RG 288 – 10 Years in Federal Prison: The Inspiring Story of Mike Morawski with Mike Morawski

Today, we share an inspiring story with you all. Meet Mike Morawski, the real estate veteran investor who spent ten years in prison for fraud charges and is now rebuilding his empire.

Michael “Mike” Morawski is a 30-year veteran real estate investor, investment consultant trainer, coach author, and public speaker who has handled over $285 million in real estate transactions and syndications. He hosts the podcast Insider Secrets by MyCoreIntentions where he shares advice, insights, and strategies for multi-family real estate investments. Michael has been an entrepreneur his whole life. And today, he devotes his time to helping others achieve extraordinary lives for themselves.

Mike is also the founder and owner-operator of My Core Intentions, a valuable resource where entrepreneurs can access education, training, and coaching services to build their own empires. Check out his website through the link below.

In this episode, Mike talks about how he went from fixing up houses to selling homes to syndicating, and the lessons he learned along the way. Notably, we talk about how he overcame the 2007 recession, the legal troubles that he faced, his ten-year journey in federal prison, and how he is integrating back into society today.

Mike has been on top of the world before it all came crashing down. Now, he is building his life back up and is generously sharing his inspiring story with us. Take a listen and see which parts of his story resonate the most with you.

Key Takeaways

• Growing too fast can lead to instability in your business.

• Seek good counsel and seek a lot of it; it will help you in the long run.

• Pay attention to your spouse. Listen to them; they might be noticing things that you don’t.

LINKS
https://www.linkedin.com/in/michael-morawski/
https://mycoreintentions.com/
https://podcasts.apple.com/us/podcast/insider-secrets-by-my-core-intentions/id1527669059

Be Bold, Be Brave and Go Give Life a Crack!

Reed Goossens (00:00):

Good day good day, guys. Now, before we dive into today’s show, I want you to let you know that some of you maybe aware that over the past eight years, I have built a substantial multifamily real estate portfolio here in the US worth over half a billion dollars. And in that time, my passive investors have received fantastic double-digit returns. And now you too invest directly into my deals for as little as $50,000. So if you’re an interested investor, head over to Reedgoossens.com to find out more that’s Reedgoossens.com. Now back into the show,

Mike Morawski (00:41):

Here’s what happened. I’m in prison about 17 days. And I always tell people, Reed. I said, I never flew private. I didn’t have a boat. I didn’t buy a big house. I didn’t have fancy cars. I didn’t have, uh, take expensive vacations. I, I was home every night for dinner. I was the neighborhood baseball coach. The, the school chaperone for field trips loved my wife. She was my best friend. We had a great marriage. I, I get ripped from that to live in a 12 by 12 room with three men that I don’t know and have three green outfits, five pairs of underpants, wondering what the hell happened in my life. And so I’m in prison about 17 days, and I get the, um, the message from my wife that she’s gonna divorce me.

Reed Goossens (01:35):

Welcome to investing in the US a podcast for real estate investors, business owners, and aspiring entrepreneurs looking to break into the US market, join Reed as he interviews go-geters risk-takers and the best in the business about their journey towards financial freedom and the sheer joy of creating something from nothing

Reed Goossens (01:55):

Good day. Good day ladies and gentlemen, and welcome to another cracking edition of investing in the us podcast from Los Angeles. I’m your host Reed Goossens good is always Abby with us on the show. Now I’m glad that you’ve all tuned into learn from my incredible guests and each and every one of them are the cream of the crop here in the United States. When it comes to real estate, investing, business, investing and entrepreneurship, each show, I try and tease out their incredible stories of how they have successfully created their businesses here in the us, how they’ve created financial freedom, massive amounts of cashflow, and ultimately created extraordinary lives for themselves and their families. Life by design. As I like to say, hopefully these guests will inspire all of my cracking listeners, which are you guys to get off the couch and go and take massive amounts of action.

Reed Goossens (02:42):

If these guys can do it. So can you now, as you know, I’m all about sharing the knowledge with my loyal listeners, which is you guys, and there’s absolutely no BS on this show, just straight into the nuts and bolts. Now, if you do like this show, the easiest way to give back is to give us a review on iTunes and you can follow me on Facebook and Twitter by searching at Reed Goossens. You can find the show, every you podcast on iTunes, SoundCloud, Stitcher, and Google play, but you can also find these episodes up on my YouTube channel. So head over to re goons.com click on the video link, and it’ll take you to the video recordings of these podcasts, where you can see my ugly mug, but the beautiful faces of my guest each and every week. All right, enough outta me, let’s get cracking and into today’s show

Reed Goossens (03:30):

Today in the show over the pleasure of speaking with Michael Morawski. Mike is a 30 year real estate veteran. He has control over 285 million in real estate transaction. He’s an entrepreneur author, real estate trainer, public speaker and personal coach with a huge, strong, personal resilience and a deep desire to help others achieve an extraordinary life. He’s coached hundreds of real estate investors to fulfill their dreams. And he’s got a really, really unique story that I’m super pumped to be sharing with you guys today, but you know, I’m sure you’re asking where the hell is he? Well, got enough outta me. Let’s get him out here. Good Mike, welcome to the show. How today, mate.

Mike Morawski (04:04):

Hey, thanks for having me on Reed. I appreciate it. Good to, uh, see you again. Yeah,

Reed Goossens (04:08):

Really good to see you again too. And a couple weeks ago we were on your show, right? Remind the listeners of where they can find that show. Uh, and what’s it called? Yeah.

Mike Morawski (04:16):

Thanks. It’s insider secrets. Uh, my company’s my core intention and we sponsor insider secrets and I, I like, you know, people say, Hey, how come you call it insider secrets? And I said, you know, because we talk about secrets, right? There’s things in this industry that we need to share with people. And, and that’s how we get that information out through, through these podcasts. So awesome. And we drop some great nuggets, so people,

Reed Goossens (04:39):

And it’s a, I highly recommend everyone getting, uh, going on to Google searching Mike Morawski that’s M O R A W S K I S and looking for those inside at secrets. But Mike, let’s get into the story today. I ask all my guests when I come on the show, uh, one the clock. And tell me how you made your first of a dollar as a kid.

Mike Morawski (04:58):

You know, I like this question because I have to pick from one of three places, but I’m gonna tell a story about how I, the first dollars I ever made. I, I sold newspapers. So, uh, I, my dad worked for a PA a newspaper in Chicago and he would take me in the summer and I couldn’t have been nine or 10 and put me in a, in the morning, early hours where I would sell newspapers. And what was interesting is he taught me how to count change. So, you know, you, one of the things you asked is how do you value money? You know, when we were talking earlier before the show, and, and I think I learned early on that you have to value money, you know, hang onto it. You know, uh, people do joked for a long time that I had my first dollar I ever, uh, I ever earned, but, but my dad taught me how to count, change. And, and I think today that we don’t see that everybody’s gotta put it in a calculator or in a cash register to figure it out. And, you know, it’s just a funny process, right. But I, I sold newspapers in the morning for a couple of hours and people had come in and I loved it because guys had come in and back then newspapers were 25, 30 5 cents and they’d gimme a dollar and say, keep the change. So I always loved that.

Reed Goossens (06:14):

Awesome, awesome stuff. My walk us through the early stages of your life and how you get involved in real estate and was, and was there a story before the entrepreneur, Mike, you know, because everyone does usually have a story before we get into the discovery of taking control of their life. What was yours?

Mike Morawski (06:30):

Yeah. You know, I think I’ve always been creative Reed. I think I’ve always, uh, tried to figure things out and do things better than somebody else. Um, I I’ve been an entrepreneur. I believe my whole life. Since that first time I had a lemonade stand, I was selling newspapers in a factory. I had three paper routes. Uh, when back when, you know, you could have a paper route and they don’t do that anymore, but, you know, uh, I, I, I didn’t come from a family of entrepreneurs. I didn’t come from a family that had any real estate, uh, aspirations or understood real estate. Matter of fact, I would ask my mom driving down the expressway, Hey, who owns that big building or who owns those apartments? And she would say companies, and I don’t think she understood that at the time or really realized what she was saying. But when I closed my first institutional deal, years later, it was with an insurance company. Right. I was, God, that’s funny how that came together.

Reed Goossens (07:33):

That’s awesome. That’s incredible. And so you just mentioned that you’ve gone from being a kid to, to doing institutional deals. There’s gotta be a gap there. What, what, what was the, uh, early young Mike in his twenties? What was he doing? You know, do you have a corporate career before he got involved in real estate?

Mike Morawski (07:48):

Never, um, went, uh, I worked for a swimming pool contractor. I, you know, I had some background with carpenter, you know, learning to be a carpenter and read blueprints. And a, and I remember my mom saying to me one time, Reed, uh, you know, why can’t you keep a job every six months you’re changing jobs. And I worked for a plumber, an electrician, a carpenter, a concrete Mason, um, a, a, a brick Mason roofing company. And it wasn’t six months after she asked me that question that I owe opened my first business as a general contractor and never look back. I was, I was working for a, a contractor in the Northwest suburbs of Chicago and the business was swimming pools. We built inground, concrete, swimming pools, and serviced them. And I would look at my

Reed Goossens (08:36):

Sure that can’t be a big industry in north Chicago in the winter.

Mike Morawski (08:41):

It’s really, it’s a

Reed Goossens (08:42):

Tough business. I can imagine. I can

Mike Morawski (08:44):

Imagine. Yeah, it’s a tough business, but you know, I would look at my boss and I’d go, God, I could do this better than you. Hmm. And I, one day somebody challenged me to go do it better than him and I did. Uh, so I, and I’ve always, always been self-employed since then.

Reed Goossens (09:00):

Awesome. I actually, it’s funny, you mentioned swimming pools cause I, I have a vivid memory of building a 25 meter lap pool in Australia. Uh, when I was 16 years of age, uh, summer holidays. And I’m in, you know, in a it’s hot as hell and you’re sort of whatever it is, eight feet, nine feet below grade tying rebar. And I just remember like backbreaking work, you know, bending over for 8, 9, 10 hours a day, going back to my dad and just like, I, you know, I can’t, you know, it was good money and 15 bucks at the time or whatever it was, you know, you working big long hours. But my dad said that stage is like, this is why you’re gonna to university. Cause you don’t have to rely on a skill, a backbreaking skill to, to keep you employed. And, and, and that, that sort of, I, I just, I, swimming pools have a very, very, uh, PTSD from that, those times of sweat in the trenches. But, uh, I’m sure it, I’m sure it wasn’t the same in, in north Chicago. I don’t know if you have the same sort of sweat conditions that we have down in Australia,

Mike Morawski (09:58):

You know, in the summer it can get be, it can get up over a hundred degrees here. Sure. Okay. So, you know, and it’s very humid, so, you know, I can relate and especially when you’re down below grade, so yeah. It’s interesting. Hey, you know, so here’s, here’s something that’s interesting. Right? Um, your, your dad kind of encouraged you to go to college. My dad, but I never did. Right. Mm-hmm I didn’t go to college and here’s, uh, here’s what I equated to. I read a thousand books from the time I was 20 until the time I was, or actually probably 23 till the time I was 40, my, my late forties. And, um, I always tell people, I say, listen, read books, that’s college. You know, I think I got a street smart education. My dad told me one time. He said, listen, if you ever go into business for yourself, and again, remember they’re not entrepreneurs. They don’t, you know, my dad drove a truck, right. Uh, he, he said to me, if you ever go into business for yourself, uh, food, shelter, or clothing, do something, shelter, clothing. And it was right. I’ve always been in shelter. And not that driving a truck was bad at all because it provided one hell of an income and does for people today too. So it’s just, it it’s backbreaking work like tying rebar.

Reed Goossens (11:11):

exactly backbreaking work. I love that food shelter, clothing. It’s , it’s a really good back basic piece of golden nugget that you’d probably, your dad didn’t think too much about it. But when you think about shelter, it’s like, yeah, like we just came through the pandemic. Everyone needs a sh a roof over their heads, right? Like people need housing, there’s housing across the globe. I don’t care wherever you are in this world, you can invest in real estate. And whether it be in Australia or Mexico or Alaska, or the United States or Antarctica, you need shelter. So that’s awesome stuff. Walk me into what you, we mentioned a little bit offline in the green room. You, you’ve got an incredible story about some harder times, and, and I’m gonna let you explain the story, but maybe give us the, the, the lead up to it. And, and what ended up, what, what happened to get you into that situation? Because I’m, I’m, I’m really interested for the listeners to hear it from your point of view and, and the lessons learned along the way. Cause I’m sure there’ll be

Mike Morawski (12:05):

A ton of them. Yeah. There’s a, there’s a bunch of lessons and there’s six, six prominent ones that, that I’ll talk about through this. But so, you know, I’ve been in the construction business and you know, it’s funny what you said. It can’t be an easy business in Chicago and it never, cause I would hire guys in the springtime train ’em and teach ’em fall. I’d have to put ’em on unemployment. So they’d go on unemployment. I’d think they’d come back in the next spring and they didn’t, they’d go find another job and then I’d have to find new guys, train them. And then the same cycle. Well, it was a, it was a nightmare because I wasn’t making any money and it cost me so much money in training. So what I decided to do was listen, I’m gonna start doing kitchen and bath remodeling in the fall and I’ll keep these guys busy all year round.

Mike Morawski (12:52):

So I wanna up doing kitchen and bath remodeling and um, building room additions and, you know, built a heck of a successful general contracting business. So I transitioned from swimming, pool installations and swimming pool service into the construction business. And I woke up one morning. I was married to my wife at the time, woke up one morning and I went, I can’t do this anymore. I’m burnt out. I was still banging nails. I was doing sales. I was doing bookkeeping. I was doing scheduling. Couldn’t work it didn’t. And I had somebody knocking on my door that wanted to buy the company. So I decided to sell my company and I took a year off. And during that year, we house hacked up couple houses. Now this is house hacking is long. This was long before it was the traditional thing. The cool thing, it, it wasn’t sexy back then.

Mike Morawski (13:44):

Matter of fact, I remember my wife yelling at me that she was stepping on nails and clean ’em up. Right? So along the way, I meet a real estate agent, very, very successful. And I go to him and I say, Hey, Todd, I think I’m, I wanna be in real estate. And he said, I think you’d be great at it. So he really kind of encouraged me to go into the business. And in going into the business, I said, could I come and shadow your team? Because read one philosophy I have is that success leaves clues. You know, it’s just like this podcast stuff, listen to what you and I talk about. There’s some success in here. People can pick these nuggets up and, and go and be successful or it helps cut the learning curve. Right? Right. So he says, no, but I’m gonna do one better.

Mike Morawski (14:29):

I’m gonna make you a cassette tape. Now I’m really dating myself cuz I don’t think you can find anything to make a cassette tape on anymore. Right? So he makes me this cassette tape and I listen to it over and over and over again. And I go in the business. My first nine months in the real estate sales business, I sell 78 houses. I’m Remax, rookie of the year, that year. And then I go on to build a team selling over 125 listings a year for about nine years. And um, I see in 2005, the market’s starting to shift and change and I know that something’s gonna be different. And so I say, well, I’m, I’ve always wanted to be in the apartment business because again, success leaves clues. Back when I was in the construction business, I did a lot of work for two major syndicators here in Chicago.

Mike Morawski (15:22):

I did a lot of apartment work. So I understood this Reed. I understood you raise private equity. You marry it with a great real estate deal. You stay in the middle. And as long as everything goes, well, everybody makes money and, and profits from it. Right? Well, I go out in 2005 and syndicate my first apartment deal. Uh, I RA I wind up going and raising 18 million by that’s impressive, 60 million worth of real estate, 4,000 apartments in five us markets. And I did that in 30 months. I also built a property management company managing 7,500 units. I scaled a company close to a hundred million dollars in value and we wound up, um, and, and I did that in 30 months. So Reed here’s the first lesson I grew way too fast. I was very unstable. I thought I had a team behind me that was stabilizing deals and getting the capital improvements done and working the business plan that I wrote.

Mike Morawski (16:27):

And they weren’t. So I was very unstable. So, uh, as we, uh, move along a little bit, 2008 comes around, boom, it’s like hitting a brick wall in a freight train, right. I start because of being unstable, I start to derail and come off the tracks and I have companies that read, I should have just let those deals go to or closure and let those investors get hurt, but that’s not who I am. Hey, my core value is that I’m a caretaker and I wanna make sure you’re okay and safe. And so what I did was I, I tried to craft the way that I could save all my investors. So I was under leverage or under capitalized. I hadn’t raised enough money, less than number two, less than number three. I took a provision out of my operating agreement that I could go back to my investors for a capital call.

Mike Morawski (17:26):

So I didn’t have that ability. So now here I am financial crisis worse the world’s ever seen there. I, and I think Reed, here’s what I think along the way, this, this is a recession it’s gonna last 17 or 18 months. There’s only a few months left 10 per 10 or 12% correction in the marketplace will be good. My accountant and my attorney say, Hey, it’s okay. Move money between companies. And when the market comes back, put the money back. I think, great. You know, I can do this I’ll weather. The storm for a few months. We’ll be okay. Well it was a seven or eight year correction with a 40% correction in the marketplace. No way to weather the storm. So I didn’t disclose to my investors that I was moving money and as a result of, of not disclosing to my investors. So another lesson be transparent. Um, I wound up being charged on wire fraud and mail fraud charges and sentenced to 10 years in federal prison. Wow.

Reed Goossens (18:30):

Wow. That’s incredible. That’s through, through just trying to weather a storm and, and, and do an company transfer and we, and it all boiled down to the fact you didn’t tell the investors, is that

Mike Morawski (18:44):

Right? Yeah. It really came down to, uh, NA to a nondisclosure issue. um, and yeah, it was, um, really a non nondisclosure issue, cause

Reed Goossens (18:56):

I’m sure you would’ve been able to, I maybe your PPM wasn’t that ironclad, but you know, the PPMS that I write today is obviously call for call for a call for office call for cash. You, you know, capital calls, but there’s also provisions for the GP. You to go out and acquire new loans, you know, however, whatever the deal needs right. To, to, to, to, to preserve investors capital. And I assume that besides obviously the transparency we’ll put that to one side again, but was the acquiring of the loan also the issue because you are using it from another, another property within the portfolio, you had, you didn’t go and actually get it, go out and get a secondary loan on the property.

Mike Morawski (19:33):

Well, the market had gotten so bad. You couldn’t go get money in. Right. Right. So, you know, at one point, listen, I bought 60 million worth of real estate. Here’s another mistake at 15% doubt. Mm-hmm , the banks were throwing money at us. Then all of a sudden everything locked up and you couldn’t get money anymore. Right. So, um, I, I had a deal where the bank came out and they actually reduced the principle amount on the deal and gave me a reduction in the loan where we restructured it. So, um, could have done more of that. But,

Reed Goossens (20:09):

But, but didn’t because you do, and then what was the ultimate unwinding, I guess is the right word. What, who, who, who caught you? Who, who caught your hand in the cookie jar?

Mike Morawski (20:20):

Well, the noise got so loud from the investors wanting capital. They were trying to make capital calls and pull their cash out. There was no liquidity. There was nothing that could be dumb. We were locked up. And then when we finally started to tell investors, Hey, we had to take profit from this company and put it in this company. So nobody would get hurt. They were mad, right? So we wound up doing a voluntary receivership. So we took all of our companies and gave them to a receiver so that the, in thinking that the receiver would mitigate the storm between us and the investor and it turned out to be a nightmare. We never should have done that. We should have continued to, to run the deals. Now here’s what I would say, Reid, five year as before I was indicted, what I did, would’ve been a slap on the hand, a $250,000, fine by the SE they would’ve told us to go back, straighten your business out.

Mike Morawski (21:18):

Don’t let it happen again. But today they indict you. They turn your business upside down. They strip you from everything, including your family and put you in prison. So it’s a big difference today used to, you know, there was that incident with Bernie Madoff years ago. Yep. And that changed all the white color crime. Right. So, you know what considered a crime today might not before Bernie Madoff had been a crime, it might have just been a slap on the hand. And there was a lot of that mm-hmm so there’s a disparity today in the, in the justice system around that stuff. So, you know, this a long way to kind of answer your question, but this is good. Um, but you know, what happened was I wound up turning all 38 of my companies over to a receiver so that they could mitigate the storm. That was in November of 2010. Well, we didn’t, weren’t indicted until may of 2011. So there was a period of time there that we didn’t even have the property anymore. We didn’t even own the property anymore. So, you

Reed Goossens (22:27):

Know, was it, so we, we, you say indictment, is that your investors doing, is it class action lawsuit? Like, no, no, no, no.

Mike Morawski (22:35):

The federal government, um, failed an indictment against us.

Reed Goossens (22:40):

Oh, got it. So, so someone had reported you to the S sec to get them get their wires up. And that has how they came breathing down your neck and, and ultimately determined that you, you got it. Interesting. Look, man. It’s, I’ve, you know, I’ve never, I have, I’ve been involved a little bit with the SCC, you know, from a, an outsider, third party point of view. Um, looking in it looks very, very, uh, scary um, so, but how was, obviously you went through you would’ve gone through a lot of emotion. Stress,

Mike Morawski (23:10):

Go ahead. Ask the question. How was prison? Yeah. How was prison? Everybody asks that question.

Reed Goossens (23:16):

Well, I’m not even talking about up, even leading up to the prison part like prison obviously will be Google get to that, but the stress going through the indictment, the losing the business, the receivership, the, the, the probably, you know, just, I’ve only met you a few times, but the internal person saying I’ve failed. Yeah. There would’ve been some pretty big demons there for, for, for a long period of time.

Mike Morawski (23:39):

Yeah, really. Um, so, you know, I said, I’m, I’m not the kind of guy to, to let people down. And I felt like I let everybody down. It was, it was hard for me to deal with. Right. I felt like a failure. I felt like I was insufficient. Like I like everything I did didn’t matter. And you know, it wasn’t long before that, that I remember sitting in church and saying hi to an investor that was sitting behind me and turning around my wife and I sitting there and, and the investor’s wife asking him who is that? And he said, oh, that’s the CEO of XYZ company. And me feeling, you know, so pride in ego have a play in this as well, too. Right. So, um, here’s what I tell people, seek good counsel and seek a lot of it. There’s a lot of good counsel. You can go get, you don’t have to pay for it, but seek good counsel. It’ll help you in the long run.

Speaker 4 (24:37):

For those of you who are interested in staying up to date with all the latest happenings in my business, or to learn more about passively investing directly into my multifamily value, add deals, then head over Reedgoossens.com And sign up for my monthly newsletter. By signing up, you’ll automatically be notified about my new up and coming investment opportunities. You’ll be able to stay up to date with all the latest real estate news here in the United States, and much, much more. So head over to Reedgoossens.com and sign up to date now back into the show.

Mike Morawski (25:12):

So here’s what happened, right? Yeah. And

Speaker 4 (25:14):

Then you talk about the personal stuff.

Mike Morawski (25:16):

So I’m in, I’m on vacation in 2010, August of 2010, my family and I are on our, on our annual vacation. And we come back and my partners says to me, Hey, here’s a couple business cards. You need to find yourself a criminal attorney. And I’m like a criminal attorney. I said, I knew we were in trouble. And I knew we were having some issues, but how did it get to this point? He goes, I can’t talk to you anymore. I’m like, you can’t talk to me anymore. What do you mean? And so, um, so I, I wind up, uh, getting a criminal attorney. We turn the companies over with a receiver over the next few months. Uh it’s, it’s very contentious. Uh, the office is bad. He’s bad, I’m bad. You know, we’re, we’re argu, I’m visiting with my, attorney’s telling me, Hey, listen, um, you need to, um, you need to go talk to the FBI.

Mike Morawski (26:10):

You need to, to go in and tell your story. I said, no. I said, you know, I’m not gonna do that. He he’d never do it. He’d take a, we’d take a bullet for each other. Well, that’s not what happened. Right? So he, uh, while I was on vacation, he went into the, um, the FBI, the, with the pro met with the prosecutor and crafted a story that would get him less time in prison and would keep our in-house legal counsel and our director of finance from being charged. So they crafted the story. I wound up getting a 10 year prison sentence for mail fraud, and wire fraud, and he served 30 months. Hmm. So, um, you know, and we are 50 50 partners, right? So I just tell that because watch the things going on around you be aware of things. So I’ll come back to that in a minute.

Mike Morawski (27:01):

But, uh, I get indicted in may of 2011. And I get in the car with my wife after being in court that day. And I said, listen, we are, you know, I’m gonna go to prison and I don’t know what we’re gonna do. I said, we have two choices. One is I can give you an envelope with some money in it, but you’re gonna burn through that and have to go get a job. Or, uh, I can build a business. Now we had both been in real estate. She knew the business. I went and built a property management business that kept her and the kids in the house. And she still runs that business today, by the way. And it’s done very well for her. So, um, I wind up going to prison thinking that my life is intact and everything’s gonna be fine. I built this business.

Mike Morawski (27:47):

I’m gonna go home. And re-engineer the business. We’ll build it to about $5 million and, and exit and you know, retire. And then I find out that that’s not gonna happen. Here’s what happened. I’m in prison about 17 days. And I always tell people, read. I said, I never or flew private. I didn’t have a boat. I didn’t buy a big house. I didn’t have fancy cars. I didn’t have, uh, take expensive vacations. I, I was home every night for dinner. I was the neighborhood baseball coach. The, the school chaperone for field trips loved my wife. She was my best friend. We had a great marriage. I, I get ripped from that to live in a 12 by 12 room with three men that I don’t know and have three green outfits, five pairs of underpants, wondering what the hell happened in my life. And so I’m in prison about 17 days.

Mike Morawski (28:39):

And I get the, um, the message from my wife that she’s gonna divorce me. Wow. Thinking that she wasn’t going to all the way to the door. And, um, and so it, uh, it wrecked me. It just really ruined me. So, uh, so I’m in prison about six weeks and I’m walking around every day, Reed going, what happened? How did I want up here? What, you know, and how am I gonna get through this? The joke was, let’s take his shoe laces, cuz we’re afraid he is gonna hurt himself. And um, I came uh, six weeks in and I walk into the gym one day and let me just quantify this. I was only window shopping. I wasn’t looking to buy anything in the, a gym. And I was 35 pounds overweight. I had gone from running marathons to being, to hating myself and wondering, you know what, what’s gonna happen.

Mike Morawski (29:39):

And so this guy walks up to me in the gym and he says, Hey, cut it out. He goes, don’t let these people beat you. This is probably the best advice I’ve ever gotten in my life. He said, all they wanna do is take everything from you. They can take your money, your real estate, your business destroy your family, but they can’t take who you are. They can’t what you’re made of. They can’t take what caused you to build those a hundred, that hundred million dollar company. Get it back. He said, come to the gym every day, start working out, start feeling better, losing weight. He and I said, okay, I’ll take you up on it. And he was right. I started going to the gym. I started working out. I started better. And before I knew it, I was losing weight. I felt healthy.

Mike Morawski (30:25):

Again. I went to college, I got a bachelor’s degree in theology, took four years to study. I, I, I wrote two books while I was gone. One’s called exit plan. You’re complete guide to multifamily investing and, and why you need an exit plan before you buy . I’d love to give a copy away at the end of the show to your listeners. I’d love that. I’d love that. Um, I wrote a book on property management. I wrote an ethics course. I taught real estate and ethics in, in prison for six years. How, how ironic a, a federal inmate teaching ethics? Right? Um, I was on an outreach program, went into the community. I told my story like 40 times to small business owners and local college students. And then I met a professor from the university of Minnesota and he and I co-authored a paper together that we had published in the business journal of ethics this year, uh, on, on a case study on my case, which gets taught today at the collegiate level, uh, for forensic accounting and accounting and sales and marketing classes. Mm. So, you know, I’m home today. Uh, re-engineered myself, I’m in the coaching and training space. I teach people how to invest in real estate. Invest in multifamily. I work with entrepreneurs, teaching them how to scale their business and live a balanced lifestyle.

Reed Goossens (31:45):

How did you serve the full 10 years?

Mike Morawski (31:47):

No, I served, uh, I served seven years. 10 months came home and served 10 months on home confinement. I came home the week. They closed the world down for the pandemic. Wow.

Reed Goossens (31:58):

How’s it been? How’s life been back on the outside, I guess you think? Yeah. It’s crazy to think that you’ve, you’re trying to-re you’ve reinvented yourself or have been working to reinvent yourself so quickly, given that you would’ve had such an incredible readjustment coming into, back into society. How, how was, how was that for you and, and, and put a pandemic on top of it? Yeah.

Mike Morawski (32:23):

Uh, it was tough, you know, uh, you know, one thing, one thing that was really hard, you know, you come home, you’ve got some PTSD just like, yeah, sure. Do. Coming home from the service, you know, I mean here, uh, you know, here’s a great example, right? You go to Walmart and, and you stand in Walmart and, and there’s people everywhere and you feel crowded and like people are watching you, there’s 45 choices of shampoo that you can choose from. And you revert back to the dollar 50 bottle of shampoo used to buy in prison because it’s convenient and you know what it is, but it takes a long time to adjust. It takes a long time to be able to go out and be in a crowd and be in, you know, I was gone a long time. Yeah. Today it’s different. And I have a lot of respect for the world today for relationships today, for people around me today. Did

Reed Goossens (33:15):

You get any help mentally coming out of prison? Yeah.

Mike Morawski (33:19):

Yeah. Uh, because I was in a, I, I, I, I was in an aftercare program because I had 10 months of home confinement. So I was in an aftercare program and I had this, uh, I had a woman who, uh, was like my, I wanna say, you know, like a therapist almost, but she was a case worker. And, um, she really helped me. I mean, when I, on that 10 months, boy, she just was insightful and, and, you know, helped me to laugh and help me to lighten up and adjust. And so, yeah, I did get, that was, that was the help I got. But listen in prison, nobody does anything for you. Anything you do, you have to do yourself. Hey, listen. Um, somebody’s got a clip there that, that they say on the clip and, and it’s always showing somebody like in the gym working out, or, but she says, nobody’s coming for you. Yes. Nobody’s coming to help. I think it’s Mel Robbins who says this,

Reed Goossens (34:12):

Right? I’ve I’ve heard it a couple of times. Yes. Yeah.

Mike Morawski (34:15):

Nobody’s coming for you. Nobody’s coming to help you. You’re gonna have to do this yourself. You need to show up, you need to be the one to show up. And that’s the same thing that kids said to me in the gym is, is, you know, I need to show up, right? I’m the one that’s gotta reach down, grab myself by the bootstraps, pull myself up and go make it happen. I had to tap into all those entrepreneurial skills. All of that past life was able to really pull things together and build businesses. And that’s what I’m back doing today. And trust me, it’s no easy journey, but mm.

Reed Goossens (34:51):

I could imagine know it’s not. Well, look, mate, I wanna thank you for, for being so vulnerable there. I, I,I, I also wanna probably ask is how’s the, how’s the home front, the kids and the relationship on that side of the, that probably would’ve taken a bit of a beating as well. Obviously you had a divorce, so how’s all that stuff going,

Mike Morawski (35:07):

Uh, kinda interesting. You know, my, my ex-wife and I are friends. That’s, she’s in a, she’s in a relationship with a guy that, you know, um, he seems okay. Um, I, you know, I don’t think he, and I would go out to networking events or thing together, but he seems okay. And my kids like him. And, but it’s kind of interesting because all the time I was in prison, I wanted to, I wanted that relationship back. I wanted my marriage back in, and then, uh, the closer I got to the door that started to shift and, you know, I just, a couple months ago, my ex-wife and I were riding in a golf cart together watching our daughter in a golf tournament. Hmm. And I, my kids are avid sports people, you know, sports kids. Uh, two of my kids play golf and baseball and, and basketball.

Mike Morawski (35:50):

And I got out of the golf cart read, and I said, man, I’m so glad I’m not married to, uh, to her. And, and I can be her friend and she can be my friend and, you know, we can walk away and that’s it. So that’s kind of cool. So I enjoy that. Um, my kids, I have, uh, I have five kids. I have the yeah. And two grandkids. So my old, old law school team. Right. Yeah. Right, exactly. Um, and, uh, I’m just, you know, I’m may, I’m wait waiting to meet a woman. That’s got another six or five and we can play baseball. So I’m just kidding. Trust me. Um, my, uh, my oldest daughter and I, we have a great relationship. I have a good relationship with her and a grandkids. And, um, so, so that’s nice, my young kids and I, you know, they’re so busy with school and sports and my son works and they’re hard to get ahold of hard to get with.

Mike Morawski (36:46):

Um, but we do the best that we can. And, and I get to go to a lot of sporting events and spend time with them there. So, but then I have two middle girls read. I haven’t talked to in eight years. Mm-hmm , um, their mom, I, their mom has polluted the well and really just doesn’t like me and has, you know, really set some framework for, for the girls, not to like me. And so it’s kind of sad. I keep hoping that at some point maybe they hear a podcast or, uh, run across me and, you know, uh, I, I, I write to them all the time. I, I, one of my daughters, I have her phone number. So I call her and text her. She never answers. But, um, you know, I, I reach out, I do the best I can and, and just, you know, they’re loved and someday that’ll change. I, I pray to God. So

Reed Goossens (37:38):

One, my, I look, I, it wasn’t that I was trying Tory, but it was just more trying to give the audience a full perspective of how damaging it can be on across not only business, but personal relationships, and then reentering the, the, the life pandemic, all that. It just, it’s a lot to handle, man. And, and I just, you know, congratulation for being able to pull yourself up. A lot of people would be weaker mentally than probably where you’re at today and, and may not have had the, the courage to go on, you know, or, or, or rebuild yourself or rebuild the business and write more books. So I, your, I think your resilience is fricking incredible, my friends. So, um, you know, kudos. That’s all I, that’s all I can say. And, and, and thank you for sharing your story with me.

Mike Morawski (38:21):

Can I tell one more quick story? Sure. Yeah, go ahead. We, we talk about lessons learned, right? And, um, so I want, I, I, I want people to pay attention to this and, and I specifically wanna address the male listeners. Mm-hmm um, because I believe as a man, as a husband, as a spouse, we don’t pay enough attention to our wives, to our spouses. So in 2008, I’m getting ready to close a real estate deal. I’m sitting in Cincinnati, I’m a thousand miles away from my office and entitled company. And I’m waiting for my office to wire, you know, half a million dollars and the money’s not coming and I can’t get my partner. And finally, I get my partner on the, on the phone, and this is long before anything blew up. Right. And he says, uh, he says, I don’t know how to tell you this.

Mike Morawski (39:11):

So what’s gonna go through your mind at that instant. Right. And he said, I can’t wire the money. I took money from the escrow account. I put it in a, in a business operating account. I thought I’d have the money back. I said, I, we had this conversation. When we started this business, we knew that you never did that. He goes, I know he goes, I, I thought I could have the money back. I said, okay, let me dry clothes, which means I signed all the P I said, I’ll have it funded by Tuesday. I told the title company and I went home and I raised the money over the weekend, uh, was able to give away a little bit of equity, bring some other investors in, uh, got the deal closed and, you know, just brought another tra of capital in. But that was on Wednesday.

Mike Morawski (39:55):

Now, read out a, I just want you to know, I never talked to my wife about business. She always worried way too much. I kept things from her. And, um, N not because I lied to her or hit anything, but because I didn’t want her to worry if something went bad. So I tell her once in a while, Hey, I met a new investor. We closed a deal. I raised some more money, you know, high level stuff, nothing else. So we’re on the, we’re on the phone. And, um, or we go out to dinner on Friday night that week with my partner and his wife, and on the way home, outta clear blue, nowhere, she says to me, I don’t trust him. Hmm. And, and, and I think I’m a good husband at this point. And I go, Hey, honey, don’t worry. I’ve got this under control.

Mike Morawski (40:38):

Mm-hmm I got your back. Nothing’s gonna happen to you, right? Our, our wives. They want no, their security that, that we take care of them. Well, what I should have done was I should have said, tell me more about that. What do you see that I’m missing? See, people around me were starting to see red flags and starting to see things go on the, and I wasn’t paying attention to cuz I had my blinders on, well, a week later, I’m out to lunch with my attorney. Um, and this is my, I had an in-house legal counsel and an out outside legal counsel. And this is my outside legal counsel. We’re coming out of the restaurant. And he puts his arm around me walking into the car in the parking lot. And he says, um, he says, let’s, he goes, I don’t like what’s going on.

Mike Morawski (41:21):

I don’t like what I’m seeing right now. I, I think you need to take a closer look at your partner and what’s going on now, Reed, I don’t blame him for anything. Cuz I broke the law. My was my nondisclosure issue. I’m the one that didn’t tell the investors, but I didn’t pay attention to the details. And I told both of these people, I said, ah, don’t worry about it. I got it. You know, I, you know, I’m watching out and, and in essence I wasn’t, I didn’t, I wasn’t watching out. I didn’t have a handle on any of it. So I want people to understand, first of all, listen to people around you pay attention to the red, to the details, light, loosen up your blinders a little bit. Cuz we, we tend to put our blinders on and not pay attention to the peripheral vision. And we need to really kinda loosen that up a little bit. And guys listen to your wife so many times they’re smarter than we are and pay attention. That’s why, that’s why you’re in that relationship. So, so I tell that story because I think that, you know, we just need to smarten up a little bit.

Reed Goossens (42:27):

It’s a very good, it’s a very good recap because I personally, also my, my wife is very more, more emotionally intelligent than I am. I’m gonna be 100%. I’ll put my head up and say that. And I think that is so true in such a good litmus test is meet the wife. Let, let my, let let, let my Mo my wife meet my new business partner and see how she says she’s had, I’ve had, you know, small partners in the past and she’s always had a little bit of a, I don’t know about that guy. And I’ve had some, some about her or her partners. Yeah. But it’s always good to, to bounce that off each other because they know you the best, right. They’re, they’re the one who lives with you. They’re the one who can see, as you said, your blind spot, because you probably are so, oh, enamored by the fact that, oh, wow, we’re gonna get this deal done and we’re gonna have a partnership and this is gonna be great.

Reed Goossens (43:15):

And we’re gonna skyrocket to the moon, but you ignore, as you said, the red flags or the, the warning signs that someone else is a third party, who really knows you can identify like at a drop of a hat. So no, that’s, that’s really good advice. And thank you for sharing. As we come to the end of the show, we do like to do the top five investing tips. Before we get into that. What do you got plan for now in the end of the year, mate, like an also not even there a year, you gotta plan for the next five years as you, as you slowly start to rebuild.

Mike Morawski (43:40):

Yeah. Great. So I have a coaching and training company and I love to give back. I love to help people. I tell my story. Um, anytime somebody wants me to, to come on their show or, or speak publicly in an event, I, I would love to share my, my story and give some hope and inspiration to people. That’s my, that’s my first, my first major goal. Um, I got approved by the S sec to go back and sponsor deals and be an issuer of securities. And so we’re actively sponsoring deals. Uh, I’m getting ready to close a 40 unit and have some more under contract, uh, with a couple of partners. They happen to be coaching clients of mine that I partnered with. So, you know, uh, at a coaching client decided to go to do a deal with him and we brought another partner on and I’ve done another deal with another coaching client.

Mike Morawski (44:30):

So I, I work with individual investors, teach ’em what to do and then go on and partner with them. So I do a real hands on kind of, you know, mentorship coaching program. So I want to grow that. I, I would like to continue to scale that business scale, my apartment investing business, and, uh, just recently, uh, started, uh, had another coaching client. That’s been bugging me to go in the property management business with them. So we, uh, decided to do that and are back in the property management business. Um, I have to say my first goal out of everything is to, to rebuild relationships with my children and that’s my, my major focus over everything else. Um, everything else in my life can wait, you know, so over the next five years, I’ll come out with a couple more books and continue to just, you know, build into people. So.

Reed Goossens (45:23):

Awesome. Awesome mate. Well, thank you very much for sharing and we’re gonna jump into the top five investing tips. You ready to get into it? Yeah, let’s, it’s a lot. It’s a lighting around it’s very short, sharp answers. Anything comes to your, your mind, just spit it out. So question number one is what is a daily habit you practice to keep on track towards your goals?

Mike Morawski (45:40):

Mm, three daily disciplines in the morning I get up and practice gratitude, prayer and exercise. Love it. That keeps me sharp.

Reed Goossens (45:48):

Love it. Question number two is who’s the most influential person in your Korea to date? I should say. Hmm.

Mike Morawski (45:55):

I would have to say that that, uh, uh, individual who encouraged me to go into the real estate sales business, there’s probably two people in my life that are very in, you know, um, in influential. And that was Todd who encouraged me to go into real estate sales business. And then my good friend, Forrest, who, um, continually helps me in the multi-family space, uh, to learn more and to grow more and to keep moving.

Reed Goossens (46:22):

Forward. Awesome. Awesome. In your business today, question number three is I should say, in the business today, what’s the most influential tool. And when I say tool, it could be a physical tool like a notepad or, or a phone, or it could be a piece of software that you can’t run the business without. What is it? Mm-hmm,

Mike Morawski (46:38):

two things. First, my phone, you know, I think this is the most incredible piece of, of technology hardware ever built. Um, and you know, we have, we have the keys to success into the world, in our, in the Palm of our hand today. And the other thing is my underwriting tool. What I use to evaluate deals and look at deals. Um, I teach a class on that and I, you know, give away my underwriting tool as part of that, that lesson and you know what, it keeps me out of trouble and it’s, so we’ve built over 20 years, so

Reed Goossens (47:11):

That’s awesome. That’s awesome. Uh, and one sentence, what has been the biggest failure in your career and what you learn from that failure? We, we spent the whole, probably podcast talking about it, but what could you summarize it into one sentence? Yeah,

Mike Morawski (47:23):

It was, um, not paying attention to the details around me, not listening to people around me. Yeah. And, um, thinking that I had the whole thing handled and I didn’t.

Reed Goossens (47:33):

No that’s right. And that’s, and that comes back to ego and all that stuff we spoke about earlier. So final question, big follow is where can people reach you to continue the conversation they wanna be in your sphere? Want to get a copy of the book? Where do they need to go? I

Mike Morawski (47:45):

Love this question. so, listen, first of all, I’m every where you hang out on social media. So either my core intentions or Mike Moroski, you’re gonna find me on Instagram, LinkedIn, Twitter, Facebook, anywhere tag me like me, love me, subscribe on YouTube. You’ll, you know, I’ve tons of content hours and hours of content for people. My website is mycoreintentions.com You can go download a copy of my book, exit plan@mycoreintentions.com slash exit plan. And I am extremely open to, uh, networking and connecting with people. Call me, reach out, you know, mike@mycoreintentions.com is my direct email address. And I look forward to talking to everybody.

Reed Goossens (48:32):

Awesome, mate. Well, look, I wanna thank you for coming on the show today and sharing your incredible story. And I just wanna reflect some of the things that I took away from today’s show to help the listeners, you know, from my perspective, summarize really what you’re trying to say. And I think first and foremost, thank you for being so, uh, open with, with your journey and, and the trials and tribulations you’ve been to, through that, the issues in and around your PPM, I think were some big ones there, you know, not having an ability to, uh, to, to have call for capital. I think that was the first one. Uh, there was obviously the disclosure, which is probably, you know, disclosures, always the most important thing, always dis disclosed for those people listening out there always disclosed. But then, you know, I about trying to go out and get a second, um, loan on the property, but also during the timing of, of what you were doing, it was very difficult, but just understanding, be disclosed, disclosed, disclose, be honest.

Reed Goossens (49:21):

And, and, and if you’re in trouble, don’t put your hand up and say that you’re in trouble. Um, and, and then obviously going through your, you know, the, the, the mental, her hurdles to get through, to, to get to prison in 10, seven years, you’re in prison and losing the family, losing the wife, losing probably other people around you and then coming back out. But I will say that the biggest thing I’ve taken away from you is your resilience. Cause you’ve come out in the midst of COVID and you’ve been able to rebuild quite fairly quickly. If you look back at how quickly you’ve come out, you’ve readjusted back to life. So well done. And, and again, the, the last, the lesson that you mentioned earlier, paying attention to those details is so, so important. So again, thanks again. But did I leave anything out? No, I

Mike Morawski (50:03):

Think you got it all re great handle. Awesome brother. You’re

Reed Goossens (50:06):

A great listener. Awesome, man. Well, look again, thank you so much for jumping on the show today. Enjoy the rest of your week and we’ll catch up very soon. Thanks my friend. Well, there, you have another cracking episode jampacked with some incredible advice from Mike, you know, goosebumps stuff like definitely go back and re-listen to this episode, it’s jampacked with some incredible advice and tips from someone who’s been to the bottom of the barrel and come back again and now will pull himself up from his own bootstraps. Um, remember to head over to mycoreintentions.com/exit plan. If you want to get a copy of his book, I highly recommend it. It would be something jampacked with some incredible advice and just get involved with what Mike is doing on his website, because he does have so much to offer. Uh, again, I wanna thank you all for taking some time, add day to tune in, to continue to grow your financial IQ. Hopefully this episode out of all the episodes has been really influential. And if it has been, please give the show five star review on iTunes. And if you wanna do it all again next week, so remember be bold, be brave, and go give life a crack.