Episode 74: Slow and Steady Wins the Race: An Approach to Low-Risk, High-Return Real Estate with Denis Shapiro

Are you tired of the hands-on hassle of managing single-family rentals or small multifamily properties? Frustrated by the challenges of finding the right partners and scaling your real estate business? In this episode of Grab the Map podcast, we invited Denis Shapiro, Managing partner of SIH Capital Group, a real estate investor and author with a unique and inspiring story. Shapiro's journey from single-family rentals to large-scale commercial deals in affordable housing and hospitality makes him especially qualified to share insights on building a successful, passive real estate portfolio. From navigating the challenges of managing properties yourself to the art of cultivating strategic partnerships, this episode is packed with actionable tips to help you take your real estate business to new heights. Are you ready to unlock the secrets to scaling your real estate portfolio through passive investments? Dive into this conversation with Denis Shapiro and discover how you can achieve your goals while freeing up your time and energy. [01:12] Denis Shapiro discusses his book "The Alternative Investment Almanac" which covers his experiences investing in a variety of asset classes, with a focus on commercial real estate. [02:28] Denis started with single-family rentals but quickly realized he didn't want to manage them himself. He then transitioned into more passive, alternative investments before becoming more actively involved in real estate syndications and joint ventures. This pivot allowed him to leverage the expertise of larger teams and focus on his strengths. [04:52] Denis explains how larger multifamily and hospitality deals allow him to leverage the skills of a larger team, rather than trying to manage everything himself in a smaller portfolio. He emphasizes the importance of delegating tasks that don't align with his strengths, such as branding and marketing for his hospitality properties. [06:24] Denis emphasizes the importance of taking the time to vet potential partners, building genuine relationships, and going through a "dating" period before committing to a formal partnership. [09:02] Denis' affordable housing investment strategy: He focuses on 50+ unit properties in the Northeast, targeting the second 15-year compliance period to take advantage of built-in appreciation. Denis explains how the affordable housing model, with its tax credits and subsidies, can provide a path to owning a free-market apartment building at a discounted price. [11:12] Denis' approach to risk and returns: He prefers a slower, steadier approach with 10-year holds and fixed-rate financing, rather than chasing aggressive returns. Denis contrasts his strategy with the higher-risk, variable-loan deals that promise outsized returns but can be vulnerable to rising interest rates and economic downturns. [17:36] Building a valuable network: Denis shares tips for using LinkedIn, attending local meetups, and cultivating quarterly check-in calls to develop meaningful relationships in the industry. He emphasizes the importance of taking the time to truly understand someone's skills and character before considering a partnership. [22:26] Prioritizing health and work-life balance: Shapiro discusses the importance of making his personal health and family a top priority, even as his business has grown. He shares how he has restructured his schedule to ensure he can maintain a healthy lifestyle and be present for his loved ones. Here are actionable takeaways from this episode: · Evaluate your current real estate investment strategy - Are you stuck managing too many hands-on properties? Consider transitioning to larger, more scalable deals that allow you to leverage the expertise of a team. · Prioritize building genuine relationships before pursuing partnerships - Take the time to vet potential partners, test their trustworthiness, and ensure you're aligned on values and long-term goals before committing to a joint venture. · Explore the affordable housing investment model - Shapiro's strategy of targeting properties in the second compliance period can provide built-in appreciation and a path to owning free-market apartment buildings at a discount. · Invest in your health and work-life balance - Follow Shapiro's example and make your personal wellbeing a top priority, even as your real estate business grows. Restructure your schedule to ensure you can maintain a healthy lifestyle. Quotes: • "If you have a good relationship with someone who is ethical, hardworking, doesn't put a lot of leverage on the deal, the returns will follow." • "Commercial real estate can be incredibly forgiving, as long as you can hold on to that property." • "The larger deals allow us to leverage the skill sets of a larger team versus everything on me." • "Usually we're very careful about adding partners, because partners can 10x your business, and then they could bring down your business pretty quickly." • "If you're blinded by like, heavy numbers and quick, hey, this is going to 2x in five years, you're probably not the right investor for us." • "If you connect with anybody on LinkedIn, please don't use a generic message that a virtual assistant would say, like, I've been super disappointed sometimes, where I would connect with someone and they respond by a asking me if I'm in real estate, like question mark, which is, like, extremely frustrating." Links Mentioned: · Denis Shapiro's website: SIH Capital Group · Denis Shapiro's email: denis@sihcapitalgroup.com · Denis Shapiro's book: The Alternative Investment Almanac If you are interested investing in real estate and make connections, shoot an email grabthemap@gmail.com. Read on some of our blogpost https://grabthemap.com/.