Have you ever considered investing in multifamily properties but worried about the risks? You’re not alone. Multifamily real estate presents incredible opportunities, but without the right approach, investors can face significant financial setbacks.

At Capitano Investing Group, we entered the multifamily market as General Partners (GPs) in 2021 and 2022, a time when the sector was thriving. However, as interest rates increased by approximately 5% over just 14 months, many properties with variable-rate debt faced severe financial challenges. Lenders tightened requirements, property taxes and insurance costs skyrocketed, and an oversupply of new apartment units drove down rental rates. Unfortunately, some of the properties we invested in during this period have struggled, leading to a loss of investor capital as well as my own personal capital.

These hard lessons reinforced the importance of market timing and reliable cash flow in investment decisions. As a result, Capitano Investing Group has pivoted toward sectors with stronger fundamentals in today’s economic climate—such as oil and gas, pre-IPO companies, private credit funds (being the bank), and real estate investments with better risk mitigation strategies. This shift allows us to provide our investors with more stable returns and protect their wealth more effectively.

With that in mind, here are the top 10 lessons we’ve learned to help investors avoid losing money in multifamily syndications.

1. Protect Investor Capital Above All Else

The #1 rule in multifamily investing is capital preservation. Before investing, analyze the deal’s risk factors, underwriting assumptions, and business plan. If a deal carries a high likelihood of losing investor money, walk away. As a GP, I prioritize avoiding deals with fatal flaws that could put investor capital at risk.

2. Understand That Capital Raising is Hard

Many investors underestimate how challenging it is to raise capital. Without adequate capital upfront, deals struggle from the start. Insufficient capital can lead to cash flow problems, delayed renovations, and difficulty covering unexpected expenses. Raising money isn’t just about numbers—it’s about building trust and relationships.

3. Budget for More Contingency Funds Than You Think

Most sponsors underestimate how much contingency capital is needed. Unforeseen expenses—such as higher-than-expected renovations, slow evictions, rising insurance costs, or economic downturns—can quickly erode profits. I’ve learned to ask tougher questions to ensure the investment has enough buffer capital.

4. Partner With an Established GP Team

Success in multifamily syndications depends on having a strong, experienced team. Deals often struggle when a single person is doing too much. I prefer working with teams that have been in business together for several years and have successfully navigated past challenges.

5. Prioritize Fixed Interest Rate Loans When Possible

One of the biggest pitfalls in multifamily investing is interest rate risk. Fixed-rate loans provide more stability, making it easier to plan for long-term cash flow and sustainability. The recent interest rate surge was a harsh reminder of how unpredictable financial markets can be.

6. If Using a Variable Rate Loan, Have a Strong Risk Mitigation Plan

Variable interest rate loans should only be used when absolutely necessary. If a variable rate loan is required, secure at least a three-year fixed-rate period and purchase a rate cap insurance policy to limit exposure to sudden rate increases.

7. Ensure the GP Team and Asset Manager Have a Strong Local Presence

A GP team with local market knowledge is crucial for successful asset management. Ideally, at least one GP or asset manager should live within a two-hour drive of the property to provide hands-on oversight and ensure smooth operations. A strong local presence also means better relationships with vendors, property managers, and local officials, all of which help improve property performance.

8. Understand Local Market Conditions and Eviction Laws

One of the biggest lessons we’ve learned is that some markets make it extremely difficult to evict non-paying tenants. In certain properties we’ve invested in, we’ve seen tenants remain for over a year without paying rent due to restrictive eviction laws. Before investing in a new market, make sure to understand:

• Eviction timelines and tenant protections
• Rent control laws
• Job and population growth trends
• Supply and demand of rental units

Markets with landlord-friendly laws, strong employment growth, and steady rent appreciation create a more stable investment environment.

9. Don’t Underwrite a Deal Based on a Future Refinance

Many deals look great on paper when a refinance is included in the underwriting. However, market conditions can change, and relying on a refinance event to generate returns is risky. I prefer underwriting that assumes the worst-case scenario and treats refinancing as an upside rather than a necessity.

10. Get Involved Early in the Deal

The earlier I get involved in a deal, the more influence I have over key decisions—like selecting the right loan structure, ensuring proper contingency funding, and overseeing due diligence. Being proactive allows me to mitigate risks before they become major issues.

Final Thoughts

Investing in multifamily real estate can be one of the most powerful ways to build long-term wealth, but it’s not without risks. By following these 10 key principles, you can avoid costly mistakes and position yourself for success.

At Capitano Investing Group, we help military veterans and engineers invest in private equity assets, including oil and gas, pre-IPO companies, private credit funds (being the bank), and real estate. If you’re interested in learning more about multifamily syndications and how to protect your investments, join our investor club today!

Join the Capitano Investor Club: https://capitanoinvestinggroup.com/

Together, let’s Captain Your Wealth!

The post Top 10 Ways Not To Lose Money When Investing in Multifamily Syndications appeared first on Capitano Investing Group.

If you’re like most Americans, the financial advice you have probably heard is to save a bunch of money and put it in the stock market, then start drawing it when you retire. For me I think it is a little risky, particularly if you retire one year and then the market drops 20 – 30% the next year. It is going to be really hard to recover that money over your retirement years. So, how do you avoid that? And where do you invest instead?

I recently had the opportunity to be a guest on the Daily Real Estate Syndication Show with host Whitney Sewell, founder of Life Bridge Capital. The show was created to help active investors learn how the syndication business works and help passive investors understand where to invest when wanting to diversify into real estate. In the Podcast we talk specifically about creating multiple streams of income and how real estate investments, specifically multifamily real estate, can help hedge against market volatility and produce multiple steady streams of income to serve you in your retirement years.

I invite you to watch the podcast and learn smart ways you can passively invest your hard earned dollars.

Marshall Sykes
Co-Founder, Managing Partner
Capitano Investing Group

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My father retired from the Army when I was a young lad. Since he was a self-starter, he chose to learn the construction trade and work for himself building houses as his second career. Through this my parents were able to build up a small portfolio of rental houses that they received passive income from.

As a teenager, I worked for my parents on their construction projects along with my seven siblings. It was hard work that I didn’t always appreciate or enjoy and the days were long given the hot, humid North Carolina Summers.

I performed a variety of builder activities including digging and pouring foundations, mixing mortar for block walls, framing, and installing insulation, sheetrock, and roofing. My teenage construction apprentice years culminated in helping my parents build a 4-plex multifamily property which my mom still owns and receives passive income from today. My parents’ real estate ventures got me thinking of passive income at a very early age. However, I had other career thoughts and certainly was not interested in going into construction nor in joining the military.

After I completed my Materials Engineering degree at N.C. State University, I had a very hard time finding a job in my chosen field. After exhausting other avenues of employment, I joined the US Navy Civil Engineer Corps where I planned to only serve for 4 years – enough time gain some work experience. In the Navy I was a construction project manager where I built and maintained facilities for military bases. Much to my surprise, I quickly found out that not only did I love military life but that I also loved working as a construction manager!!! Two things that I thought that I would never do actually formed the foundation of my 30+ career and provided good insight into real estate investing.

Even though I had helped my parents build a multifamily property as a teenager, the value of having one property produce multiple streams of income didn’t fully click with me until I was in charge of a massive $5 Billion construction buildup at Marine Corps Base Camp Pendleton in Southern California.

$2 Billion of the portfolio was for 8000+ new apartment units of barracks infrastructure. Barracks are essentially multifamily properties but each apartment unit is smaller, somewhat like an efficiency apartment without a kitchen. The amenities and how barracks are operated are quite similar to apartment complexes.

With $2 Billion of incoming capital for these barracks, my 2-Star General charged me with making major improvements to their design and functionality. We set out to build them with the right criteria and to make them feel like home to the Marines and Sailors who would live in them. To accomplish this, I led a design and operational team in strategically planning and developing the gold standard “Best of Breed” barracks. We made major improvements to the living quarters and recreational amenities as well as improved the community feel.

Overseeing the planning and construction of these barracks and developing a strong community where people enjoyed living helped shape my passion and interest in multifamily properties. It also gave me thought to buying apartments for my budding real estate portfolio. However, the timing wasn’t right as I wasn’t familiar enough with commercial real estate acquisitions and I didn’t have a mentor to walk me through it. I also thought that individuals couldn’t buy multifamily properties themselves, that only large corporations could do so. I left it as a passing thought as I still had a young family who I valued spending my free time with, and I also had a few years to go in my very demanding Naval career.

After 24 years of service, I retired as a Navy Captain and then began working in project management on very large and complex international projects for ExxonMobil. In 2015, my family and I were moved to Dubai on an overseas expat assignment. During our time there, I started evaluating our long-term strategy for single-family rentals and concluded that the return on investment was not as high as I had hoped for given due to lower rent growth than planned. We would need to supplement those with other investments in order to scale faster and increase our passive income. So, I began to contemplate investing in alternative real estate ventures.

That’s the end of Part 1. When you’re ready, check out Part 2.

Marshall Sykes
Co-Founder, Managing Partner
Capitano Investing Group

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It was my first year as a full-time real estate investor in the multifamily sector, and it was simply better than I imagined. Thank you for your belief and encouragement as well as your willingness to listen, invest and partner. It made all the difference to me. God has certainly blessed me!

Here’s a summary recap of the year:

• Established my company, Capitano Investing Group, including the website
• Grew stronger each week as an entrepreneur and business owner – I found it quite invigorating and empowering to work for myself while still partnering with others on business deals
• Expanded my multifamily real estate network tremendously and made many new friends that share my passion for real estate investing
• Joined the Think Multifamily coaching group with @Mark Kenney that provided a strong platform and network structure which allowed me to quickly scale in multifamily   
• Partnered in 6 Multifamily Acquisitions as a General Partner totaling $174M in value with 1500+ apartment units with another deal closing in January 2022
• Increased my overall partnership to 2900+ units as a Limited Partner
• Partnered with some amazing investors – thank you again for your trust and confidence in me
• Fully embraced an Abundance Mindset   
  • Believed in myself and what God could do with my abilities at a deep inner level while working for myself – at an even higher level than I was able to achieve as a senior officer in the Navy and at ExxonMobil
  • Realized that I’m much more of a visionary and deep thinker than an executor even though I previously felt compelled to work throughout my career almost exclusively at the executor level  
  • Put any lingering negative thoughts about my capabilities and passions behind me
• Developed my business strategy and stuck with it despite opportunities to expand into other business lines – those opportunities can be explored in the future
• Completed the full cycle on my first passive investment in a multifamily deal – the actual return on investment (ROI) more than doubled the projected ROI, and this was achieved in only 2 years not the 5 years planned! The multifamily real estate market remains HOT!
• Being in real estate investing allowed me to reconnect with many former colleagues in my career network 
• Leveraged the full range of my career skills in project management, networking, construction, real estate, facilities management, and business operations

Thank you again for an amazing year! As you can tell, I really like real estate investing and have found my passion. I’m looking forward to our continued partnership and an even better 2022.

Marshall Sykes
Co-founder, Managing Partner,
Capitano Investing Group

The post 2021 Recap appeared first on Capitano Investing Group.

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There was so much more to the cruise than just the buffet.  We went on walking tours of Catalina, San Diego, and Ensenada. Marshall entered us in the free throw contest on the basketball court, and I took him to an aerobics class. We won the 5 days of exercise award, and were given a t-shirt. It was a fun way to stay healthy and not gain  5 pounds because my friends were right: the buffets were fabulous.

That is the way I felt about investing in multifamily real estate.  There are so many options, so many opportunities, how do you choose? How do you stay financially healthy? First, you have to understand what multifamily real estate investing is.

So, what is multifamily real estate investing? It is as simple as it sounds.  It refers to housing for multiple families. It could be as small as a duplex or as large as a major apartment complex. It could be as simple as a couple of units with no amenities, or as elaborate as a development complete with all the bells and whistles that the large complexes can offer.

What do you need to know to be able to invest wisely? I chose 7 areas of information that are essential when investing passively in multifamily real estate investments. I have named these the Seven Seas of Multifamily Real Estate Investing. I want to make multifamily real estate investing a journey you may want to consider.  Do I know all the answers?  No, but I can provide some good resources for you to read and investigate. A map of sorts to the Seven Seas of Multifamily Investing. 

What are the port calls on this cruise of the Seven Seas?

• Passive Income / Cash Flow 
• Property Appreciation
• Hedge against Inflation
• Tax Benefits
• Scalability   
• Economies of Scale  
• Professional Property Management 

In upcoming articles, we will make a stop at each one of these ports, do a short walking tour, and leave with a few resources. We want these topics to be more navigable, and you more comfortable and confident in any future investments. The more information you have, and the more you read and understand, the wiser your investment decisions will be.

Capitano Investing Group can help you navigate the uncharted waters of real estate investing. Let’s set sail together and explore the Seven Seas of Multifamily Investing.

Cindy Sykes
Co-Founder,
Capitano Investing Group

The post What is Multifamily Real Estate? And Why is it a Good Investment? appeared first on Capitano Investing Group.

Through the years as I moved to different companies, I continued that same strategy, contributing the maximum amount needed to receive the maximum match from my employer. 

Did I make money? Yes, I did not do too bad. The problem was that there was not enough investment diversity. If invested in the stock market – as the stock market excels, the interest rate declines. If invested in bonds, or other interest making deposits – as they perform well, the stock market historically does not. So, even though I thought I had my eggs in different baskets, it turns out that my eggs were in baskets that were tied to each other. They were inversely proportional to one another. As one decreased, the other increased. 

I met my husband, Marshall, while we were both working in California.  I was supervising a Quality Assurance laboratory and he was a young Naval Civil Engineer Corps Officer.   We were a chemist and an engineer combo – a match made in STEM heaven. We were married and the Navy whisked us off to Sicily for three years. Sicily taught us the balance of working hard while also enjoying life. We continued to travel the world with the Navy, moving every 2 years or so. Of course, this made my resume look like a revolving door, in and out of jobs with every move.  We knew there had to be a better way to use my individual strengths and focus them into one new career pathway, one that would lead us to a flexible retirement.

For Marshall and I to achieve this and to have our retirement eggs in several different baskets – we turned to investing in single family rentals. Marshall’s family had already invested in single family housing, so we simply followed the family pathway. Marshall’s parents were builders, and several of his siblings are builders as well. When Marshall’s family gets together, they discuss real estate.  Every Thanksgiving, every Christmas, table talk revolved around new construction in the area.  Real estate discussions energized every gathering, and were often followed by driving tours of all the new construction we had just discussed at dinner.  

We realized for us to get ready to jump into the real estate investing game, we needed to save up for our first investment. We saved my entire salary from my last job – a whole 18 months. This was the seed money to invest in our first rental house. For the next several years, we kept reinvesting the money we made to build more houses, increasing our real estate portfolio.

That was in 1998. Here we are some twenty years later and still in real estate.  After Marshall retired from the Navy, he took a job with ExxonMobil.  Lunchtime conversations for him at work started out about family vacations, but soon turned to real estate investing.  Wait, didn’t I just say that about holiday dinners with the family? Anyway, as with the Navy, we traveled the world with ExxonMobil.  They sent us to Calgary, Canada, and then to Dubai, UAE. When we returned home some 4  years later, multifamily real estate had become a popular retirement investment opportunity.  We researched multifamily investing, joined a mentor group, found some partners that had the same goals and interests, and haven’t looked back since.

We named our multifamily real estate investment business Capitano Investing Group. So why Capitano?  Capitano is Italian for captain. Sicily was one of our favorite duty stations, and Captain was Marshall’s Navy rank when he retired.  Capitano blends the hard work it takes to prepare for tomorrow with the enjoyment of life today. Join us on our journey, won’t you?

Cindy Sykes
Co-Founder,
Capitano Investing Group

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