200. REAL DEAL: Contractor’s Leap to Investing Wealth with Gene Murashko (Part 2)

Summary

Real Estate Investing School Podcast
Episode 200: REAL DEAL: Contractor’s Leap to Investing Wealth with Gene Murashko (Part 2)
Release Date: October 10, 2024
Host: Brody Fawcett
Guest: Gene Murashko

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Introduction

In the 200th episode of the Real Estate Investing School Podcast, host Brody Fawcett continues his in-depth conversation with Gene Murashko, a seasoned general contractor who has successfully transitioned into real estate investing. This second part of their two-part series delves deeper into Gene’s journey, the challenges he faced, and the strategies that led to his success in Maui’s competitive real estate market.

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Gene’s Background and Transition to Maui

[00:00 - 02:08]
Brody opens the discussion by highlighting Gene’s extensive experience both as a general contractor with over a decade in the field and as a relatively young real estate investor. Gene recounts his early career moves, including getting married at 19, pursuing an electrical apprenticeship, and spending eight years as an electrician.

Gene: "I was, I had three goals when we moved out to Maui... I was always curious about why is this drywall guy doing that?"
[00:59]

Gene’s curiosity about the intricacies of various trades and his involvement in commercial work laid the foundation for his later ventures into real estate.

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Initial Goals and Unexpected Opportunities

[02:09 - 04:12]
Originally, Gene moved to Maui with three specific goals:

1. Disrupt Brandon’s (presumably another key figure in their network) expectations for contractors.
2. Purchase property in Maui.
3. Potentially partner with Brandon in real estate syndications.

However, Gene’s move turned out to be more opportunistic than planned. Upon his arrival, his expertise quickly became known within Brandon’s network, leading to an influx of contracting jobs that far exceeded his initial internship-type role.

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Family and Housing Challenges in Maui

[04:12 - 07:36]
Discussing the significant lifestyle changes, Gene shares the challenges of relocating his family to one of the world’s most expensive locations. The high cost of living, especially housing, was a major hurdle. Initially, Gene and his family encountered exorbitant rental prices, with basic three-bedroom condos costing around $4,200 per month compared to their previous low-cost living situation.

Gene: "It was supposed to be a temporary thing... we saw what was actually a decent deal on the first condo."
[07:08]

Despite the financial strain, Gene emphasizes the value of adjusting one’s mindset to embrace the new normal, ultimately securing better housing with stunning views that justified the higher costs.

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Contractor Experience and Team Building

[07:36 - 12:44]
Gene discusses his role in managing large renovation projects in Maui, including a significant kitchen renovation involving sliding doors. He highlights the importance of building a reliable team and the impact of hiring the right people.

A notable part of their discussion revolves around hiring interns and the mixed outcomes of such endeavors. Gene shares an anecdote about Mark, a tile specialist, who started as an intern and evolved into a highly skilled professional.

Gene: "Mark is now... he sits there and reads the code book. It's weird."
[18:30]

Gene underscores that while some interns may not work out, the benefits often outweigh the drawbacks, citing success stories like Mark to illustrate his point.

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Real Estate Investment Journey

[12:44 - 15:34]
Transitioning from contracting to investing, Gene explains how his first real estate flip inadvertently set him on his investment path. After remodeling a house in Portland, Oregon, he sold it for a substantial profit, which was a pivotal moment despite initial fears of financial loss.

Gene: "I started reading a bunch of books... Rich Dad, Poor Dad was my number one thing."
[14:52]

Gene emphasizes continuous learning as crucial, recommending resources like "Rich Dad, Poor Dad" and various audiobooks to build a strong foundation in real estate investing.

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Advice for Blue-Collar Professionals

[15:34 - 17:49]
Gene offers valuable advice for blue-collar workers contemplating a shift into real estate investing:

1. Continuous Learning: Invest time in educating oneself through books and podcasts.
2. Leverage Skills Wisely: Use existing skills to add value without becoming a bottleneck.
3. Mindset Shift: Adopt a frugal lifestyle to maximize investment potential.

Gene: "If you have a blue-collar job, don't be a foreman. Be the guy that does the work. Get some headphones, download Audible, and download every single investing book you can."
[15:05]

By focusing on education and strategic delegation, blue-collar professionals can effectively transition into successful real estate investors.

---

Conclusion

Gene Murashko’s journey from a general contractor to a thriving real estate investor in Maui exemplifies the power of adaptability, continuous learning, and strategic leveraging of one’s skills. His story serves as an inspiration for blue-collar professionals looking to diversify their income streams and enter the world of real estate investing.

Brody and Gene wrap up the episode by reflecting on the importance of mindset and the benefits of combining construction expertise with real estate acumen. The episode concludes with anticipation for future collaborations and projects between Brody and Gene, highlighting the lasting impact of Gene’s transition on his personal and professional life.

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Notable Quotes:

• Gene: "I have ruined Brandon's expectations for contractors forever."
  [02:09]

• Gene: "It was supposed to be a temporary thing... we saw what was actually a decent deal on the first condo."
  [07:08]

• Gene: "If you have a blue-collar job, don't be a foreman. Be the guy that does the work. Get some headphones, download Audible, and download every single investing book you can."
  [15:05]

• Gene: "Mark is now... he sits there and reads the code book. It's weird."
  [18:30]

---

This detailed summary encapsulates the key points and insights from the podcast, providing a comprehensive overview for listeners and those interested in the intersection of contracting and real estate investing.

Transcript

[Brody Fawcett]

What's up, everybody? Welcome back to the Real Estate Investing School podcast. This is a real deal episode. This is your host, Brody Fawcett, and this is part two of two part series. So go back and watch last week's and it'll make a lot more sense as we dive into this week's. Enjoy the show. I'm curious because you're young, right? And it seems like you have a lot of experience in what you're doing and you've been doing the real estate investing stuff for a little bit now, but then you're also a general contractor and you said you were doing that for, you know, 10 plus years. So what was that process in like.

[Gene]

Doesn'T that up, huh?

[Brody Fawcett]

It doesn't add up. Like, it doesn't add up. I'm gonna take this, this internship, which I know, I know how Brandon rolls, right? It's not like, it's not like this hefty paid internship and then you just stayed out here. Was that the plan or what?

[Gene]

So that was not the plan. Original plan was I had three goals when we moved out to Maui. I was, I had a six figure job in Oregon and I had my own contracting business on the side. So I, when I was 18, I got married at 19 right away applied for an electrical apprenticeship, got in and spent eight years as an electrician. In 2017, when I got into real estate, I, I opened up my own contracting business on the side. But the whole time I was a electrician, I always, I was always curious about why is this drywall guy doing that? Why is this plumber doing the. That, like why. How do you sweat copper? Like how. What plumbers do to make connections. I was doing a lot of commercial work. So when I came out when the Brandon's, it wasn't an internship, it was a like handyman job, which was like, it was, did not pay well at all. But I had three goals. I was like one ruin Brandon's expectations for contractors forever, which I've done. I have.

[Brody Fawcett]

Yeah.

[Gene]

I have guys working there right now on one of his, One of his houses? Yeah, another. Another one.

[Brody Fawcett]

You guys just painted his house, right? He was showing me.

[Gene]

Yeah, we painted. We did. Like we're going to be doing a really big kitchen renovation there. That's going to be like swapping levels. So it's, it's really big.

[Brody Fawcett]

Tell me about, he told me about the sliding doors that, that you're gonna do, I think on like the second level, like the, I don't know, really big. He was, he was bragging about how good of a deal he was getting on the, on the sliding doors.

[Gene]

I don't know about that. It'll be a good deal. Yeah. But second one was, one was ruined Brandon's expectations for contractors. Second one was buy a property in Maui. And then the third one was potentially partner with Brandon. Like one. Originally it was like, I want to get into syndications. I wasn't an accredited investor by like then, so I wanted to get into some of his syndications and potentially maybe buy something together. And then when we. It was my first month that I was out here, all of Brandon's network heard that Brandon doesn't have an intern, he actually has a general contractor here. So I got a ton of leads on work to get done and, and I priced them all. I knew Maui was expensive. I didn't know how expensive I priced them. Like reasonable retail rate for mainland. And everybody was like jumping on it. And so I was like, okay, well I brought one guy out to go do this work while I was, while I was doing work for Brandon and Brandon's thing was a six month contract thing.

[Brody Fawcett]

So, so that wasn't, that wasn't the plan originally. You, you came out and you're like, oh, I'm getting all these side jobs. Let me just fly somebody out and I can kind of manage them more or less and have them.

[Gene]

Yeah, that, that was the, that wasn't the original plan. Original plan was like maybe buy a property here to have a vacation rental. Like make sure Brandon, Brandon and his network know that I'm the best at what I do and that there is no other like competition. Basically. It's just like if there's any kind of question, any kind of issue that needs to get resolved, I need to be first in his, in his mind. And that was, that was the goal and we did that.

[Brody Fawcett]

So, so how do you. So back up? You're 31, you have four kids and you're taking a pay cut to move to one of the most expensive places in the world. Like how did, how does that go down? And what's like the thought process behind that? I mean, more. More so like what's the mindset behind it? From being like a lot of people look at that and it's a big step backwards. But you looked at it and it's proven as being a huge step forward.

[Gene]

Yeah. The reason why, the way that I looked at it was it was supposed to be a temporary thing and we had rental, like we have rentals. We have, we had a good cushion of cash. In the bank for this. It was, we looked at it kind of like a vacation for six months. Like I didn't quit my job. I was like, hey, I'm leaving for six months. They're like, absolutely, you should. This is. Sounds like an awesome opportunity. And I haven't talked to them since.

[Brody Fawcett]

I mean that sounds like, that sounds like, I mean that's exactly like our story was, was hey, we'll go try it out for. Not even try it out for six months. We'll, we have a house here now we just renovate. Let's go live there for six months and then we'll come back and I feel like if it wasn't that way, I don't know if I would have been able to like make the jump. I'm just like that.

[Gene]

Yeah.

[Brody Fawcett]

I don't, I don't like the long term decision stuff.

[Gene]

Exactly. Exactly. And that's exactly what we did was we, we just ended up by the, it was by the third month we pivoted our plan which everybody our whole family. I mean I had one brother in law that was like, you're not coming back. And I'm like, yes. He's like, no you're not. And he's, he's still, he's still. Every time I see him he's like, you're not back. Like I know.

[Brody Fawcett]

So funny. Yeah, everyone said that too. And like deep down you kind of probably knew it and it's like I didn't know it. Did you not?

[Gene]

My wife did. I didn't. Okay.

[Brody Fawcett]

Yeah. Okay. Yeah, same here. I guess my wife knew it. I think, I think it's like an intentional thing. They, they plan it and go along with it.

[Gene]

Probably was the case. Yeah.

[Brody Fawcett]

So okay, so kind of a temporary thing. Going to go do this, maybe come back to the, the job is that. Did you come out with your family then initially when you came out?

[Gene]

Yeah.

[Brody Fawcett]

So that's, that's tough cuz like housing is expensive out here. How did all that go down?

[Gene]

We came out and one thing that was really hard was finding. Finding a rental when you're not on island.

[Brody Fawcett]

Yeah.

[Gene]

Oh my dog. The Finding a rental when you're not on island is really tough. When you're here it's a little easier but it was crazy. But like our, we ended up hotel hopping for like a good three weeks and then, and then for two weeks we stayed in Brandon's downstairs ohana unit. And then we, and then we moved into our rental and we found our, found a rental that was like our Housing expense before we moved out here was because we were house hacking. It was 300 on a high utility month. It was like 500 bucks a month. And our three three bedroom downstairs condo rental had no view, no nothing. Like basic. Basic. Basic was 4, 200amonth.

[Brody Fawcett]

Yeah.

[Gene]

And that was, that was like the hardest pill to swallow originally.

[Brody Fawcett]

Yeah.

[Gene]

And then the next house we moved into was even more expensive to rent and we were like, absolutely, this is worth every penny. Because we saw what actual like, like we actually got a decent deal on the first, first condo. The second, second house was a three bedroom house with like gorgeous, gorgeous view. So like it's, it's a mindset shift too. It's like you just, it's, it's a new normal. You're like rise with the tide kind of.

[Brody Fawcett]

Yeah. Yeah. 100. Yeah, I felt that. It's funny like thinking about what type of a house you could get on mainland for, for the money that both of us spend on our mortgages right now even. It's wild. But yeah, super blessed. And I think just environment and everything, I don't know, that's what's kind of kept you here. But for, for sure there's, there's something to be said about just waking up in an inspiring environment and just having those vibes. It goes a long ways, but it's, I mean I think that's awesome because I don't know how much Brandon was paying you when you were this handyman intern, but I mean it couldn't have been too much, too much more and above what you, what you're paying for, for rent.

[Gene]

It was, it was barely, barely covering rent.

[Brody Fawcett]

Yeah. So, so that's crazy like, because a lot of people look like, look at that. And Trevor's over here. Trevor just moved out like last week. But same thing, like he took a, a pay cut moving out here and hopefully it, it doesn't stay that way very long. Right. Because there's lots of ways he can, he can go make, make more money. But like for him, same thing. It just, it's, it's inspiring having people like that. And I, I think back to like my story or like door to door sales is kind of how like the commission based, 100% commission based job and you look at it and it's like, oh man, that's so risky. You're taking a big, you know, potentially a pay cut to go backwards. And man, I think you gotta, I think you gotta do that. Like you look at where you're at now, you have, you have Two houses on Maui. Not just one, but two.

[Gene]

Just one.

[Brody Fawcett]

Just one.

[Gene]

Just one. It's multi unit, though.

[Brody Fawcett]

Multi unit. Cool. So you have ton of equity in that. It's worth a couple million bucks. Like, it's just crazy thinking that, like, and, and you have this, you know, I'm sure multiple, multiple six figure, you know, contracting business here now that doesn't require you personally to do too much work. And yeah, it's. And you came here on a, On a handyman.

[Gene]

Yeah, like job major. It was actually exactly 50% pay cut. Take home, like from what Brandon. What I was making as a, like from my day job and what Brandon was paying me, which was like, I mean, it's. Again, this was the opportunity. This was the like. And he had like the longest application process. It was hilarious gauntlet because I, I was like, I did the first thing and then we had a six hour family trip that we were like a road trip that my wife was like, I'm filling out the rest of this.

[Brody Fawcett]

That's why you got the job.

[Gene]

Yeah, she, you know, fudge or some numbers.

[Brody Fawcett]

I'm just kidding. Well, Brandon tunes into this every week, so he's gonna hear that. So.

[Gene]

Awesome.

[Brody Fawcett]

Yeah.

[Gene]

Can't fire me now.

[Brody Fawcett]

Well, dude, I, Yeah, I think that's, I think that's awesome. I actually asked him the other night. We're like sitting around the, Sitting around the fire, and I was like, do you feel like. Because I've had some interns work out really, really well, and I've had some that haven't worked out as well. And it's kind of like this, this. And this is what I was asking about. The concept of hiring somebody that already knows how to do the job and their experience and they can go crush it versus, like hiring someone that you, you know, you're. You're training and they're moldable and they're kind of working their way in. And I was like, has it actually. Because it was just after he got done telling me a story on, on how somebody, you know, essentially that he hired as an intern, like stole his car, left it somewhere, just like this bad story. I'm like, I'm like, do you feel like it's worked out that way? Like maybe you're saving some money and they're learning and they get a pain involved in this stuff. But do you feel like overall. And he started naming off all these people like he named you? He's like, look what Gene's done now. He named like Walker, who's the CEO of right Open or capital now. Like they started as intern and. And so he's like, yeah, like some have been bad, but also like, look at the good. And he's like a thousand percent it's been, been worth going that route. So.

[Gene]

Yeah, I mean, for. It really varies on what business you have. Like in construction, it's almost impossible to get an internal like to come and do work for almost nothing. Yeah, like they have apprenticeships here for that reason.

[Brody Fawcett]

Well, that's what makes, that's what makes your story so unique and ironic, I think is just. Yeah, like you, you were that guy. You were the construction guy. Right. And it almost brings up another thing because I think there's a lot of like blue collar people that they just like, hey, I'm making good money. Like I'm gonna, you know, while it's raining, just, just rock it and rake it in while the economy's good. And they don't think about investing, they don't think about real estate. They don't look at it as, hey, I have this, this skill set that I'm able to apply to, you know, investing.

[Gene]

Yeah. The way that I looked at that was the money that I'm raking in, I have to, I have to put into real estate. That was my like, that was my like, if I'm in the position of I making six figures as whatever job, like still live super frugally and then just dump your money into, into an investment. Like my choice was real estate and it's worked out fantastic. Yeah, but like that, the, the interns, like, I wish I could find people that would fly out and come work for me for free or almost free.

[Brody Fawcett]

You just got to grow a beard. That's all you have to do. Just become insta famous.

[Gene]

And I get, I get the, I get the Instagram ads all the time. It just doesn't grow.

[Brody Fawcett]

This doesn't work. Tried it doesn't work. That's funny, dude. So, so what would you say to somebody who is like in that blue collar position and they maybe have this mindset or limiting belief of like, you know, how do I actually get into real estate? What's your advice? What's that, that next step for them to, to take that maybe take that leap or they're just like, hey, this is. What I know is, is this construction job or this. It could be any job really.

[Gene]

I guess I'd say learning is the number one thing. The reason why I got into real estate very originally was I kind of accidentally flipped my very first house and it wasn't an accident. I just had, like, I bought a house in the Pacific Northwest. It was in a good. Like, it was a decent area, but it was in, what, 2012 or 13. And bought it for 130 grand. And I was like, I am making the biggest financial mistake of my life. I thought I was like, dumb.

[Brody Fawcett]

Yeah.

[Gene]

But then we went and remodeled the house, and a year and a half later, like, I put a number in my head. I was like, once it's worth 200, we'll sell it.

[Brody Fawcett]

Yeah.

[Gene]

And I was like, it's gonna be, like, five years from now. Whatever. Like, yeah. And then. And then a year and a half later, I texted my realtor and I'm like, what do you think my house is worth? Sentence of photos. He's like, dude, market's crazy right now. Like, 215. I was like, what? No way. So we ended up selling it, and I got this check. I got a 61, 000 check when I was 20, 22 years old. And I was scared. I was so scared. I was like, I put in a lot of work into this house and spent a lot of time on it. I know how quickly it is. I know that you can have $10,000 in your account and $1,000 in your account, and you can spend it all in the same amount of time. It's like. And so I was really scared of losing that $60,000. So I started reading a bunch of books. One of them was one of Interesting. That was. That was my, like, nudge into the real estate world was that I just had a. I had an okay chunk of money that I was scared of losing.

[Brody Fawcett]

Interesting.

[Gene]

That was like. I guess it was kind of fear driven.

[Brody Fawcett]

Yeah, but, yeah, it was like the opposite of like, oh, this is legit. Like, let's go. Let's do more, more, more. But, yeah, you're conservative.

[Gene]

I was. I was scared. I read Rich Dad, Poor Dad. I read. Like, that was my number one thing. I was at work. One thing. I think that, like, my biggest, like, piece of advice, if you have a blue collar job, that's like, my favorite. Don't be a foreman. Be the guy that does the work. And get some headphones, download Audible, and download every single investing book that you. You can think of that you hear recommended. I'd say, like, the basic one that you kind of need to start with is the Rich Dad Poor dad.

[Brody Fawcett]

Yeah.

[Gene]

But again, like. And then go off into niches, like, listen to podcasts. That's also fantastic. The. But that's what I Did for the next six months. I did nothing but listen to audiobooks at work. And that following year. So we sold in like June the following year I bought two houses.

[Brody Fawcett]

Cool.

[Gene]

About one one investment property and one one primary residence.

[Brody Fawcett]

Yeah.

[Gene]

And. And then like we kind of scaled from there. We're like I one thing blue collar. If you know how to do the work, don't do the work yourself. Like. Like they like you have these skills but those skills slow you down. I made every mistake in the book on that first house that I like. Like I guess it was the second first actual investment property was. I went and I was like I'm going to do all the work myself.

[Brody Fawcett]

Yeah.

[Gene]

I'm going to be my own gc. And this was that first property was in Portland, Oregon. And I got red tagged like, like it was like it was like within the first week.

[Brody Fawcett]

Yeah.

[Gene]

Stop work order. I was like, oh great.

[Brody Fawcett]

Cool. Yeah.

[Gene]

Which like it was not a. It was not a huge deal. Like we it out. It's just like depending on the market you're in, sometimes your neighbors don't care in that area. The neighbors really cared.

[Brody Fawcett]

Yeah.

[Gene]

And we ended up getting red tag. And then that six month. My estimate for the project which wasn't. It was not unrealistic for that project to be done in six months. It took me a year and a half and I was. I was working full time still and I'd have like. Like I hired people to go and do like do the work while I was at work.

[Brody Fawcett]

Yeah.

[Gene]

And that's one of the like that's the first time I ran into the hiring. Cheap labor is usually doesn't work out.

[Brody Fawcett]

Yeah. It's.

[Gene]

It's you. You want to hire.

[Brody Fawcett]

Was that the last time?

[Gene]

It wasn't the last. This intern thing is intriguing.

[Brody Fawcett]

That was the case that that's. Dude, that's why like. I mean that's why you're over my house.

[Gene]

Actually. Actually the first. The first guy that I ever hired was Mark, the guy that is my tile guy.

[Brody Fawcett]

Mark's great.

[Gene]

And Mark is now like after he worked for me and he was like he was a baby. He knew nothing. And he will tell you that too.

[Brody Fawcett]

Yeah. No, but he ended up.

[Gene]

But he ended up. He ended up going on like I laid him off. When I that project like ended. I laid him off. He ended up going on to work for a tile contractor in Seattle and he like really really like really learned really quickly. And. And he's phenomenal. His personality is. He wants to be like perfect.

[Brody Fawcett]

Yeah.

[Gene]

And that's like. He's always eager to make sure that everything is exactly how it needs to be. And that's what you need in the tile guy. It's not like, just slap it on, whatever. He's like, no, he's.

[Brody Fawcett]

He's great. Yeah, he's. He's so good. I asked him how he got into all of that, and he was like, yeah, I was interested in it. And I. So he, like, studied it and became great.

[Gene]

Yeah, he sits there and reads the code book. It's weird. Yeah.

[Brody Fawcett]

That's funny. Well, good for you. For. It's a good. It's a good pickup. But I think. I think, like, the. Yeah. The moral of, like, that concept, I think it's great just from the idea of it applies more to just, like, construction as well. Like, the things sometimes that. That hold us back are the fact that we're good at lots of things, right? Which allows us to not be great at one certain thing. And so you try to do everything, and it just. It causes problems. And I was talking, you know, Cam. But I was talking to Cam the other day, and he's, like, the biggest thing that helped me out. I mean, he does, you know, 100 or so buys 100 or so houses a year and flips, like, a lot of them. And he's like, I don't know. I'm not handy at all, you know, or I rely on this, and I'm. I'm terrible. He's like, but that's, like, what's helped me the most when I asked him that question. He's like, because I haven't been able to rely, like. Or revert back to, like, oh, I'm just going to do this, you know? So it probably applies a lot of. A lot of different things in life. But, dude, this. This has been great. Like, I think that. I think this is just. It's a little bit different of a spin, but just talking, like, mindset and talking. Talking different. A different angle on, you know, real estate. Investing's been great, but thanks for. Thanks for. Thanks for jumping on the show, dude, and excited for. For all the future projects we'll do together.