198. REAL DEAL: Contractor’s Leap to Investing Wealth with Gene Murashko (Part 1)

Episode Overview

Podcast: Real Estate Investing School Podcast
Episode: 198. REAL DEAL: Contractor’s Leap to Investing Wealth with Gene Murashko (Part 1)
Air Date: October 3, 2024
Host: Brody Fossett
Guest: Gene Murashko

Main Theme:
This “Real Deal” episode offers a detailed, step-by-step look at how general contractor Gene Murashko leveraged his construction expertise to acquire, renovate, and create significant wealth through a single real estate investment in Salem, Oregon. Brody and Gene break down the lifecycle of a foreclosure deal, from finding the property, structuring the financing, managing a complex rehab (including building an ADU), and ultimately creating both lifestyle and financial upside.

Key Discussion Points & Insights

1. Gene’s Background & How the Deal Came to Be

[00:37] Gene, a general contractor, moved to Maui for an internship/job opportunity (details teased for Part 2).
Unlike many contractors, Gene became deeply interested in investing, using his construction skills as leverage.

2. Finding the Deal: An Auction Foreclosure Opportunity

[02:18] The property was discovered by chance on Zillow—an auction listing for a foreclosure.
[02:54] Oregon’s unique “redemption rights” law (6 months post-purchase, the former owner could buy it back at sale price).
[04:17] The auction process was convoluted: Gene won the property three times at progressively lower bids. Each time, the bank’s pricing/appraisal issues led to relistings.

Quote:
“We wanted it, we won it for like $315,000. The appraisal came back at like $285,000... The bank can’t sell it... We tried to negotiate, the bank said no. Relisted it on auction.” — Gene [04:34]

3. Creative Financing: Hard Money, Private Lending, and a Rich Uncle

[05:18] Initial plan: Use FHA 203k (rehab) financing, but complications led to using hard money.
[05:51] To finance the addition (an ADU), Gene turned to his uncle for private money ("a crazy deal" with high returns to entice him into real estate lending).

Quote:
“He got $56,000 for $120,000... He got a phenomenal return. I actually wanted him to understand my point of view too.” — Gene [06:44]

4. Investment Goal: Personal Use Meets Financial Sense

[08:10] Original intention was “lifestyle driven”—a larger, upgraded family home.
[09:14] Gene’s financial discipline: “I need to make this cheaper than my current mortgage.” They explored all possible strategies so the upgrade wouldn’t cost more monthly than their previous house.

5. The Power of ADUs & Local Incentives

[10:00] Salem offered permit fee reductions for ADU (Accessory Dwelling Unit) construction.
[10:42] Total project: Bought the house at around $287k; invested ~$100k in the main house reno, $100k in the ADU.
[11:37] Design upgrades included “herringbone hardwood floors,” thanks to Gene’s and his wife’s construction/design skills.

Quote:
“We did herringbone hardwood floors on the entire bottom level, which was... ridiculous. Now I’m like, looking back, I thought $16,000 was a ton of money for materials.” — Gene [11:37]

6. BRRRR Strategy (Buy, Rehab, Rent, Refinance, Repeat)

[12:13] Post-reno, the property appraised at $725k (all-in cost: ~$500k). This created $225k+ in equity.
[12:23] HELOC (Home Equity Line of Credit) of $120k secured for further investing.

Quote:
“That’s equity. Right? That’s that forced equity we talk a lot... How did you force the deal? That’s it right there.” — Brody [13:09]

7. Managing the Project: GC Advantage and Family Partnership

[14:19] Gene continued to work his W2 job throughout, using his GC business to systemize rehab and keep costs/manage quality.
[14:58] His wife contributed as lead designer, giving the project a unique aesthetic and further increasing property appeal.
[15:34] The success and exposure from their home design drew the attention of high-profile investors.

8. The ADU as a Cash Flow Engine

[16:47] The property was zoned for an ADU; city regulations allowed the build with proper setbacks.
[18:13] The ADU was rented fully furnished to travel nurses via Furnished Finder: $2,700/month on a $2,900/month mortgage.

Quote:
“My mortgage was $2,800... The rent was $2,700. The extra utility expenses were like $3–500 a month...” — Gene [19:10]

9. The End Result: Financial Freedom & Future Leverage

[19:58] The Murashkos moved from a 3-bed to a 5-bed + bonus room, improved lifestyle, and still paid less than before.
[20:24] When leaving for Maui, the house was rented to travel nurses “by the bedroom,” yielding $3–4k/mo cash flow post-COVID.

Quote:
“If we don’t find a way to make this work, it’s going to be a lot more than our current mortgage. But you added the ADU... you’re saving money, and you have a couple hundred grand in equity. That is the power of real estate.” — Brody [19:58]

Notable Quotes & Memorable Moments

On the Oregon foreclosure process:
“Oregon has this law that if you buy a foreclosure... the previous owner has right to buy it back for the price you bought it for… Redemption rights.” — Gene [02:54]
On leveraging family and networking for financing:
“I have a rich uncle… he actually felt bad. He’s like, ‘Dude, why? Like, I feel so terrible, you shouldn’t be paying me this much.’” — Gene [06:46]
On combining lifestyle and investment:
“People think you can't have your cake and eat it too sometimes, but you actually can... You can upgrade your lifestyle housing situation and at the same time have it be a smart financial decision." — Brody [19:58]

Timestamps for Key Segments

[02:18] – How Gene found the foreclosure property on Zillow auction
[04:34] – The challenges of bank appraisals & repeated auctions
[05:51] – The private money “rich uncle” loan story
[09:14] – Balancing lifestyle upgrades with investment prudence
[10:00–10:42] – Salem’s ADU incentive & full project budget breakdown
[12:23] – Completing the BRRRR cycle and pulling out a HELOC
[14:19] – Working a W2 job while executing an extensive rehab
[18:13] – ADU rental numbers and how it impacted mortgage payments
[20:24] – Renting to travel nurses post-move, final cash flow outcome

Tone and Language

The conversation is candid, practical, and encouraging, mixing technical investing insights with the “real life” advantages of lifestyle upgrades and family involvement. The hosts maintain a friendly, relatable tone, emphasizing both the financial and personal wins possible in well-executed real estate deals.

Next Episode Teaser:
Stay tuned for Part 2, where Gene will dig into his journey to Maui, his experience working with renowned investor Brandon Turner, and more about scaling his investing business.

Episode Overview

Key Discussion Points & Insights

1. Gene’s Background & How the Deal Came to Be

[00:37] Gene, a general contractor, moved to Maui for an internship/job opportunity (details teased for Part 2).
Unlike many contractors, Gene became deeply interested in investing, using his construction skills as leverage.

2. Finding the Deal: An Auction Foreclosure Opportunity

[02:18] The property was discovered by chance on Zillow—an auction listing for a foreclosure.
[02:54] Oregon’s unique “redemption rights” law (6 months post-purchase, the former owner could buy it back at sale price).
[04:17] The auction process was convoluted: Gene won the property three times at progressively lower bids. Each time, the bank’s pricing/appraisal issues led to relistings.

3. Creative Financing: Hard Money, Private Lending, and a Rich Uncle

[05:18] Initial plan: Use FHA 203k (rehab) financing, but complications led to using hard money.
[05:51] To finance the addition (an ADU), Gene turned to his uncle for private money ("a crazy deal" with high returns to entice him into real estate lending).

Quote:
“He got $56,000 for $120,000... He got a phenomenal return. I actually wanted him to understand my point of view too.” — Gene [06:44]

4. Investment Goal: Personal Use Meets Financial Sense

[08:10] Original intention was “lifestyle driven”—a larger, upgraded family home.
[09:14] Gene’s financial discipline: “I need to make this cheaper than my current mortgage.” They explored all possible strategies so the upgrade wouldn’t cost more monthly than their previous house.

5. The Power of ADUs & Local Incentives

[10:00] Salem offered permit fee reductions for ADU (Accessory Dwelling Unit) construction.
[10:42] Total project: Bought the house at around $287k; invested ~$100k in the main house reno, $100k in the ADU.
[11:37] Design upgrades included “herringbone hardwood floors,” thanks to Gene’s and his wife’s construction/design skills.

6. BRRRR Strategy (Buy, Rehab, Rent, Refinance, Repeat)

[12:13] Post-reno, the property appraised at $725k (all-in cost: ~$500k). This created $225k+ in equity.
[12:23] HELOC (Home Equity Line of Credit) of $120k secured for further investing.

Quote:
“That’s equity. Right? That’s that forced equity we talk a lot... How did you force the deal? That’s it right there.” — Brody [13:09]

7. Managing the Project: GC Advantage and Family Partnership

[14:19] Gene continued to work his W2 job throughout, using his GC business to systemize rehab and keep costs/manage quality.
[14:58] His wife contributed as lead designer, giving the project a unique aesthetic and further increasing property appeal.
[15:34] The success and exposure from their home design drew the attention of high-profile investors.

8. The ADU as a Cash Flow Engine

[16:47] The property was zoned for an ADU; city regulations allowed the build with proper setbacks.
[18:13] The ADU was rented fully furnished to travel nurses via Furnished Finder: $2,700/month on a $2,900/month mortgage.

Quote:
“My mortgage was $2,800... The rent was $2,700. The extra utility expenses were like $3–500 a month...” — Gene [19:10]

9. The End Result: Financial Freedom & Future Leverage

[19:58] The Murashkos moved from a 3-bed to a 5-bed + bonus room, improved lifestyle, and still paid less than before.
[20:24] When leaving for Maui, the house was rented to travel nurses “by the bedroom,” yielding $3–4k/mo cash flow post-COVID.

Notable Quotes & Memorable Moments

On the Oregon foreclosure process:
“Oregon has this law that if you buy a foreclosure... the previous owner has right to buy it back for the price you bought it for… Redemption rights.” — Gene [02:54]
On leveraging family and networking for financing:
“I have a rich uncle… he actually felt bad. He’s like, ‘Dude, why? Like, I feel so terrible, you shouldn’t be paying me this much.’” — Gene [06:46]
On combining lifestyle and investment:
“People think you can't have your cake and eat it too sometimes, but you actually can... You can upgrade your lifestyle housing situation and at the same time have it be a smart financial decision." — Brody [19:58]

Timestamps for Key Segments

[02:18] – How Gene found the foreclosure property on Zillow auction
[04:34] – The challenges of bank appraisals & repeated auctions
[05:51] – The private money “rich uncle” loan story
[09:14] – Balancing lifestyle upgrades with investment prudence
[10:00–10:42] – Salem’s ADU incentive & full project budget breakdown
[12:23] – Completing the BRRRR cycle and pulling out a HELOC
[14:19] – Working a W2 job while executing an extensive rehab
[18:13] – ADU rental numbers and how it impacted mortgage payments
[20:24] – Renting to travel nurses post-move, final cash flow outcome

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Summary

Episode Overview

Key Discussion Points & Insights

1. Gene’s Background & How the Deal Came to Be

2. Finding the Deal: An Auction Foreclosure Opportunity

3. Creative Financing: Hard Money, Private Lending, and a Rich Uncle

4. Investment Goal: Personal Use Meets Financial Sense

5. The Power of ADUs & Local Incentives

6. BRRRR Strategy (Buy, Rehab, Rent, Refinance, Repeat)

7. Managing the Project: GC Advantage and Family Partnership

8. The ADU as a Cash Flow Engine

9. The End Result: Financial Freedom & Future Leverage

Notable Quotes & Memorable Moments

Timestamps for Key Segments

Tone and Language

Summary

Episode Overview

Key Discussion Points & Insights

1. Gene’s Background & How the Deal Came to Be

2. Finding the Deal: An Auction Foreclosure Opportunity

3. Creative Financing: Hard Money, Private Lending, and a Rich Uncle

4. Investment Goal: Personal Use Meets Financial Sense

5. The Power of ADUs & Local Incentives

6. BRRRR Strategy (Buy, Rehab, Rent, Refinance, Repeat)

7. Managing the Project: GC Advantage and Family Partnership

8. The ADU as a Cash Flow Engine

9. The End Result: Financial Freedom & Future Leverage

Notable Quotes & Memorable Moments

Timestamps for Key Segments

Tone and Language