The Passive Investing “Traps” Most Limited Partners Never See Coming

Real Estate Investing for Cash Flow with Kevin Bupp

Kevin Bupp

Investing, Education, Business

4.8 • 679 Ratings

🗓️ 30 March 2026

⏱️ 42 minutes

🔗️ Recording | iTunes | RSS

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Summary

Over the last few years, many real estate investors learned a painful lesson: a polished pitch deck and impressive projections don’t guarantee a “safe” investment. Deals went south, capital got stuck, and naturally, passive investors are now far more cautious about where they deploy their hard-earned money. Sarah Miskelly, founder of Hylee Capital, has witnessed this shift firsthand. Today, smart limited partners are no longer chasing flashy pro formas. They want risk-mitigated, institutional-grade opportunities that once felt out of reach for everyday investors. At the same time, there’s been a growing shift toward debt investments, many of which Sarah believes aren’t nearly as safe as they appear. Sarah shares how she evaluates sponsors and syndication deals through both the “hard” and “soft” sides of due diligence, along with the red flags she watches for—mistakes that have burned countless LPs in the past. She also breaks down the return metrics that matter most to hands-off investors and highlights the most compelling opportunities emerging in today’s housing market—from multifamily apartments to mobile home parks. Insights from today’s episode: Sarah’s step-by-step process for vetting operators and syndication deals The return metrics that matter most to passive investors in today’s market Why many LPs are moving toward debt investments (that aren’t as safe as advertised) How to build a resilient portfolio by blending high-IRR deals and steady cash flow How building multiple cash flow streams can lead to greater lifestyle freedom — Connect with Sarah on LinkedIn Hylee Capital Recommended Resources: Accredited Investors, you’re invited to Join the Cashflow Investor Club to learn how you can partner with Kevin Bupp on current and upcoming opportunities to create passive cash flow and build wealth. Join the Club! If you’re a high-net-worth investor with capital to deploy in the next 12 months and you want to build passive income and wealth with a trusted partner, go to InvestWithKB.com for opportunities to invest in real estate projects alongside Kevin and his team. Looking for the ultimate guide to passive investing? Grab a copy of my latest book, The Cash Flow Investor at KevinBupp.com. Tap into a wealth of free information on Commercial Real Estate Investing by listening to past podcast episodes at KevinBupp.com/Podcast. 0:00 Intro 0:49 Total Lifestyle Freedom 9:02 Better "Hands-Off" Investments 10:54 Operator Red Flags 18:54 What Has Changed? 22:39 LPs Are Being "Cautious" 28:44 Playing "the Long Game" 37:00 2026's Biggest Opportunities 40:49 Connect with Sarah!

Transcript

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0:00.0	Over the last few years, a lot of real estate investors learned a hard way that a polished pitch
0:04.2	stack and a big internal rate of return number don't equal safety. Deals went sideways, capital
0:09.4	got trapped, and suddenly due diligence mattered more than ever. This is the Real Estate
0:13.4	Investing for Cashflow podcast where we talk with experienced operators, investors, and capital
0:18.3	stewards about how to build durable cash-filling real estate
0:20.8	portfolios through real-world discipline. Today's guest sits in a very unique seat. She doesn't
0:25.1	just invest her own money, but she also allocates capital on behalf of others. And that changes
0:29.7	how you look at risk. Sarah Muskelly is the founder of highly capital. She grew up working alongside
0:34.2	her father and her family's portfolio in Canada and shares how that
0:37.9	experience in real estate has provided a level of optionality for her and her family. We're going to
0:42.5	kick off the conversation here today focused on intentionally designing a lifestyle supported
0:47.0	by real estate, cash flow, and long-term stewardship. One of the coolest parts of your story is that
0:51.9	you've been able to craft a life where you know
0:55.9	you split your time between Costa Rica you know Costa Rica you know Costa Rica the majority time and
0:59.6	Toronto you're you know originally from Toronto but move with your family you've got you
1:02.6	got three children a husband and you guys packed up and moved from the you know from the cold
1:07.5	north down to Costa Rica and built a life there. And so you would love to know
1:12.0	what key decisions that you made that ultimately made that lifestyle possible. It's going to sound
1:17.4	cheesy, but real estate. So, I mean, you know, I grew up, I grew up in real estate and, you know,
1:23.0	grew up in property management, helping my dad essentially, you know, clean units before new tenants came in and, you know, helping with the books. Like, he would always be putting me to work. And then I really understood asset management, like from a young age, a multifamily. And then from there, you know, I started getting into real estate sales. And, you know, I was scaling up a business in Toronto, you know, pretty successful.
1:44.9	But then it was, you know, I thought about kids and it was that kind of season of life.
1:48.5	And I do not like winter. I feel like this classic, you know, answer is just not fun for me personally.
	...

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