703: Below Replacement Cost: The Strategic Advantage in Multifamily

While new multifamily development grapples with high construction costs and elevated interest rates, stabilized, newer construction assets can be acquired for significantly less than replacement value. Michael Zaransky, a four-decade veteran in the multifamily space, buys properties from merchant builders who face construction loan maturities or investor pressure, leading to forced sales. These acquisitions not only achieve a low-cost basis, de-risking the investment, but agency financing from Freddie and Fannie provides positive leverage from day one. Michael explains how a deep understanding of market-specific supply-demand dynamics, such as Chicago's unique rent growth despite national trends, allows savvy operators to generate healthy cash flow and substantial appreciation.