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Show Summary
In this conversation, Ken Kostecki shares his journey as a real estate investor and construction business owner. He discusses how he got started in real estate, the importance of viewing properties as investments, and his transition into the construction industry. Ken emphasizes the significance of proper business planning and mentorship for aspiring entrepreneurs, highlighting his involvement with SCORE, a free mentoring organization. He also touches on common pitfalls for new business owners and shares insights on current projects, including short-term rentals and home additions.
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Investor Fuel Show Transcript:
Ken Kostecki (00:00)
Well, from before they start the business is the right answer. And I’ll talk a little bit too about the organization I’m in, if I may. It’s called SCORE. It’s a national organization and it’s free mentoring. So if I’ll want this message to get out there because if I would have known about this when I got started, it really would have helped me out.Dylan Silver (01:51)
Hey folks, welcome back to the show. Today’s guest, Ken Kostecki, out of the Richmond, Virginia metro area, is a real estate investor and owner of Maison Construction and Renovations. He’s active in short-term rentals and outside of investing in construction, helps give back as a volunteer business mentor to help others grow and scale their ventures. You can find him atMaisonRVA.com, that’s M-A-I-S-O-N-R-V-A.com or on his Instagram, at MaisonRVA. Ken, thanks for taking the time today.
Ken Kostecki (02:26)
It’s my pleasure to be here. Thanks so much for having me.Dylan Silver (02:29)
I always like to start off at the top of this show by asking guests how they got started in investing, but you’re also active in construction as well. So which came first, the investing or the construction?Ken Kostecki (02:42)
Well, I would say probably I looked at every property that I owned as an investment. I know my family says that I’m a different breed, right? They’re like, why can’t you just look at a house as a house? But I don’t know. I’ve always had that mindset to where anything that I had, I wanted to maximize the potential out of it. So when I owned my first house, I bought my first house when I was 24 years old. I bought something that was a fixer upper. ⁓And I learned, I learned by doing. had some experience, you know, just my parents were handy. I built sets for school plays in high school. I worked in a hardware store, Menards Hardware in the Midwest. I’m originally from the Chicago area. So I kind of took that experience and along with, you know, just learning as I did to sort of look at each home that I, that I owned along the way as, as an investment. you know, I’m, don’t know, I don’t know what you say came first, right? You know, so they kind of go hand in hand with one another in that regard.
Dylan Silver (03:41)
Now, when we talk about different segments of real estate, right? You’ve got STR midterm, longterm, year to year leases. You’ve also got like multifamily and people are doing pad split now and all different types of different ways to cashflow. I know that you’re active in STR. Was STR the first investment outside of your personal residence? How did you get into the STR space?Ken Kostecki (04:04)
Well, the SCR, I honestly just have one SCR, but I have ⁓ six other doors ⁓ that are long-term rentals. So I have ⁓ four single-family homes and two duplexes. So, and three of those units came first. ⁓ I actually, honestly, a little personally came out of a divorce, was in a situation where, you know, I had the money from selling the house and it was living in an apartment and it was right during the pandemic, right? Right when they started handing out checks.And I knew that inflation was going to happen. So I said, well, I don’t want my money sitting in a bank. I want to get that out there in some sort of concrete asset. ⁓ And I’ve always wanted to do real estate investing and have some rental properties. So I was afforded that opportunity to do that. I found one listing that was listed just on the market and was working with a realtor. And it turned out that that owner had two other properties that he was looking to sell.
They just happened to be occupied, so he hadn’t listed them yet. So I ended up buying all three properties, and that’s kind of how I got started. So it was a great opportunity. He was looking to get out of the market. He was moving out of state, had some other investment opportunities he wanted to get into. I ran the numbers, and the numbers looked great. ⁓ So I pulled the trigger on all three of them, and that’s how I got started.
Dylan Silver (06:09)
Well, that’s a good way to get going. Did all three of those become long-term rentals?Ken Kostecki (06:13)
Yeah.Yep, they’re all long-term rentals. That’s right.
Dylan Silver (06:18)
And those are single family. I know you mentioned a duplex in there as well. Were all of those single?Ken Kostecki (06:21)
Correct.Yeah, the two of them are single family and one is a duplex.
Dylan Silver (06:27)
Okay, so ⁓ first three investments, two single families and a duplex. You know, when I hear folks talking about the on-ramp into real estate investing, there’s a lot of ways for people to get in. You really jumped in and bought three at once, right? Was there a reason you said, hey, I’m gonna ⁓ become a full-time investor or was this you saw an opportunity and you said, I’m gonna run with this and see where it goes? Did you have an idea in your mind at that time thatthis would be something that you would grow and scale.
Ken Kostecki (07:00)
Yeah, I think so. You know, was something that I always had in mind, but again, getting a little personally that opportunity wasn’t afforded to me for multiple multitude of reasons and in my relationship. obviously I’d gotten on the other side of that and kind of said, all right, now finally is my opportunity to do what I’ve always wanted to do. Start building wealth for myself and investing and growing that. ⁓ And so nothing was holding me back at that point. So I pulled the trigger and went went full force.Dylan Silver (07:29)
I wanna pivot a bit here and ask you about your construction business. And I was looking at additions, you guys do additions. And when we talk about the construction space and contractors, really anywhere, but definitely in the East Coast, there’s a lot of competition, right? And so is there a segment of that space, whether it is additions or another ⁓ area within construction that you specialize in?Ken Kostecki (07:33)
Yeah, sure.Yeah.
Yeah, I think it would probably make sense to to talk a little bit about our value proposition and why, you know, I got into construction because the other interesting thing was I never actually worked for a construction company before starting one. I had a whole nother career in the plastics industry. I’ve got an engineering degree. So I worked in plastics and rubber as you know, in manufacturing, in R &D, and then got into technical sales and I got my MBA along the way too. So
Um, you know, I kind of wanted to get out of that just because the corporate world and I was beating my head against the whole dealing with that and decisions being made that I had no control over that made absolutely no sense and always had the entrepreneurial spirit. So, you know, when the time came, um, I had actually started putting, uh, the wheels in motion and start studying for my contractor’s license and I got laid off. So at that point I kind of said, all right, I was kind of like on a six month plan.
Dylan Silver (08:33)
you.Ken Kostecki (08:55)
kind of work in that direction. And I just said, well, again, I’m just going to go head first and go full force into this. And I haven’t looked back. And the reason why I picked construction is, again, there is a market niche and a need. So I had so many friends and myself too, who had worked with contractors and it was so hard to find someone who was responsible, communicative, ⁓ organized, professional, ⁓ and just did good quality work.that you could rely on. So I had other people looking at my work on my personal properties that I had renovated. And they said, man, you really should do this. you know, so I kind of looked at it said, all right, I’ve got the technical capability. I’ve worked, you know, in a white collar sort of environment with project management and customer service and marketing and sales. I’ve done all those things, but I’m also not afraid to get my hands dirty. Right. So.
I can tear a house apart personally and I’ve done that. So I know the right way to do things and I know the wrong way to do things. So I kind of package all that up the sort of white collar background with a blue collar mentality and the ability and it kind of meshes very well in the construction industry.
Dylan Silver (10:42)
want to ask you specifically, ⁓ pivoting a bit here, ⁓ when you are a contractor, there’s a license to be a contractor, right? But there’s also a lot of people that I’ve seen throughout the country, and I’m licensed in Texas as a realtor, who may be operating without a contractor’s license. And I’m not exactly sure how this happens, right? But from what I’ve seen, you can…certainly do certain things without running it by the city. But other things, if you’re going to, you know, do a brand new home, they’re going to stop that, you know, in its tracks, you know, you can’t you can’t do ground up construction. But how are how are people operating without a contractor’s license? It seems like there’s enough of those people where at least it’s on my radar.
Ken Kostecki (11:27)
It’s a question. mean, I guess you could do anything without permission and, you know, take that risk if you want to. ⁓ You know, it’s not something that I would suggest anybody do. ⁓ You know, I did it the right way. You know, again, I mentioned right when I got started, I looked into everything that I needed to do from, you know, licensing to insurance to, you know, everything on the business side of things to make sure my business was set up and stable from when I started.But that’s not the approach for everybody, obviously. And I can’t really speak to that very well of why people do that. guess, you know, a lot of people don’t have the business acumen or the background or the professional sort of approach to it. you know, and then that’s what you find a lot of, right. And that’s what ⁓ I think it’s a lot of people into trouble is, you know, you have a carpenter who’s worked for 20, 30 years, his body’s breaking down. You know, he knows construction.
Dylan Silver (12:20)
Yeah.Ken Kostecki (12:26)
but he doesn’t know anything about business and running a business. as you know, running any business, 80 % of it is running a business. It doesn’t matter if you’re an expert in any area, you have to know how to run a business and do that effectively to be successful.Dylan Silver (12:42)
I was just having this conversation with a tax strategist yesterday about realtors and what realtors think. As a realtor myself, I was getting a kick out of it. Like, hey, my gym membership, is this a tax write-off? I’ve gotta be able to be presentable. So when people talk about the business side and accounting, tax strategy, keeping your books, but then also growing and scaling your business so that if you are away from the business fora period of time that it doesn’t just fall apart and collapse, right? These are things that everybody, I think in the real estate space and service providers to the real estate ⁓ space like yourself should be talking about. I want to pivot and ask you about the volunteer work that you’re doing, helping folks grow and scale their business. ⁓ When we talk about ⁓ aspiring real estate investors, business owners in general,
Ken Kostecki (13:29)
Thanks.Absolutely.
Dylan Silver (13:39)
I think a lot of people don’t approach their business like a business until it starts making like a substantial amount of money to where they can, you know, in their mind justify going through some more of the hurdles to maybe legitimize their business further. at what point in time in your mind should people start looking at their business as a business?Ken Kostecki (13:59)
Well, from before they start the business is the right answer. And I’ll talk a little bit too about the organization I’m in, if I may. It’s called SCORE. It’s a national organization and it’s free mentoring. So if I’ll want this message to get out there because if I would have known about this when I got started, it really would have helped me out.but basically you can go on to SCORE and request a mentor. So you put in what your business is. It could be at any stage of your business. You could be just have an idea.
⁓ actually being starting that business or developing that business. We get people who are doing apps or product ideas. It can be anything. And there are people who are experts in pretty much any area, and they’ll look at what your request is and try to align you with a mentor who fits your needs. And that can be within your region. There’s people, local chapters everywhere. And most of the ones that I do are in person, but they can also be, you know, through a video call as well. So if there’s someone
some specific need that you have that you can connect with anyone throughout the nation in the organization, which is great. So anyway, just a plug for score. ⁓ It’s a great thing to be able to have. And so I recommend anyone to do that because you don’t know what you don’t know. And that’s where a mentor can help you. We’re not a business coach.
There’s a delineation between that. But at least it’s a resource that you can ask questions.
And you can learn from somebody else who’s gone through a lot of those things and they can basically tell you the things that maybe you don’t know. So that way you’re setting up your business the right way. So you’re going to be successful because what you don’t want to do is invest a whole bunch of time, a whole bunch of money into something and not think of all the unknowns and get blindsided somewhere. Because as you know, there’s a large percentage of businesses that don’t make it past year one or two and it’s all goes back to the business planning side. And that’s where score comes in.
or just any business mentor for that matter. So, or just doing your research.
Dylan Silver (16:40)
Yeah, I mean, when we talk about having someone to reach out to, I think that in and of itself can save people a lot of a lot of headache, heartache as well, because, you know, being able to have a second opinion, bounce ideas off someone who’s more experienced than you are, right, is is pivotal. And I think that’s really the power of networking. And as a realtor and as someone who’s worked a lot with investors myself, you know, I feel likeYes, you do of course need to understand the X’s and O’s and logistically, you know, your business, but you also need to be spending that time on building strategic relationships because that can, you know, be a buyer in a future deal. That person could be a reference source for you. And I can’t tell you, I’m sure you have the same experience where it’s as much, if not more so, the people than it is the knowledge as well.
Ken Kostecki (17:35)
Yeah, it’s really important to surround yourself with a team. If you don’t have the answer, you need to have someone to go to who will have that answer, whether it’s a mentor or you need a bookkeeper, accountant, lawyer, whatever it may be, all those different areas. If you don’t have expertise in those areas, you need to find that expertise and have someone who can answer those critical questions or even do those tasks for you.Dylan Silver (18:00)
Is there one shortfall that you see commonly for folks who are ⁓ in their first year or two in business, something that ⁓ newer business owners should be doing that they’re not?Ken Kostecki (18:13)
think it all goes back honestly to improper planning and not knowing what you don’t know. Right. ⁓ Again, I see the most common thing is people ⁓ have an idea or they’re really good at a skill, but they are, they’re not a business person. Right. So they don’t have a proper, just a, just a proper business plan, whether it be from, you know, sales, marketing, pricing, ⁓ you know, advertising, ⁓considering cash flow and not knowing the unknowns. know, like we talked about licensing and insurance to have those things in place and to understand the costs of all those in your overhead. ⁓ So that’s what I see most often is again, just going in and getting blindsided or not having the cash that you need to be able to, you know, basically carry yourself for the first year or two until you can build your business and start getting the consistent cash flow that you really need to make it a long-term thing.
Dylan Silver (19:13)
Yeah, I mean, people think, especially in the real estate game, that they’re going to have an overnight success. And maybe that was maybe more feasible six years ago. But but right now it’s difficult to have some faster exits. And I think we’re seeing that not just in one segment, but in multiple. Right. And where I’m licensed in Texas, it’s harder to flip. If you’re a fix and flipper, it’s just a little bit more challenging, especially when you’ve got new homes that are two hundred forty thousand dollars. It’s tough to compete with that.But in general, think this idea that the fast money is truly the slow money, It’s simpler to wait and to see long-term appreciation than it is to try to have a quick exit. I think we’re seeing more and more of that. But we are actually coming up on time here though, Ken. Any new projects that you’re working on or how can our audience reach out to you ⁓ or your team?
Ken Kostecki (20:05)
Okay.Yeah, sure. Yeah. As far as projects, we love doing home additions within the city of Richmond in the area. You can now do auxiliary dwelling units, ADUs, so you can build a tiny home in the backyard. In fact, we didn’t really talk about it, but my short-term rental is ⁓ an Airbnb property in my yard. That’s what I’m sitting in right now. So if you want to rent this property, I’m sure you can look us up.
It’s the Little Sanctuary, if you’re looking in the Richmond area. As far as my business for Maison construction, like I said, if you want to do a kitchen, a home addition, or build your own short-term rental or ADU property for your personal self, you can find us at www.maisonrva.com or give us a call. It’s 804-337-8100. I will pick up the phone. It goes right to me. So be happy to talk to you about any project that you have.
Or you can submit a project inquiry online. There’s a button for project submission on there. Put your confirmation or your information in there and the details of your project and will be reaching out.
Dylan Silver (21:13)
Ken, thank you so much for coming on today. Thank you for your time.Ken Kostecki (21:15)
Yeah,was my pleasure. Thank you so much for the opportunity again. I really appreciate it.
