Syndications have long been a go-to strategy for seasoned investors, but they’re becoming attractive for newcomers looking to maximize their money. On this episode of Zen and the Art of Real Estate Investing, Jonathan interviews Sam Morris, CEO of Sunset Capital, a Houston-based firm specializing in real estate investment and asset management. With over two decades of experience in real estate and nearly as much in corporate banking, Sam shares his insights on navigating syndications, making smart investment decisions, and building long-term wealth through strategic real estate deals.
Jonathan and Sam dive into the cyclical nature of real estate and why resilience is key to long-term success. Sam reflects on navigating the 2008-09 financial crisis and how his background in corporate banking led him to real estate investing. He shares what drew him to syndications, the critical role of risk mitigation, and the often-overlooked dangers of underinsured properties. They explore rising insurance costs, the value of transparency with investors, and why Sam focuses on just two asset classes. He also highlights the growing appeal of self-storage, the importance of understanding exit strategies before purchasing an asset, and how vertical integration can strengthen syndications.
Sam elaborates more on the following:
- Multifamily properties have more operational challenges than self-storage because they have tenants but can provide higher upside potential. Self-storage can offer a more stable cash flow.
- Real estate goes through cycles, and the battle scars investors carry from those cycles are valuable. Downturns in the market teach investors lessons in pivoting and operating effectively, even in challenging markets.
- Vertical integrations can offer operational efficiencies, control costs, and offer transparency to the investors.
- Education is critical before deciding to invest in a syndication. Find an operator with a proven track record, transparent communication, and a clear strategy.
If you’ve ever considered syndications, don’t miss Sam Morris’s tips on finding a trustworthy operator.
If you want to learn more about Zen and the Art of Real Estate Investing Podcast, check out https://zenandtheartofrealestateinvesting.com/podcast/214/.