The Wisconsin Investor

From $100M in Real Estate to Federal Prison — The Lessons That Rebuilt Everything

• Corey Reyment

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Corey sits down with Mike Morawski, a longtime real estate investor who’s seen every side of the business — massive growth, catastrophic failure, federal prison, and redemption back into multifamily investing and coaching.

Mike shares how he went from:

  • Building a $100M+ real estate company in 30 months
  • Owning 4,000+ units across five markets
  • Managing 7,500 units and 100 employees

…to losing everything after the 2008 crash due to:

  • Growing too fast
  • Overleveraging
  • Being undercapitalized
  • Ignoring red flags
  • Failing to communicate transparently with investors

The conversation goes way deeper than real estate. Mike opens up about prison, humility, faith, mental health, leadership mistakes, marriage, listening to your spouse, and why real success is built through lessons learned the hard way.

This isn’t a guru episode.
 It’s a “learn from my scars” episode.

📘 Want to go deeper? Mike is the author of Multifamily Investment Secrets, where he breaks down creative multifamily strategies and hard-earned lessons from decades in the business — you can check out the book here: Multifamily Investment Secrets


🔗 Connect with Mike Morawski

Website:
http://mikemorawski.com/

Free eBook – Multifamily Investment Secrets:
https://multifamilyinvestmentsecrets.com/

Social Media:
Facebook: https://www.facebook.com/mike.morawski.54

Instagram: https://www.instagram.com/mike.morawski.54/

LinkedIn: https://www.linkedin.com/in/michael-morawski/

TikTok: https://www.tiktok.com/@mikemorawski

Speaker:

Welcome back, everybody, to another episode of the Wisconsin Investor. I am your host, Corey Raymond. And as always, guys, I'm excited for our guest today. You guys have had a few solo episodes with me recently, so I'm excited now. We're getting some great people in here for you guys. Before we get into today's episode, though, guys, real quickly, uh, if you guys are looking to scale here in 2026 and you want to use the Burr method, we have a free Burr for Beginners course that we're giving away. So to get that course, just go to Wisconsin Discount Properties.com, plug your information in, and somebody from my team will reach out to you and have a conversation about how to get you that discount code and the link to get that course for free and hopefully help you scale your portfolio significantly here in 2026. And with that, speaking of scaling, I have Mike Moroski with me today. So, Mike, how are you doing? Good, Corey, how are you?

Speaker 1:

Man, I'm super excited about this today.

Speaker:

I am too, man. You and I had a chance to connect the other day on the phone. And uh uh Mike's a referral over to us from Chris Hake, who was just on the show. So if you guys haven't listened to Chris's episode, he's another veteran who's been in this business for a long time. And uh he connected me to Mike here. We had a good chance to chat, and I was like, man, Mike, we might have to have a Joe Rogan-style episode with him because there was so much there that we could go into. But Mike's been uh he's been in this business for a long time. He's controlled over 450 million in real estate transactions. Guy's an entrepreneur, author, real estate trainer, public speaker, coach, and the chief investment officer of a multifamily hedge fund. So uh Mike's been Mike's been through some tough things uh, you know, in his BIOS is with a strong personal resilience and deep desire to help others live an extraordinary life. He's coached hundreds of real estate investors to fulfill their dreams. And uh I know some of the stuff we'll probably get into today is some of the personal resilience that you've had to go through, Mike. I'm sure we'll get there at some point. But uh uh anything else you want to add to to what I just mentioned there about you know how you got started in this business and and you know some of the some of the early beginnings of where this all stemmed from, getting involved in real estate.

Speaker 1:

Yeah, you want me to you you want me to just jump in, Corey, and and uh tell my story. And I would love it, man. You can, you know, if you need to stop me anywhere or uh you know interrupt me, feel free to, but love that, man. So I've been in real estate for 30 years. Before that, I had a general contracting business. I was building room editions just outside of Chicago. Uh we were building about 25 room editions a year. And Clearly, you know, being an entrepreneur, you are so involved in everything, right? So I was doing the marketing and the sales and the contracts and the ordering and the planning and the hiring, the firing, the bookkeeping, and I was still in the field banging nails. And I was like, man, I can't do this anymore. And I remember clearly waking up in bed one morning, looking at my wife at the time, going, I can't do this anymore. I'm done. And you know, fortunately, I had somebody knocking on my door uh to buy my business. And I so I sold the company and I said, Okay, I'm gonna take a year off. Well, you know, as an entrepreneur, I don't think any of us take time off, you know.

Speaker:

Maybe a week, maybe a week, right? And you're like, all right, I'm bored.

Speaker 1:

Or a weekend, right? Yeah, yeah, exactly. So I uh uh I decided uh to go buy a couple of two flats and rehab them. Okay, this was what I was gonna do with my year off. So I rehabbed a couple of two flats, and and during that process, I met a real estate agent who was extremely successful. And this is 30 years ago, and somebody selling a hundred houses a year 30 years ago was unheard of. Okay. Um but um I went to him and I said, Hey Todd, you know, I I think I'd like to go in the real estate business. And he said, Man, I think you'd be great at it. And uh he he encouraged me to go get my license, which I did, and I went to him during that time and I said, Hey, you know, could I shadow your team? And he said, No, he goes, I'll do one better for you. Now, Corey, I'm gonna date myself a little bit, but he said I'll I'll make you a cassette tape uh that you can listen to and it'll give you all my systems. I said, Great. And um, I say I'm gonna date myself because I don't think you could find anything to make a cassette tape on.

Speaker:

Right, exactly.

Speaker 1:

Um, but he uh, you know, I listened to this cassette tape and and I equate it to like these podcasts, right? People want to go back and listen to this over and over again. But I took this information and I devoured it. I became a sponge, I made it part of my DNA, and I went in the real estate sales business as a residential realtor. Uh I sold 78 houses my first nine months in the business. Whoa. Went on to build a team selling 125 homes a year. I was work uh remax rookie of the year that first year. Nice and just crushed it in the real estate space. And yeah, in 2005, I saw the market shifting and changing, and I knew I was gonna need to go do something else. I wasn't exactly sure what was gonna happen, but I had always wanted to go in the apartment business. And and here's what I knew about the apartment business because I I when I was in the construction business, I did some work for a couple of big contractors or syndicators in the Chicago market. Okay, and um I I understood this. You raise private money from individuals, you marry it with the great real estate deal, you stay in the middle, and as long as everything goes well, everybody makes money. Right. Key point, as long as everything goes well.

Speaker:

I was just gonna say that, as long as everything goes well, yeah.

Speaker 1:

So 2005, I decide I'm gonna syndicate my first apartment deal, and I run around, I'm looking at deals, and and I write a contract, and I get a deal accepted, and I'm so freaking excited, Corey.

Speaker 2:

Yeah.

Speaker 1:

I'm like, and then all of a sudden I realize crap, I gotta raise money for this thing. How am I gonna do that? So I did something very unconventional. Um, I put a small little $45 ad in the classified section of the newspaper, and I said real estate investors wanted it. And my phone rang off the hook for about six days. I wound up raising about eight hundred thousand dollars from that ad. Closed my first deal and had, you know, most of the money for the second deal, which was a 64 unit in Indiana. Wow. But what I wound up doing was over the next 30 months, I built a hundred million dollar company. We went out, we bought 4,000 multifamily units. We built uh in five markets around the country. We we uh put together a property management company and we were managing 7,500 units. Wow. I had a hundred employees working for me. And Corey, I always tell people I made five mistakes along the way. Yeah, one was I grew way too fast.

Speaker:

I was gonna say 30 months to do that. That's incredible. I mean, wow.

Speaker 1:

Nobody should ever grow that fast. Yeah, um, I was over uh leveraged, so everything we owned, we owned at 85% loan to value. Okay. And um, you know, I teach people today in my coaching program that you should be at 80 or 65 percent at at a minimum. Okay. Uh because you need that equity tranche. Yeah. And then I didn't have enough money. Um, I was undercapitalized as a business uh owner operating a business. I had a hundred employees and we're in five markets, and you know, week to week figuring out how you were gonna make payroll, and um and then I didn't pay attention to the details. You know, today one of the things that gets talked about a lot is asset management. And back then, you know, we didn't talk about asset management, it was property management, and and it was just a disaster. And then the fifth fifth mistake I made was I didn't listen to key people around me who saw things happening in my business that I didn't see happening. Yeah. So fast forward a little bit, 2010, we started to get crushed because you know, in 2008, the world hit the worst economic crisis. And by the fourth quarter of 2009, we were done. We were coming off the rails. And um because we grew so fast, we were unstable, we didn't have capital, um, occupancies dropped. Uh, you know, I was in I was in markets like the Ohio Valley where you know you didn't have multiple employers in those markets, and people lost their jobs, and industries went sideways. And you know, uh when you when you and and you know, kind of in my defense, I thought, well, this is a recession. This will last 17 or 18 months, it'll it'll correct 10 or 12 percent, the markets will bounce back, we'll be okay. Yeah, well, that's not what happened, right? I mean, it lasted seven or eight years, the market gains 47 percent. We're upside down. It was a hard storm to battle. Sure. So I had a number of deals that were were operating well, and a number of deals that weren't operating well. I had 38 different companies. Oh my goodness. We started to move money from between companies to try and keep the ship afloat, thinking the market was gonna bounce back. And you know, my accountant and my attorney both said it's okay to move that money back and forth, just leave a paper trail, uh, which I did, but I never told my investors. So you know, we're in such a business that we have to be very transparent, and we're held at such a high level. You know, if you give me if you borrow me a dollar or invest a dollar with me, I need to report to you and tell you what I'm doing with that money. And I didn't do that, and because of that, I wound up getting charged on wire fraud and mail fraud charges, and I got sentenced to 10 years in federal prison. Wow. So we just got crushed, we got wiped out. Um, I wound up going to prison in 2013. I served eight years. Wow. Been back home, it'll be six years in March that I've been back home. And um uh, you know, somebody might think, man, you're done. It's over. Right, right. I actually went into prison thinking I I'm done. Um and what I realized was I didn't have to be done, you know. Okay, okay. You know, I I walked in and and I always tell people, I say, hey, I never flew private, I didn't have a boat, I didn't have a big house, I didn't drive a fancy car, I was the neighborhood baseball coach, I was home most nights for dinner, and I got ripped from that to live in a 12 by 12 room with three men I didn't know nor did I like, wondering what the hell happened in my life. Wow. And um, you know, I was in prison about six weeks, and every day I was walking around trying to figure out how I'm gonna get through today, much less 10 years, because you know, Corey, I'd gone from this great lifestyle or what I thought was a great lifestyle to nothing. And, you know, I hated myself. I was 35 pounds overweight. I'd gone from running marathons to to being 35 pounds overweight, I hated myself. I probably would have killed myself if I had the courage to have done so. Wow. Um but uh I was in prison about six weeks, and I walk in the gym one day, and and mind you, I'm only window shopping. I was looking for somebody. I wasn't looking to pick up a weight or but this kid walks up to me, and I said kid because he was like 25 years younger than me. Yeah, yeah. And and I walk he walks up to me and he goes, Hey, look, man, he goes, Don't let these people beat you. All they want to do is take from you everything you've ever known, everything you've ever had. They can destroy your business, rip your family apart. But what they can't take from you is who you are and what you know. He said, They can't take from you your uh inner uh ability to go back and rebuild your life when this is over. He goes, make this the greatest time you've ever had. He goes, Come to my class every day, start working out, you'll start losing weight, you'll start to feel better, you'll get more energy, you'll think clearer. And I don't know what it was about this kid's wisdom, but I said yes. And it was like somebody flipped the light switch, you know.

Speaker:

Yeah, I was gonna say that's pretty, pretty wise for for, I mean, that's pretty prophetic, like yeah, in prison that you're getting that kind of uh you know, insights. Advice, yeah.

Speaker 1:

So I start going to his class, I start working out, I start losing weight, I'm feeling better about myself, and um uh the next thing I know, I'm in college. I got a four-year bachelor degree in theology. No kidding. I wrote two books, I wrote an ethics course. Um, I taught real estate investing, property management, and ethics in prison for six years. I was on an outreach program. I went into the community, I told my story to small business owners and local college students. Um I I um I wrote a paper, uh, co-authored a paper with a professor from the University of Minnesota that he and I uh got published in the Business Journal of Ethics that gets taught today at the collegiate level for forensic accounting and sales and marketing classes. And then, you know, then I came back home and and I thought, well, I'm gonna go in the coaching and training business and I'm gonna teach people how to syndicate deals and and not make the mistakes I made, right?

Speaker:

Yeah, yeah.

Speaker 1:

And so um so I did. I went in a coaching business, but I knew I was gonna have to learn how to underwrite again or teach myself those fundamentals again so that I could teach people how to underwrite. And so I'm underwriting deals and I'm building relationships with brokers along the way, and I come across a deal in Florida and I go, shit, we should buy this thing. Okay, this is why I'm sorry.

Speaker:

Yeah. You go, you go for it, Mike. Go for it, man.

Speaker 1:

I go, uh man, we should buy this. So I go to two of my coaching clients and I say, hey, I think we should buy this deal, and we did. We wound up buying this deal in Florida. Um, but in the process, my our securities attorney got me um approved by the SEC to be able to go back and be an issuer of securities, to raise money again legally, to um not have that uh uh lingering pain of prison and the felony over my head anymore.

Speaker 2:

Yeah.

Speaker 1:

Um, so you know, my world's kind of totally spun around. But, you know, along the way here, the the redemption piece, right? I've written three books. My third one was just an Amazon bestseller. Um I've I've got a great coaching program, you know, I birthed a partnership program, you know, back in the multifamily game. We own and operate property uh around the country again, and you know, uh investors are are seeing returns and having great results from what we're doing. And you know, I love what I do. So people have said, why don't you go do something else? I said, because I don't know how to do anything else. You know.

Speaker:

I'm good at this one thing, like let me just do this thing, right? Yeah, exactly. Man, that is an incredible story, Mike. I mean, the I'm just sitting there putting myself in your shoes and I'm going, goodness gracious, like if I would would something would come up like that where you weren't intentionally doing anything you thought was harmful or whatever the case is, and it winds you up 10 years in prison. I mean, those are some pretty significant consequences that we as business owners need to pay attention to and make sure we're doing things right, you know. Like I didn't go to I didn't go to school for business, I went for exercise science, right? So I don't I don't know, I'm I'm making this stuff up as I go and having great conversations with guys like you or mentors or getting involved in mastermind groups and surrounding myself with people who are, you know, at a further stage, but there's still things I learn all the time. You know, like I I'll get uh I just was battling with Florida about their, you know, this is a minor thing, but it's things I don't I've never been taught this stuff. There's like an unemployment or reemployment tax that I had to apparently fill something out when we didn't have employees in Florida anymore. And that's so I still get billed every every quarter. And I'm like, what is this? I don't even know what this thing is. I'm Chat GPT and what the heck is reemployment? Like, how do I get out of this thing? And it's just that's one small example. The consequences are a few hundred bucks because I didn't do something right. But it's just one little thing that we don't always know a lot of these things until we get into them. And you you unfortunately got caught in a in a very serious one that you know, hopefully people listening to this can learn the stakes here uh if they're going out and ra raising money, right?

Speaker 1:

Right, right. Yeah, you have to be cautious. You know, you're in a you're in a business that you need to be very transparent in and about so yeah.

Speaker:

Now I want to go back and unpack a few things here. Uh one thing you talked about earlier, Mike, you said, you know, you you got this cassette tape going back to the real estate agent days and you devoured that uh information and you listened to it over and over again, and there was a system in there, right? Um, I think for me, as you were saying that, I'm like, that's how I built my business, right? Like I followed somebody who was at a place I wanted to be. They gave me a coaching program, I followed it to the letter, and it worked and it was successful. And I think a lot of times people out there are trying to kind of make this stuff up and come up with their own way to do things. And it's like you don't have to, somebody's already invented the wheel. Go find that inventor, you know. And so for you, when you're talking about things like that with coaching and that sort of thing, I just think that's an important thing. You know, if if somebody wants to learn syndication, here you are, you're here today, right? Like you're the guy to go learn learn this stuff from. Don't try to make it up, yeah. Come up with it because the stakes in the syndication world are, as you see, very serious if you don't do things properly, right?

Speaker 1:

Yeah, 100%. Right.

Speaker:

Yeah.

Speaker 1:

Yeah. Yeah. But hey, you know, you you mentioned a couple good uh a couple interesting things there, following the system, right? So I heard Jim Rohn say years ago, uh, you know, I'm I always been into motivation and and listened to Zig Ziggler and Jim Rohn and Brian Tracy and you know, all the old names, right? Yeah, um, but Jim Rohn said he said, look, if you want to be successful, uh go follow people's success or even their failures. And you know, just because I made mistakes, you can learn from those, right? Oh, 100%. I had a I had a I I never thought I'd raise money again, Corey. And I was doing a uh meetup one afternoon, and there were about 150 people. I'm telling my story, and some guy, and I don't even know who it was, this is about four years ago now. He said, Hey Murowski, are you raising money yet? And I said, No. He goes, Why not? I said, I you know, I honestly I don't have a good answer for that. He said, Well, when you start raising money, let me know because I wouldn't want to invest with anybody other than you because you've made the mistakes and you know what to watch out for. Ah, that's so good. You know, it yeah, he was like, Wow, that makes a lot of sense, you know. So um you know, it's been a journey, that's for sure.

Speaker:

Yeah. Well, there's a there's a hum there's a humility. To that too, Mike. I think anybody who's a great leader has a lot of humility, right? And they'll they're willing to talk about their mistakes and their failures and be vulnerable in a way. But I think once you you probably realize this, I had I'm guessing just uh off of that conversation with that gentleman, but probably throughout the years, maybe even in prison, as you started teaching things on the ethics thing. But um, you know, most of the best lessons we can learn from the best leaders are through their failures, not their successes. If somebody only talks about the successes and the things that are going really, really well, it's hard to really trust or believe that person because we all, like I said, if you're in this bit in any business, you've made mistakes and you've learned you've learned some lessons that somebody else can learn from in this business. And that's a lot of why I love doing this podcast, man. Everybody that comes on here, yes, we talk about successes, we talk about the wins, but we also talk about lessons learned a lot of times, you know, throughout the what it what didn't go well, so that the listeners out there can learn from that and make sure that they're not making those mistakes, you know, speed the curve up a little bit, right? Through the failures. So I applaud the humility, but I that's actually a superpower I think that you have out there as as we're getting to know each other and I'm listen listening to your story, like that is a huge superpower I think that you have is that humility to to go out there and just be vulnerable of hey, this is where I messed up, I went to prison, this is why, and don't do what I did, you know. And people are attracted to that.

Speaker 1:

Yeah, and there's a lot of people that hide it, you know. I mean, I I I came home with some guys that, you know, today still won't talk about it, you know. And you know, I think that's the worst thing you can do, right? Um, because you know, there's I I think it's also goes to integrity, you know. I mean, if I tried to hide it and somebody sees it on Google, you know, and and yeah, I don't care how much money you spend, it never goes away. You can't, you know. Um so so some of these these people I know have just crawled under a rock. Yeah. So it's it's kind of sad actually.

Speaker:

But yeah. When did you so when you went to prison, Mike? I mean, talk about your mental state going in there. You did a little bit earlier, and then was it really just this conversation with the young buck that got you working out that started to shift things for you, or was there some other moments there where you started to realize like I need to get this story out? Because you were talking about in prison you were taking action and and and getting your story out and and turning it around. But was it just that one conversation, or when was the really point where you realized, like, hey, I I I can start now. I don't have to wait till I'm out of here. So I was a wreck.

Speaker 1:

You know, when I went in, I was a wreck. Uh, you know, I had uh you know, I have five kids, Corey and um, you know, um three of my kids still don't talk to me today. Umest ones were were five and six, four and five when I went in. Um my middle ones were fifteen and sixteen. Um and then my oldest daughter was thirty, I think, thirty-seven. Okay, okay. So um that was hard. But I was in prison two weeks and I got served with divorce papers um from my my wife and um it just wrecked me. And Corey, I I literally, and this is you know, I I cried for eighteen months every day. Wow. Uh there were times in the beginning that that you know guys had to come and find me in the in the balcony in the in a chapel um because I was you know curled up in the in the fetal position and couldn't move. Um and there were three or four guys around me um that paid attention to me and made it their mission to make sure I was gonna be okay. Wow. And and this kid happened to be one of them um who kind of came out of left field, you know, and I don't know what it was about that conversation, but it was just like, okay, let me, you know, let me get my arms around this new life that I have. Yeah. Um I said like I said, you know, I didn't have a big house or a fancy car, we didn't have a boat, but you know what? We we had a decent life. And you know, we were going in a really positive direction until the market crashed. And um, you know, we we were we were a blessing to a lot of investors for quite some time. And you know, all of a sudden the rug gets ripped out from underneath you, you know, and it's like what the hell happened? Um it's a shock to the system, right? For sure. But it took me two years to really get my head in the game to say, okay, I'm gonna I'm gonna make something of myself. I'm gonna go home, I'm gonna be a different person. Um and and and I am, you know. I mean, you could talk to some of my buddies, you know, and there's you know, it's really funny. You know, we hear all these cliches about, you know, you really you you really find out who your true friends are when you're really testing, right? Yeah. And everybody I thought was my friend, there's there's one or two people that are around today from back then because everybody was like, you know, including three of my kids and my brother, you know. Um, but but nobody's taking the time to get to know me either today, right?

Speaker 2:

Okay, okay.

Speaker 1:

But I have a very close friend uh who says, Man, you know, you were an asshole back then. He goes, You're you're not that guy today. And yeah, you know, it's it's interesting the change you go through. So yeah.

Speaker:

Well, I think when you get, you know, if you had some kind of ego or something back then that uh was causing that that you know outward asshole come to come out of you a little bit, you know, that probably got stripped going back to the humility piece. Uh you were you're you were down to nothing in prison. I mean, literally everything gone.

Speaker 1:

You know, Chris Hink could probably tell you the same thing.

Speaker:

Okay. Yeah. All right. I'm gonna I'm gonna ask about that. I'm gonna ask about that. But he was the first guy. I said, hey man, uh uh we had a great conversation, and uh I said, hey, and who who else you would you know that would be great for the audience? And you were the first guy that you brought up with without even a hesitation. So uh, you know, obviously he he thinks highly of you to today. So maybe not maybe not as much back then. Yeah, we're great friends. So that's great. That's great. Let's go to those five different lessons, Mike. I want to break those down a little bit and just kind of if you can give a little bit more in there. You know, the first one was you grew too fast. Like what what were let's break that down into maybe some subtopics. What were some of the some of the I I guess today, if you're coaching somebody, what are you what is the appropriate pace? And how did what are some signals where you could look at and say, man, I think this person is growing too fast, like as you're looking at other people's businesses now?

Speaker 1:

Well, um, what happens is you lose control, right? And and I'm such a visionary, Corey. I see the big picture and I'm gonna go make that happen. I thought I had a team behind me that was handling all the day-to-day activities, the construction, the management of all that, making sure everything was operating. And and I would pass my partner in the hall, and my partner, I'd say, How's it going? Everything's great, man. Have a good day. You know, that was it. Um, we I mean, we had meetings and things like that, but I didn't pay a lot of attention because I thought somebody else lost it, right? Today I pay a lot more attention. But that growing too fast piece, what happens is you start adding assets to your portfolio. And if you're not stabilizing the ones that you've added, you you you create all this instability in your business, in your portfolio. And so we had, you know, we had 3,000 units that uh, you know, we in the beginning it was a little bit slower growth, but then we hit the ground running and we had, you know, all these units with all this construction going on, and you know, and then uh, you know, when then you find out things are happening and not happening, and there's problems and there's itch issues. And so now you're trying to to get all this together. And you know, there were times I I you know went back, and I don't want to get off the beaten track, it's just that that growing too fast, that instability really can cause you to lose control. And that's what happened. We we lost control um in in a problem market.

Speaker 2:

Yeah.

Speaker:

Was the was the growth spurred because you had all this capital coming in that wanted to get put to place, and so you felt a pressure to acquire more units to get that capital out there working, or what was the yeah, we had people including banks, throwing money at us.

Speaker 1:

You have to remember back then, I don't know if you were in real estate back then. I wasn't back then you could fog a mirror and walk in a bank and they'd give you a loan. Right? And they were loaning money at a at 125% of property values, right? And they were giving you two loans. So the residential market was crazy, yeah, but the commercial market was just as bad. And they would just they they would give you loans, you know. Yeah, uh they didn't care about an asset, they just sign your name, boom, yeah, you know, and non-recourse, all of it non-recourse. So um, so and then I did uh so for two years, Corey. Um are you familiar with the book The Millionaire Real Estate Investor?

Speaker:

I I think I've read that book, yeah.

Speaker 1:

Yeah, it's I don't remember that. It's been a while.

Speaker:

It's been a while.

Speaker 1:

Written by Gary Keller. I was a Keller Williams agent for a number of years.

Speaker:

Yes, that's where it is, okay.

Speaker 1:

But he he in that book he teaches a process. So there was a whole program, and I taught that program for two years every week in our uh conference room in our office on Tuesday and Thursday night, we'd have 20 people, 20 different faces that would show up for two years, and I taught how to invest in real estate. And at the end of that, I would always go, and by the way, if you're somebody who just wants to invest in real estate, we have this deal going on, and we had people just throwing money at us.

Speaker 2:

Wow.

Speaker 1:

I had people at those events, they'd sit down, they'd want to whip out a checkbook and write a check for a hundred thousand dollars, and I'd be like, Hey, I can't take your money today, you know. You gotta go home for three days, cool off, let's get to know each other later, you know, let's have a cup of coffee, come back, meet my office staff, you know. Um and uh, you know, uh so we I raised, you know, I raised 18 million dollars in 30 months. So it was crazy. But we we we didn't spend it. We we bought real estate with it. I mean, we owned and operated 200 single family properties uh before we went in the apartment business. Oh so you know, my my whole career has been investor based.

Speaker:

Yeah, yeah. Going back to the growing too fast thing, you know, some of the lessons I'm I'm learning this year, uh, we started flipping more property. We're we primarily wholesale real estate. That's the main bread and butter. And then my wife and I have our own portfolio of rentals and short terms and things like that. But um we started we started adding in more flips on like, you know, hey, somebody, so none of our buyers bought this deal. We still think it's a great deal. Let's just flip it, right? And same thing, like we're, you know, trying to put everybody in their own lanes in our company, like, okay, you do this job and you do this job, and that's all you should focus on. Well, then we we were stretched a little too thin and we had to start kind of putting adding different pieces of this flip component on different people on the team who are trying to focus on their main thing, right? And now we're throwing this whole set of skills, different, then we have no processes, no nothing around it. And all of a sudden we got five or six of these things going out of nowhere. No, really, but anybody that has project management experience other than their own investments, they've done one or two here there, right? Yeah. And pretty soon, like I'm getting, you know, three months later, as you're saying, Mike, now all of a sudden these problems start coming up. Like, oh, there's a well well and septic. Well, did we get a well and septic inspection on it? No. Oh, how's the well and septic on it? Let's get an inspection. Oh, they're both bad. There's $35,000 down the tubes, right? Oh, there's another one that was in the there was a one in a city. It was like one of the last ones that still had well and septic that never got annexed in. And well, the septic's bad. I'm like, oh, this one, luckily that one's just we can do a holding tank on it. There's $5,000 we were budgeting for though. You know, it's like all these little things, and now you got five of those things, and the problem compounds. I ran into that same issue with my first multifamily property I bought. I bought a 16 unit in like 2019. And I remember like budgeting and running the numbers and doing this, and I'm like, I think this is a great deal. I I didn't listen to another seasoned investor, bought it. Turns out at long term it is a great deal. It it worked out well. But had I not had the wholesale business income coming in and a good surplus of income off my expenses, like extra capital to put in, I would have probably gotten sunk on that thing because all of a sudden I had four or five units that were vacant at one time, and now I got to rehab these four or five units to get them back on the market. And I mean, that's a pretty capital-intensive thing for a one-man band without raising any extra capital. And so again, I think sometimes the sexy thing for the audience out there is like, let's go get a million units and we'll do all the and we'll grow really quick or whatever. And I think we, you know, we forget like these things are still gonna need money to be put into them after you buy them, and you're gonna have to have a runway of a while before they're fully stabilized, and then your problems with as you add more units just compound. Yes, the returns can compound, but so can your problems compound as well if you're not running your numbers properly on the front end and budgeting and getting out in front of some of these things.

Speaker 1:

So you know, it's kind of funny. Um uh you know, those problems really can and they eat you alive. But here's the thing about real estate is real estate is forgiving. So you mentioned it, you said, you know, long term it'll be okay. You got to just sometimes hold longer than you anticipated, right? And and real estate will be forgiving because the market cycles, right? It's all about market cycles. Corey, there's no geniuses in the business, it's only market cycles. And right, so you know, you you you could have no experience and and a lot of experience and do equally as good or bad.

Speaker:

So yeah, yeah. I always say uh if you hold a property, if you can hold a property long enough, you always look like a genius down the road. Right. You know, it's amazing. Like I bought some of these properties 2016 is when I got started. And so, you know, I look back now and people are like, man, you got such a great deal on that. Amazing. And I'm like, not I mean, at the time it was an average deal, it was okay. I just happened, I just happened to let the market work in my favor over time, and now I look like like I knew what I was doing. I had no clear.

Speaker 1:

I got a great story about that for you. Yeah. Yeah. So in 20 in 2007, we bought a deal, 450 units, um, and we paid 15 million for that deal.

Speaker:

Okay.

Speaker 1:

Um, and I did creative financing on it because the seller wanted out of the deal so bad. And it wasn't a bad deal. It cash flowed a couple hundred grand a year. Okay. Net cash flow. Okay. So um, so we did a creative financing deal on it with very little money down. And I've kind of pivoted in some of my teaching today because that's what I I teach today is is little or no money down financing and you know how to how to be creative because I think we're in that market cycle right now.

Speaker:

Yeah, yeah.

Speaker 1:

But anyhow, I I in one of my books I tell the story about this. Um, so we buy this deal and we run it for you know about five years. We get out of it, you know, uh ultimately get out of it. Our investors do real well. Yeah, but two years ago I met a guy who bought the same deal. Now I bought it at a 13 cap. Oh wow. He bought it at a three and a half cap.

unknown:

Whoa.

Speaker 1:

He paid 60 million for an asset I paid 15 million for. Now, can you just now I just tell this story because it's like, man, if we'd have just held that thing, yeah, that would have made all of our problems in the world go away. Right. In one deal.

Speaker:

Yeah. Wow. That's incredible, man.

Speaker 1:

You know, don't buy real estate, uh, you know, buy real estate and wait.

Speaker:

Yeah. Don't don't wait to buy real estate by real estate.

Speaker 1:

Yeah, don't wait to buy real estate probably with wait.

Speaker:

Right. Exactly. Yeah, yeah, yeah. That's what I mean. It is true though. I mean, if you can weather that, I mean, I know some some guys on the smaller scale that got through 08 and they are doing fantastically well with that portfolio, or, or they've sold off in the last couple of years and did really, really well. But you know, they had to wet they had to have that backing and that capital. I mean, I think that was another one of your things I wrote down. You talked about one of the other problems was being undercapitalized, right? Yeah. And and so they were fortunately, because similar to what I talk about with that 16 unit, like I fortunately I had some uh liquid capital that I could deploy to to keep that thing running when when all those units came vacant at the same time. You know, 2008, probably similar. Is that what you were referring to when you say undercapitalized, Mike? Was that thing?

Speaker 1:

You know, what happens is uh you start having occupancies drop out, you know, tenants not paying, delinquencies increase, and now you're undercapitalized. You don't have money to do what you need to do. Or maybe you're raising capital on a deal and you don't get all the money raised. And so you can't uh you can't initiate your the completion of your business plan, right? Okay. Um and you know, people think capital calls are bad. And in some cases they might be bad, but in a lot of cases they're not bad. For the reason we're talking about, you know, if you if I'm complete a capital call on a deal that I have and I hold it a little bit longer, everybody recovers. We recover, right? And people don't get that, they think it's bad, and and and you know, and and you know, I know that over time real estate's gonna be forgiving and you're gonna recover from the issue, from the problem, from the challenge. But you know, we were undercapitalized. I you know, we couldn't make payroll. We let a bunch of people go, we downsized. Now, part of growing too fast, one of the things we did was we hired a lot of talent for future growth. Like I met a woman one time who worked for another syndicator, big syndicator, and she all she did was their their tax um abatement stuff. So all she did was go through every property every year and and work with attorneys and get the tax abatements down to get the taxes increased. And I said, man, this girl's talented. And I hired her. We hired her, we paid her way too much money um at the time, but it would have been justified down the road. But you know, I hired two, three people like that because we thought we we were heading in this direction, never seeing the brick wall coming of 2008. Right. Right.

Speaker:

So what do you what do you advise people now on that? Because I that's something like I am always kind of balance trying to balance in my business, right? Is like, okay, I have this future growth, I need humans to do these things. As much as AI is great and all this stuff, it's not, it's not going to replace the human element, in my opinion, on some positions needed, right? And so I'm always kind of juggling that of like, I want to make sure that I'm growing responsibly and I'm, I'm, I'm not like I like I ran into with putting too much on my team as I tried to grow and stretch too thin. I'm also trying to balance like, okay, how do I get out in front of where I want to go and where I want this business to be as I look forward, say, in 2026 with my business plan? Like, what do you advise people on that side of things that are looking to grow and hire? And and how do you balance the future growth with not overhiring and growing too quickly to put yourself in a in a cash crunch?

Speaker 1:

Well, one strategy I like, Corey, is that if you can bring somebody on um for maybe some equity, right? Pay less and give them equity. Um and you know, that that's a strategy that can work. So, you know, if somebody, you know, let me make these numbers up, but if somebody needs to get 50 bucks an hour, but you can pay them 20 bucks an hour and give them equity, right? On the upside, um, make them work for it, right? Yeah. So that's good.

Speaker:

That's a strategy that can work. Yeah. I know I have a friend Tim Bratz. Do you know Tim? I know the name.

Speaker 1:

Yeah. Well I know Tim.

Speaker:

He's a he's another guy who syndicates a lot of multifamily and has an operation. He's out of Ohio. Uh, he does some coaching and teaching and things like that. And um, so I've known Tim for years. I was in a mastermind with him, and I actually belong to his mastermind as well now on uh multifamily acquisitions and that kind of thing. But uh he he's done that. Like so he has an attorney that's you know uh part of his his core group. He's got uh acquisitions guy and an operations guy. And I remember the attorney, I was talking to him years ago, and I was like, Well, you know, if you don't mind me asking, like, how are you compensated? And he was only getting like 50 grand a year as an in-house attorney, but he had this upside and this equity piece to it. So I mean, I'm sure he's doing way better than most attorneys now out there because of what that equity's worth in today's world. But uh yeah, that's a that's a really creative way to keep the cash, the cash flow still healthy and um give everybody a little piece of their work on the upside, right? On the future growth. Yeah, that's really good. That's really good. Um talking about the the um the key people thing, you know, we talk a lot about that and we've kind of touched on a little bit, Mike, but you said you had some key people around you that were advising you and you kind of brushed them off or whatever the case was. Talk a little bit about that experience. What were some of those lessons learned through that mistake?

Speaker 1:

Yeah, so this a little bit tougher conversation, and I'm gonna talk to the men in the room, right? Um so at the time, uh so there was an incident that happened in early 2008 where um I was trying to get a c a deal closed. I was in Cincinnati at the time, it was the biggest deal we had ever closed. Okay. Um 300 and some units. And um I was at the title company waiting for my office to wire over $500,000.

Speaker 2:

Okay.

Speaker 1:

And um and my partner, I can't get a hold of him. I can't get a hold of anybody in the office, nobody's answering, you know. Finally, about 10 to 5, my partner calls and he says, Hey, I don't know how to tell you this. He goes, but I moved five hundred thousand dollars from the escrow account to operations because we needed the money, and I thought I could have it put back by closing. I said, What did you miss about the conversation we had when we first started this business that you never do that? So long story short, um uh uh long story short, um I dry close. So we sign all the paperwork, I say I'll get it funded by Tuesday. I go home, I sell my partner's equity and the deal off to other investors to raise that money over the weekend so that we can close the deal on Tuesday, fund the deal on Tuesday. And um you know, that was the incident that happened, right?

Speaker 2:

Okay, okay.

Speaker 1:

Um I never told my wife about business. I never told her about anything we did, she didn't know about you know once in a while I'd say, Hey, we closed another deal, or I met this really interesting investor who invested a half a million dollars with us, or you know, and um so so she doesn't know this situation went on.

Speaker 2:

Yeah.

Speaker 1:

That happened on a Wednesday. On Friday, I'm back in in town, and my wife and I and my partner and his wife go out to dinner and we're coming home from dinner, and my wife looks at me and she says, I don't trust him. Oh um, and I said, You know, I think I'm gonna be a good husband at the time, and I go, Hey honey, don't worry about it. I have it under control.

Speaker 2:

You know, yeah.

Speaker 1:

And I didn't have anything under control, and I knew it at the time. And what I should have done though, and this is where I I really want to speak to the men in the room, is what I should have done was say, tell me more about that. What are you seeing that I'm missing? Because our ego is so like, you know, that we think we can't do anything wrong, right? Right.

Speaker:

And optimists, I think if you're an entrepreneur, you're an optimist, right? Like, no, no, that'll be fine. I can I can work with this guy, yeah.

Speaker 1:

Yeah. So that was one incident. On Wednesday, so remember that was Friday. On Wednesday, I'm out to lunch with my uh uh outside legal counsel, and this attorney, he was a friend, good friend of mine, and he had he had been our business attorney, syndication attorney. And um we leave lunch and we're in the parking lot, and he says, Hey, I don't know how to tell you this. I said, just tell me. He goes, but I don't trust your partner. Now I've got two people within a five-day period that are telling me they don't trust my partner, and I'm saying, Bob, don't worry about it. I got it under control, everything's good.

Speaker 2:

Yeah, you know.

Speaker 1:

Yeah, so those are the types of things that happen. You know, I think these red flags come up for us, and we we ignore them because our ego's in the way, because we think we know better, because we think we have it under control, and we don't. It's a mess. And you really need to pay attention to people close to you, especially if you have uh um a significant other in your life that is really close to you, or if you have a wife or a husband, you know, listen to them because they're they they're the ones that are seeing stuff you're missing. For sure. You know, I think that we all have an inner circle around us, and then in that inner circle are people really close to us, you know, like I would say Chris is in my inner circle, yeah. Uh, you know, and and this attorney was in my inner circle. And you know, I I just I didn't listen because I I didn't want to. I didn't want to believe it at the time.

Speaker:

Yeah.

Speaker 1:

Actually, when I got when I got indicted, one of the FBI agents said to me, he goes, You should have called us as soon as that happened. He goes, Maybe none of this would have happened if you would have.

Speaker:

Really? Oh man. I'd say like my wife is her intuition is so strong. Like, and I've learned we've been married now 17 years. And I've I've learned over those 17 years, like I used to fight it all the time. Same thing, Mike. I'd be like, what are you talking about? You're you're crazy, you know, and I'd make her feel like the crazy one. And I've just learned over time, like, no, she's really good at like picking up on things. And if she says she doesn't like somebody or there's something weird going on, or she's got a feeling about something, like 95% of the time, she's she's spot on. And so I should just I should again humble myself and go, okay, this is gonna be tough. I don't want to do this, but you know, like we've let some people go in the past from our company because she's like, there's uh something going on with that person. I don't trust them, they're not right. And I've been like, I don't want I don't like I don't like firing people. I don't want to have to do that, but yeah, and here's probably better.

Speaker 1:

This next statement will be good for a clip, but um you know, and I don't know where you're at in your in your spiritual belief or religious belief, but I believe that God puts a man and a woman together for a reason, and that's one of the big reasons that uh you know um somebody's always seeing something that somebody's missing. Yeah, and you know, it's you know, there's there's a purpose behind that, especially the longer you're married, you know.

Speaker:

Yeah, well, he says it pretty early in the in the good book, Mike. It's not good for man to be alone, right? Right. And so that's why, that's why they're there. He knew right away he looked at us, he's like, uh, you guys are gonna make some really dumb decisions if I don't give you guys a woman here. Let me get you something else here a little different that'll uh balance you out a little bit, right?

Speaker 1:

That's so true. And we could do a whole podcast on that time.

Speaker:

That's right, that's right, exactly. That's great, that's great. Uh no, this has been awesome, Mike. I I appreciate it. I know, I know you're a busy guy. You got a million things going on. So, man, I just really appreciate you taking the time to to to pop into this audience and and drop some of these lessons learned and nuggets and things like that. And like like I said with you, I you and I could probably sit and go, we can go down the theology road now. I didn't know you had this whole theology background. So I learned that about you, which we could do a whole other episode on that because that's uh a fascinating uh topic to talk about as well. And and uh big big believers in our faith over here at you know at at our company and our household. And you know, we know it's not not everybody that listens to this, but uh we we're obviously strong in in our faith and believe that it's a big part of why we're where we are today, wouldn't be there without it. You know, it's tough to get through some of these life experiences like you you described without having you know God or or Jesus there to uh you know lean on in those tough times when everything gets stripped away from you, right?

Speaker 1:

100%. Hundred percent. So um yeah. And you know what, as a believer too, you know, you you know you care what other people think, but you really, you know, you really can't, you know, because you gotta believe what you believe. And you know, you you either stand firm or you don't, you know. There's that whole lukewarm thing, right?

Speaker:

Yeah, yeah, exactly. Well, and and I I've come to this realization over the last year, I I do care what other people think, and I struggle with trying not to care what other people think. But then if I just really sit and think about like who actually cares or who do I actually have to worry about who cares about me, it's only the guy up there that I care, you know. At the end of the day, that's the person who's judging me. Right. I don't know when this is all over, right? We all come into this earth the same way, we all go out the same way, right? It's just um who's who's there to actually judge us once it's over. It's all I care about at the end of the day, if I'm if I'm thinking consciously about it.

Speaker 1:

You know, my mom is uh my mom's 92, and in her infinite wisdom, she always says there's two kinds of business. There's your business and mind your own business.

Speaker:

Yeah, yeah. That's good. That's good wisdom right there. See, you've got the young bucks helping you, and you've got the the elder wisdom, Mike. You're surrounded there. You've got your good circle around. But we always ask a little fun question here, Mike. So you're from the Chicago land area, now you're out west, west coast in it, but you've definitely been part of Wisconsin. Uh, you've been in Wisconsin, you've cut you've been to the Wisconias before. Um, we always ask, you know, do you have a favorite Wisconsin tradition or place you like to visit?

Speaker 1:

So um I've been telling a story from years ago. So when you know, when I was growing up, long before any of this happened or any of this was even a thought, we used to go to a place outside of Twin Lakes called Hooker Lake Inn. Oh, okay. It was an old barn, it was really cool. Yeah, but uh again, I'll date myself on this story. But man, I pull up one night with a friend of mine. We drive up from, you know, probably an hour and a half drive from where we could, and we pull up, and there's like a line out in front, and I'm like, Pete, what's going on here? He goes, I have no idea. Well, we're like the last ones that they let in and they lock the doors behind us. And um uh come to find out, Hart and Van Halen are playing in this place. What? Long before they're super famous. Okay, okay, crazy nice you know, I've experienced a lot of great bands and a lot of great times in Wisconsin over the years, you know. Yeah, yeah. A lot of a lot of fun. So Wisconsin is a great place to go. And that's right, you know, real estate is is alive and well in Wisconsin. There's no doubt about that. And even in, you know, I I I have a number of coaching clients from the Wisconsin markets um that uh have done really well.

Speaker:

Um yeah, we love it here. We uh I you know right now we're in the midst of uh it's literally been snowing, I think, for like three days at the time we're recording this. Um, but uh we can always get on a plane and go somewhere warm to warm up for a little bit, you know, come out visit you, Mike, maybe if you're doing any kind of coaching teaching L West, get out there, right?

Speaker 1:

Yeah, people always say, What's the weather like? I say, well, it's 70 and sunny 300 days a year.

Speaker:

So yeah, can handle that, right? For sure. Right well, Mike, this has been great, man. If people want to connect with you, if they want to get the books, I mean we'll put the if you can get me the links to the books, we'll put those in the show notes for sure. But uh, if they want to get set up with some coaching, they're interested in syndications, they're interested in just learning from you or just connecting with you, what's the best way for us to get that audience out uh to connect up with you?

Speaker 1:

Yeah, if somebody wants to read a book on multifamily, multifamily investing with some creative strategies in it, um, you can go to Amazon and and download multifamily investment secrets. Okay. Um that's you know, it's your explosive guide to wealth in the multifamily business. Um if you are somebody who's a social media buff, you can follow me anywhere, uh connect with me, follow me, like my stuff. Uh, you know, I'm always putting out some educational things, uh some inspiration, you know, just trying to help people grow, whether it's, you know, LinkedIn or Instagram or Facebook, um, YouTube, you know, um, I have a couple of I I do a live typically on Wednesday mornings every week where I broadcast on my channels. Um, and that's at uh typically 7 a.m. uh 7 30 Pacific time, so like 9 30 Central. Okay. Um and you know, if you want to connect, if you want to just have a conversation, or you're interested in maybe learning some creative strategies for your toolbox for 2026, uh, and you know, uh reach out to me. Um I do I do coach people and uh love to work with people, but I just love to network and have conversations. So if I can help in any way, just reach out.

Speaker:

Awesome, Mike. Well, you've helped uh I think a lot of people that are gonna listen to this. I think this is gonna be one of our most listened to uh uh episodes of of 2026. So I appreciate you coming on and taking your time. And again, I know you're a busy guy, and uh you just you're just uh you can tell you're a go-giver, man. So appreciate you being on, brother. Yeah, you bet, Corey. Thanks. It's been fun. Yes, absolutely. Guys, if you guys uh are looking to connect up and invest in Wisconsin, again, as I talked about at the start, go to Wisconsin Discount Properties.com, plug your information into the website. You'll get added to our buyers list where we send you off-market deals every single Monday morning, and uh we'll help you your your dealer, as we say, of deals. We'll deal you out some deals in 2026 and uh try to help you eliminate that issue as you continue to grow your real estate portfolios. You won't need to worry too much about deal flow if you're on that buyer's list because we're putting out typically three to seven deals a week. So get on that buyer's list, get some deals flow into your inbox. And uh, if we can help you and coach you, like Mike said, we're here as a resource as well. Even if you're not at that stage where you're ready to buy yet, you're just kind of dipping your toe in the water and you want to learn more about real estate investing here in Wisconsin, reach out to us and we're happy to connect you with the right lenders and the contacts and property managers and all that other fun stuff that we could be a resource for you on. So until next episode, guys, we'll see you then.

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Corey Reyment

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