Why “Passive Investors” Fail | Shawn Griffith on Risk, Homework & Multifamily
Description
Shawn Griffith of Kraft Capital explains why no investor should ever be passive, how to underwrite risk, and why multifamily is a long-term wealth game.
In this episode of RealDealChat, Jack sits down with Shawn Griffith, managing partner at Kraft Capital Investments, to discuss the reality of multifamily investing, the dangers of being a “passive investor,” and why risk management is the cornerstone of long-term success.
Shawn shares his journey from his first LP deal that tripled investor money, to building Kraft Capital with partners and launching a new flex fund. He also explains why setting goals that scare you matters, why underwriting risk is more important than chasing returns, and how investors can protect themselves in today’s market.
Here’s what you’ll learn in this conversation:
- Why “passive investor” is the most dangerous mindset in real estate
- How to vet sponsors and do your homework before wiring money
- The three types of distress in multifamily: physical, financial & operational
- Why fixed-rate debt beats floating-rate in today’s environment
- How Kraft Capital underwrites and screens 100+ deals a year
- Market trends: flat rent growth, rising insurance, taxes & payroll costs
- Why Dallas-Fort Worth and the Mid-Cities area remain strong markets
- How EOS (Entrepreneurial Operating System) helps scale their firm
- Why partnerships and transparency are critical for investor trust
- Actionable advice: how to evaluate risk vs reward before investing
📌 Learn more at KraftCapitalInvestments.com
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Timestamps
00:00 – Why goals should scare you
01:00 – Shawn’s journey: LP investor → GP syndicator → Kraft Capital
03:00 – Building a firm with partners & scaling with EOS
05:00 – Core principles: never run out of money
06:00 – Why “passive investor” is a dangerous myth
08:00 – Case study: losing 91% equity & lessons learned
10:00 – PPMs explained: risk sections investors must read
11:00 – Kraft Capital’s deal screening process
13:00 – Why most sellers today are distressed
14:00 – The three types of distress in multifamily
15:00 – Market trends: rent growth flat, expenses rising
16:00 – Insurance, taxes & payroll as biggest expense drivers
17:00 – Risks in heavy value-add rehabs
18:00 – Importance of transparency with investors
20:00 – Favorite success story: first 64-unit deal with 3.5x return
21:00 – Advice to new investors: start now, real estate is a long game
22:00 – How to decide how much to invest (risk tolerance test)
23:00 – Why doing what the 99% don’t is the path to wealth
24:00 – Current projects: flex fund, triple net & alternative assets
25:00 – Risk vs reward: how to evaluate opportunity cost
27:00 – Rapid fire: lies, advice, books & tools
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