ve done recently. Maybe talk to us about a flip. Or maybe, again, this is kind of a choose your own adventure. What’s a creative, fun, profitable flip? Or maybe even the nightmare one. You can choose your own adventure.

Alex Pal (21:55.843)
Yeah, yeah, I got one. Actually, we made the news for it. we got, there was a thing, like a news report in the city of Hamilton. actually, if anybody ever wants not to do like a self plug here, but if you on YouTube, if you search Power Property Solutions, you’ll see that one of the thumbnails has this news anchor sitting on the front. Anyway, that’s the one. We took that snippet and we did a whole kind of video on it.

We saw this thing on the news and we actually recognized the street and the house because obviously it wouldn’t disclose on the house, but they called it the worst torter house in all of Hamilton. And so we like raced to the house. We dropped a card off in the door and that afternoon we get a call because the guy’s panicking because his house is on the news. People are reaching out to him and I was like, so what do you want? And he’s like, dude, I want 150,000 for the place. And if you can find my passport, I would be so grateful. I was like, okay, I can’t guarantee the passport, but we’ll look. So anyway.

we bought this place and I have no idea how a property ever could get to this condition. Like in the series of events that happen, like a leak turns into like rotting, turns into sagging, whatever, you know, like those things happen. But this was like, I’ve never seen, to sum it up, we ended up taking out 150 kilos of human feces out of this property. And so we hired a, like a special kind of, demo crew.

Michael Stansbury (23:17.157)
Ugh.

Alex Pal (23:24.512)
And these guys are used to these kind of like, remember the day because it was like, had the building inspector. had the, the local bylaw officer and they were so familiar with the property. was like, guys, had no way to get a designer in there to get perma drawings done. need to give me some grace. need like three to five days of just uninterrupted. Don’t get me in shit. Just let me do my things. And both of them looked at each other like, you got it, man. Take care of it. And so like we went in there and blitzed the place.

and no great place to put a bin. So we’re kind of half hanging off the sidewalk trying to get the crap out of there. And it was, it was like I’ve never seen before. And these, this crew that we had hired, I had bought them a pizza, like a lunch one of the days just to show some gratitude. And these guys, man, were like eating their pizza shoveling with the other hand. They like didn’t care. But anyway, it was, it was funny. So I, there’s a video of me when like the majority of the stuff’s out of the main floor anyway. And it was just heinous. Like,

he wouldn’t believe. So of course down to the studs, it was like mice that had been fried in like the electrical. So I’m surprised the place didn’t go up in flames. We had the guy who used to live there had a like an old broomstick. And at the end of it, he taped a kitchen knife. And he said that raccoons would come in through the attic and he’d be on his bed like jousting with them trying to push them back. Like I’m not making any of up. It was absolutely ridiculous to the whole thing. So anyway, we

We bought the place, we got the whole place demo, but it’s like full rewired, got new HRAC, everything’s new, except for like, you know, we even had to put like one of those ozone machines to like extract the smell out of the stud walls. It was that bad. And so we, we had one neighbor on one side who was just an absolute beauty. She was so helpful and so grateful. And then we had a neighbor on the other side that made our life miserable the entire step, like every step of the way, which was absolutely ridiculous. So.

Michael Stansbury (25:08.082)
no. Gosh.

Alex Pal (25:23.256)
So anyway, long story short, we got the whole place done up, beautiful. We got permits and everything. We had to get permits at the end of it because there was just so much work to be done. Everything passed, obviously without a hitch. And we ended up selling it. I think, so funny story about the selling too, we were in the delivery room and my wife was giving birth to our second born child and like literally contractions started. And then that’s what, cause the, you know, the due date kept delaying, delaying, delaying. I’m like, this due date is going to fall exactly on our offer presentation date.

And this is when the real estate market was just on fire out here. So lo and behold, we’re in the delivery room and I’m like fielding calls and like, I’m like, Oh my God. So we ended up selling it multiple offers for like 6.75 or something like that. And it was like a, like a 300 K win of some sort. It was really cool. But yeah, yeah, that was the dirtiest one I’ve done for sure.

Michael Stansbury (26:10.511)
I love it. love it. That is dirty. That is dirty. Alex Pile man, thank you for being on the Real Estate Pros podcast. I think that’s a great story to end it on. Alex, if people wanted to get in touch with you, where could they do that at? Tell us where you’re at on the internet.

Alex Pal (26:27.724)
Yeah, if you guys want to check out www.palcapitalgroup.com, that’s one of our platforms. Right now, we’re actually going through a rebrand. It was palpropertiesolutions.com. But I’m sure if you search Alex Pal in Ontario, I would come up just about everywhere. But I did want to also express, Michael, thank you for having me. It’s an absolute pleasure getting to know you. And actually, I love that you’re in Memphis because my wife and I are planning actually a trip out that way. So I might just be hitting you up.

So it’ll be nice to grab a drink or two.

Michael Stansbury (26:57.381)
Hit me up, we’ll get you some barbecue and talk about all, we’ll talk about Canadian Memphis real estate because we got something in common, crack heads. We got crack heads in Memphis, we got crack heads in Canada. Folks again, thanks for watching the Real Estate Pros podcast. Do all the things, like, subscribe, comment, give us a thumbs up and we’ll see you next time. Thanks guys.

Alex Pal (27:06.946)
Yeah.

Alex Pal (27:18.457)
Thank you.