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Show Summary
In this episode of the Real Estate Pros podcast, host Michelle Kesil welcomes Denis Shapiro from SIH Capital Group, who specializes in commercial real estate and multifamily investments. Denis shares insights into his journey, starting from his initial investments as a limited partner in 2012 to launching his own company during the COVID-19 pandemic. He discusses the dual focus of his business on affordable housing and boutique hospitality, highlighting the unique challenges and opportunities in each sector. Denis emphasizes the importance of building a strong team and adapting to market changes, particularly in the emotional landscape of hospitality transactions.
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Denis shapiro (00:00)
So there’s a few different things that we’ve learned. The first thing is ethics and knowing who you invest with really matter. We’re a big believer. actually are a moniker for our company is relationship driven investments. We’ve invested in three different Ponzi schemes and it happens if you’re going to invest, there’s going to be times where those investments don’t pan out the way that they’re supposed to. That’s primarily the reason why we started operating. So from an investor perspective,really know who you’re investing with. That’s like number one.
Michelle Kesil (02:02)
Hey, everybody. Welcome to the Real Estate Pros podcast. I’m your host, Michelle Kesil. Today I’m joined by someone I’m looking forward to chatting with, Denis Shapiro of SIH Capital Group, focusing on commercial real estate and multifamily. So excited to have you here today, Denis.Denis shapiro (02:06)
Thank you.So thank you so much for having me.
Michelle Kesil (02:23)
Yes, absolutely. I think our listeners are really going to take something away from how you’ve been approaching investing and creating a business off of your investments and hospitality. So let’s dive in. First off, for those not familiar with you and your work, can you share what your main focus is?Denis shapiro (02:45)
⁓ Sure, so our main focus is we do affordable housing multifamily and then we have a hospitality company that focuses on boutique motels. So we have two different business divisions in the company.Michelle Kesil (02:56)
Awesome. And how did you get started creating this company?Denis shapiro (03:01)
So we first started in 2012 just as an investor. I started investing as a limited partner in a few different projects. We kind of saw that we would do things kind of differently. At that time I was still working at W2 with the government. I ended up in 2018 doing a batch of investments that led to basically where we had enough data to really see what was working, what wasn’t working.And then during COVID, I started making the transition. and then shortly after COVID, we launched S.I.H Capital Group, where we started purchasing properties just to hold, operate, and hold for the long term.
Michelle Kesil (03:41)
Awesome. What are some of the main keys that you feel made the biggest difference in allowing your business to be able to grow and to run smoothly?Denis shapiro (03:49)
So initially, the big difference is definitely the team you put together. ⁓ Initially, it was just me and my partner. And then we started getting into different pain points. For example, you know out of 40 activities, we probably each enjoyed doing five to 10. And then we realized we were also much more excited to do the acquisition side versus the operation side. So we started building around ourwhat we actually enjoy doing. So a few years later now we have a management company that’s run by a specific person. We have a maintenance executive who runs basically the main side of the thing. So basically we’ve taken in last five years, every time a major pain point has come up, instead of us trying to go through it, we just realized it’s more of a who, not how situation and we brought on a person and then.
that allows the rest of the team to just really grow because they’re doing what they’re uniquely good at.
Michelle Kesil (05:37)
Yeah, absolutely, that’s important. So can you expand on kind of the asset classes that you’re focused on? I know you mentioned like multifamily and hospitality, but yeah, I would love for you to expand on what you’re doing in those areas.Denis shapiro (05:53)
Yeah, sure. So I’ll with hospitality. That’s actually like the more of the sexier asset than affordable housing. We live on the New Jersey shore. So we have a lot of prime real estate located 20, 30 minutes away from us. So we go into some of these beach towns where the motel has been there for 50 years. Very outdated. Still has like that green shaggy carpet type of feel when you walk in. We go in there, we spend a lot of money.and making it into an experience that our families would want to go visit. But you can’t replicate the fact that the properties are located on the beach or in a resort town. We find that there’s a lot of opportunities there because it fits a certain niche where there’s a whole world of Airbnb hosts, which really nothing stops someone from getting started in that field. they need to do is buy a single family home versus actually an operational company like
a motel where you need to really manage the cleaning companies and the mains companies, have people on site, more of a concierge thing. So we’ve learned that the fact that there’s, it’s like a sweet spot where it’s too big for the small guys, but it’s also too small for your health ins and your bigger, bigger hotel operators. So we find that there’s this really big space of, let’s say motels worth more than a million dollars to a
Well, our biggest deal right now is an eight and a half million dollar deal. So we find that we’re not competing against 50, 60 different buyers. So we really like that space. We think there’s a lot of opportunities in that space. The other one is affordable housing multifamily. This is your cookie cutter, bread and butter coming in there. You’re buying a 50 unit, a hundred unit apartment building. You’re improving it. Your rents usually are capped because it’s affordable housing, but you’re buying at a great basis because some of these, some of these buildings
cost $8 million to build and you could purchase them for $3-4 million because of the income restrictions that are going to be in place for a certain amount of years after you buy it. So it’s two very different business models, two very different teams running each, but we do, sometimes you’ll see the synergy cross over. Most of the time it doesn’t because they’re so different, ⁓ but they are different from the regular multifamily and hospitality is different from there.
short-term rental space. So we like the differences and we think that’s where the real money is at.
Michelle Kesil (08:22)
Yeah, absolutely. And what are some of like the main things that you have learned since starting and investing and yeah, kind of being like spread across all these different strategies?Denis shapiro (08:39)
So there’s a few different things that we’ve learned. The first thing is ethics and knowing who you invest with really matter. We’re a big believer. actually are a moniker for our company is relationship driven investments. We’ve invested in three different Ponzi schemes and it happens if you’re going to invest, there’s going to be times where those investments don’t pan out the way that they’re supposed to. That’s primarily the reason why we started operating. So from an investor perspective,really know who you’re investing with. That’s like number one.
And number two then is from an operator’s perspective, know when to pivot and know pivot quickly. So what we’ve done, like for example, in our hospitality company, we decided to launch a wholesale business because we were coming across, we wanted to do a lot more direct lead campaign. So we had a realtor as part of our team. We had the whole team out there. We did.
the virtual system, did everything. But our time focus between operating a hotel on one side and going and trying to follow up on these leads, which needed very, very frequent, consistent and time follow ups, we just didn’t have the capabilities on it. So we’ve got a lot of great tools, systems from the wholesale side of the business. We even met a lot of great potential sellers. We actually met a couple of different
investors from that project, but that project financially was not really successful. We didn’t really even close on any deals on the wholesale front. But we did that for six months. We pivoted, we got what we needed out of it, and then we applied it to the hospitality stuff and we closed it down pretty quick so we could focus all our attention on that side of the business.
Michelle Kesil (10:22)
Awesome. So is hospitality the main focus of your business now?Denis shapiro (10:27)
So I’m the commonality in my company between the two different divisions. I kind of run both of them. They’re kind of equal. Hospitality, we have about the same amount of assets on the management on their both. We have a lot more units on the affordable housing side, but that’s just also because the hospitality tends to be in more premier locations. So the cost per door is a lot more expensive.So for example, we have a nine beach bungalow community that’s the price of 105 units in Virginia. So it’s very, very different, very, very different. So it’s not that one is more of our focus than not, it’s one is a focus of that’s the hospitality team and the other one is just a focus on the Florida. They kind of, they don’t really coincide and they kind of have their own, they have their own five year goals, a five year everything.
Michelle Kesil (11:16)
Yeah, what has been the biggest challenge in getting into the hospitality space?Denis shapiro (11:23)
The hospitality space is just because there is such an emotional component to every single transaction, ⁓ every single deal that we’ve done. So there was one deal that actually didn’t go through ⁓ where the sellers, you know, they’ve owned this thing for 50 years and they’re so emotionally intertwined with the property that when they sold it, they would literally be given up an extension of themselves. So in the hospitality space, it’s different than the affordable housing space.you’re dealing with very professional sellers versus in the hospitality space, you’re dealing with emotional sellers and it’s a completely different conversation.
Denis shapiro (12:02)
hospitality dealthe traditional affordable housing side.
Michelle Kesil (12:44)
Yeah, that makes sense that people are more connected to that.Denis shapiro (12:47)
atMichelle Kesil (12:50)
So what are you most focused on solving or scaling to next in your business?Denis shapiro (12:58)
So that’s a great question. ⁓ think the main thing is making sure I stay in the higher level type of decision making. So recently, ⁓ in the last two months, I’ve really tried to get out of more of the week to week calls that I usually get on for every single property. It was needed at one point, but now it’s kind of like the team’s in place, they’re trusted, they need to be able to succeed without me.kind of mentality and that’s been the most exciting but the most nerve wracking because you are no longer able to have 100 % visibility in every single aspect of your company. And originally that was one of my focuses when we only had four or five properties, it wasn’t a big deal to get on four or five weekly calls. But now we’re at the point where we have 12, 13 properties. It is a very different story of trying to get on to 12, 13.
weekly calls and when you already have equity partners in those roles taking those calls already. So that’s been my main challenge at that point is making sure that the team is capable of still operating at a very high level without me, which is interesting.
Michelle Kesil (14:19)
Yeah, definitely. And as you gather more of those team members, what do you want your role to look like?Denis shapiro (14:28)
Definitely more of the visionary and strategy. And I’ve also, you kind of end up being almost the emotional therapist for the team. Because people, know, no matter if it’s the mains lead or the management lead or the financial lead, someone’s always going to have some kind of gripe about something. Because if mains is doing their job and they’re officially turning over units, then finance is probably unhappy because we’re spending a lot of money to do so.And then, you know, it creates these these kind of inner conflicts. So I think my superpower has been always managing those little conflicts to make sure that they’re very minor and they get resolved very, very quickly. So that’s that’s kind of been my role is is really focused on the inner inner politics of the company to let my superstars do what they can do at full speed without getting too much bureaucracy in between them.
Michelle Kesil (16:10)
Yeah, definitely. That’s an important role to hold. Are you looking to continue scaling as far as investments go as well?Denis shapiro (16:21)
Yeah, so we’ve grown from, you know, a team of two to now like a team of six or seven. And every time we bring on a partner, I feel like it unlocks, you know, another four or five properties easily. And if you put in, if you start allocating the right people in the right roles, that act, that number actually doubles and triples because it’s a lighter turn for every single person. So for example, we purchased 45 units in September of last year.in 2025 and we had that thing completely up and running, turned over in 90 days versus when we first started in 2022, it would have took us a year to do that. So now we’re becoming a lot more efficient at acquiring, putting it right into a business plan that we are very, very like laser dialed at this point. So we can actually do more properties at a sooner, soon apart. At the same time, I actually closely follow the metrics.
So if I see like the KPI start dropping off, like for us for multifamily, it’s really about occupancy, delinquency, ⁓ and ticket orders. Those are the three that we follow the most because if the ticket orders are down, are happy, the occupancy usually stays higher. ⁓ And then they usually pay their rent sooner. I mean, they usually pay their rent on time when problems would be addressed quickly.
So we kind of have these three KPIs that we focus on. Right now our average occupancy across the board is 98%. If that number starts falling into the low 90s, that’s when we’re probably gonna hold off on acquisitions. So we’re very data driven. We wanna expand, we wanna scale. At the same time, we do see a lot of great opportunities right now for the first time in two, three years. It’s always been a huge struggle to get a good deal. Now I feel like those good deals are coming to us.
a lot more readily available and we would like to take advantage of that. But at the same time, when we were on the investor side, we seen operators scale too quickly, buy too many properties, not focused on operations and those results did not end well. and since we’re the largest investors in our projects, we want to make sure that ours obviously do exceedingly well. So that’s why we’re, so the short answer is like, yes, however, it’s going to consistently depend on how those
depends on those three key metrics. If they stay in line, then we’re going to keep growing. If they start falling back, we’re going to slow down.
Michelle Kesil (18:57)
Yeah, definitely. And when you say your investors, do you like partner with investors or what does that collaboration look like?Denis shapiro (19:05)
Yeah, so we do syndicate a lot of our properties. So that is just a very traditional LPGP kind of arrangement. They have to sign up PPM. At this point, we have a lot of repeat investors. So knock on wood, we’ve done really well up to this point. So we would get 40, 50 % of our new deals get filled up by our existing investors pretty quickly. So we are very, very fortunate with that. And yeah, we treat ourA lot of our investors, our family, our friends, people in our network that almost have become family and friends because we speak to them so often. So it is definitely a combination. yes, we do because our deals tend to be on the larger side. We do do a lot of this traditional certifications. We’ve done smaller deals with joint ventures, but as we’ve grown in size, they’re less, less often and it’s more and more.
common to just do the syndication model.
Michelle Kesil (20:09)
Yeah, that makes sense. What has been like the biggest learning curve for you as you’ve created this and scaled?Denis shapiro (20:17)
The biggest learning curve is that you really want people to be very laser focused on certain aspects and those might not be the aspects that you originally maybe thought of that person. But if you bring usually eight players to the table, you can adjust those roles for the benefit of the team as long as they’re willing to do that. And things work really, really well. We have had issues within our team.where someone wasn’t the right fit for that role and they had to be, they had to switch. And it’s a tough, because you’re dealing with partners and we don’t really have a lot of salary employees, it’s a very tough conversation to have. It’s not like, because you’re not technically their boss, you are their partner. And when you tell them like, hey, you know, yes, you can do, let’s say asset management, but we really need you in like compliance and finances.
and looking over here and not doing this. We don’t need you questioning every bill. We need you really to keep high level reporting and making sure we’re not over budget. So those kinds of conversations you’re going to have with an expanding team. But those are definitely the ones that I feel like are the best conversations because after that you get so much momentum going because then you get that readjustment of the role when you get that buy in.
And it’s all, it’s a race is at that point.
Michelle Kesil (21:43)
Yeah, absolutely. And when you find new deals, that like through, is there a specific lead generation strategy that you have for that?Denis shapiro (21:53)
Yeah, so this is where I would say we, even though we had those like failed wholesale business, we did get a lot out of it. And we got the ability to cold call the ability to actually really get more direct, ⁓ more direct leads, but more focused on the commercial real estate and not small residential wholesale deals. So we applied a lot of that and we ended up in one of our states, Ohio, wherewe ended up purchasing four or five properties directly with the seller. And it’s great to have that playbook that you kind of create through the wholesale world. And you can apply that to commercial real estate. A lot of people don’t think it’s transferable. It’s very, very transferable. So we did. We did learn a lot from the wholesaling side that we were able to put into place. And it grew our portfolio by 2X by doing that.
Michelle Kesil (22:49)
Yeah, that’s amazing. Thank you for sharing that. So before we wrap up here, if somebody wants to reach out, connect, learn more, where can people find you and connect with you?Denis shapiro (23:01)
Yeah, our website is sihcapitalgroup.com. ⁓ That’s the best point. You hit learn more, contact us. My email address is [email protected]. ⁓ Even though I’m considered the CEO of my company, ⁓ I still deal with the investors. There’s no investor relations person. So just feel free to reach out. It’s denis with one N, D-E-N-I-S at sihcapitalgroup.com. Follow along. Also connect with me on LinkedIn.We don’t do a lot of posts, when we do post, we try to post something that’s meaningful for us. So feel free to reach out on LinkedIn. And then I did write a book about investing in syndications and alternative assets, and that you can find on Amazon. The book’s title is The Alternative Investment Almanac by Denis Shapiro. So all those different ways you could reach me. I love talking to new investors, experienced investors, and the whole nine.
Michelle Kesil (23:56)
Perfect, well, appreciate your time, your story, and your perspective. Thank you for being here.Denis shapiro (24:02)
Michelle, thank you so much for having me.Michelle Kesil (24:05)
Of course, and for the listeners tuning in, if you got value, make sure that you’ve subscribed. We’ve got more conversations with operators like Denis who are building real businesses, and we’ll see you on the next episode.
