Multifamily Investing Strategies for 2025: Spotting Opportunities Others Miss

Fab Lucchese (00:00)
when somebody says to me.

⁓ there’s a, there’s a problem. Stay away from it. I’m like, my ears perk up and I’m like, well, tell me more about that. Cause that the lineup of people to look at that is shorter, especially when the people representing it themselves are saying, Hey, this is a dog. Like, wait a second. You’re trying to sell this. You’re telling me it’s a dog. That means the, line for people to look at that opportunity is less. And if you’re able to come to the table with a, with a fresh look at it, the problem with that I find is that.

When I see an opportunity, not everybody does. But like what I’ve always said is if everybody saw it, then it wouldn’t be an opportunity.

Quentin (02:06)
Hello, everyone. Hello, hello. Welcome to the Real Estate Pros podcast. I am your host, Q Edmonds, and I’m excited. I say it all the time and I mean it. I’m excited, though. I’m excited because I got somebody here today who’s been in 35 years of experience, 35 years experience, but just not in just one thing. We talk about in developing, being a developer, being an investor, being an operator.

being experiencing construction. mean, this guy, you know, he’s just, I mean, just a wealth full of knowledge. And so I am so happy to bring on today, Mr. Fab Lucchese. How are you today, sir?

Fab Lucchese (02:50)
I’m Wonderful, pleasure to be here this morning with you.

Quentin (02:54)
Man, it’s a pleasure. The pleasure is all mine. Like I said, 35 years. I know you’re going to bring so much value to the show, to the space. I’m so excited about people getting to hear all the things that you’ve been involved in, just different aspects of your experience. And so I just want to dive in here. Let’s start the conversation here. If you don’t mind, tell people kind of what your main focus has been these days.

And if you don’t mind telling what markets you operate in as well.

Fab Lucchese (03:27)
Sure. Yeah, absolutely. I’m presently, and I should back up a teeny bit because I’m actually, I a lot of my business for 30 years across the border as a Canadian working in the US and just traveling and having to deal with the long distance issue, not to mention the exchange rate issues as well. Presently I’m relocated in ⁓ Florida, I’m actually specifically in Daytona Beach. But for the most part of my career, I would say my bread and butter, my center line has been multifamily.

And then in that multifamily, it’s been everything from market rate to specialty housing, like student housing. I’ve also done some condominium development as well. In my early years, I started basically acquiring existing smaller apartment complexes. By smaller, I mean like 100 units, 80 units or something like that, if some people think that is small. And then slowly as I developed on that side, those were mostly repositioning and so on, which I really still like that.

⁓ part of the business, but those opportunities don’t seem to be as apparent as they used to be. repositioning plays and adding upgrades and trying to take an 80s vintage multifamily and doing those things. And I’m finding a lot of people are getting into trouble in that space by over-improving these things, thinking that I spend 10,000 redoing an apartment unit when they really only have to spend 2,500.

thinking that the rent’s going to be higher. And that’s one of the opportunities I’m seeing is a lot of these apartments that were

bought opportunistically maybe five years ago, interest rates were quite low, money was easy to get, everybody jumped on the bandwagon about repositioning, spent way more than they should have, not seeing the rents there, not to mention the fact that the rates did what they did and now they’re finding the challenges that as their loans are coming to maturity.

For some reason, a lot of people end up getting five year loans that are just maturing out now. And now you’re sitting in an environment where the rates are, you know, six plus in a market where their loans maturing at sub four, ⁓ and with an over improved property that they spent too much and never quite got the rents and then another lender’s wanting, more surety on what they’re doing on the loan. So now you’re getting compressed on the loan. And, know, so I’m seeing opportunities in that space that are the older.

apartment communities that are maturing out on their loans and that perhaps are a little bit upside down on those things. I feel sorry for those people because I did some of those things myself over the years as well. ⁓ And, you know, likewise, there’s even some of the new construction ⁓ products that were done and they’re kind of sitting in the same place where they built new product, you know, five, six years ago with for whatever reason, again, five year maturing debts. I’m seeing them. I’m watching some of those opportunities ⁓ as well. And you’re again, you’re buying them.

Quentin (06:46)
Yeah.

Fab Lucchese (07:05)
you below replacement value. Now, when I started 30 years ago, replacement value was, you know, it was funny. Nobody really looked like you’re buying like, I remember acquiring an apartment complex in Orlando. One of my first ones that I think it was like 28,000 a door. This was like years and years ago. And I, and and and, replacement would have been at the time probably about 60, 65,000. So the Delta between older product and replacement was huge.

And everybody said, yeah, but replacement, you you’re not going to replace 80s vintage, but the income is the income. know, they weren’t really trading. Their rents were not that much lower than the new product, maybe from cost and so on. But now the Delta between an older product and a brand new is starting out to slip away, too, because nobody’s building. The cost of bill now is enormous for new construction. It’s just crazy. So going back to now, we’re kind of everybody’s going building because the financing was there, the rates were low and so on.

And now people are trading back to looking at existing inventory that they can buy at a discount to replacement value. And replacement value seems to mean more today than it did 30 years ago when I started that. So I think in the multi-family space, I think those are opportunities. I also see the big demand in the rental side on people that really want to live in a home because they have a family. They want a fresh air front door and they want a private backyard. So that way we’ve seen a lot of the…

that they’re built for rent, BTR industry kind of really pop up a lot. And we’ve seen things now that mutated from conventional, a single family type community to kind of like a hybrid apartment where the individual residences are live like an apartment in the sense that they’re in a cluster. They don’t have their own garage. They have garages, but not their own garage. And you basically park and walk to your unit, but your unit now is a, it’s got a fresh air front.

It’s got a fresher front door in a private backyard, but it’s in a cluster environment. So it’s kind of like a hybrid. ⁓ And I think that market, that type of a product might, ⁓ it’s going to be somewhat challenged when the rate, people, those people really want to be in a home. think as rates drop, those people are going to leave and want to be in a home where they actually own it. Whereas the developers that did the BTR, that’s more conventional single family.

with the idea that one day I might sell that off individually with individual, know, fee simple lots. think, uh, you know, those might, might do well, but, know, if I lived there in an apartment, I’d want to live in a place where I don’t have somebody above me and below me, if I could afford it affordability. I think that’s, know, there’s, opportunities coming down the pike with that as well too. And going back to the cost of development, I think, uh, finding new ways to build things, um, I think make a lot of sense. We’ve seen some new technologies coming out.

that whether they’re panelized systems or, know, sip panels, structural

insulated panel type systems and things like that using steel instead of wood, which has always been more expensive. Wood is cheap here in the South, obviously labor costs are a lot lower as well. So we build things much less expensively than we do like, you know, up North or even in Canada for that matter. ⁓ so I think finding opportunities using new technologies, cause I’ve always said construction is still like a.

for the most part of technology that’s 150 years old, we’re just using power tools now. And it used to be very more efficient to build. And nowadays we have a lot more red tape and compliance issues and ⁓ administrative issues we have to deal with. And things take longer to build now than they did even 20 years ago, because it seems to have a lot more of those sorts of things and requirements. And that shouldn’t be the case. Out of all the industries, everything.

You know, if we were building cars today, the way we did 30 years ago, the car would cost you half a million dollars today, but everything got more efficient technology took advantage. I think in, construction development, I think that’s left been left behind. I think there’s a lot of room for, to, find better ways to do that. And I think when those things start to come in and there are, there’s plenty of new concepts we’ve seen that, you know, 3d printing homes, you know, the, Horton’s doing a site in Texas, all 3d printed homes.

You know, and they cost a little bit more, those technologies, once they get up and going, they actually end up in the long run having a better product that lasts longer and, and, ⁓ know, costs costs a little bit less and make it more affordable for the end, for the end user.

Quentin (12:06)
Absolutely. I love it. I love just how you just, you know, was talking about just the things that’s changing, right? You know, the things that’s changing, how things are looking different with the construction, with these new properties, what’s going in, the materials that they’re using. I mean, things are forever changing. And I love, I just love, you know, your insight on it. But I would love to know this. When things are forever changing.

You know, sometimes the climate is not easy within the climate that we’re in. So what keeps you motivated? What keeps your kind of your engines kind of running smoothly and your mind running smoothly when you look at the things that are changing around you?

Fab Lucchese (12:51)
that’s not that easy to answer. I mean, I’m, I’m, I’m always looking at one thing I do that I assume everybody does, but I guess not everybody does. look at things differently than a lot of other people. So, I mean, when I, when I see challenges, I look at them more as opportunities. Cause if you can solve that opportunity, you know, like everybody easy to gravitate to the low hanging fruit and the pretty stuff.

You know, and I’m not that guy. Like I don’t grab it when somebody says it’s pretty, it’s nice, it’s making money, it’s perfect. Lovely. stay away from that stuff. When I see somebody that says, Hey, I have a situation I’m trying to, you know, maybe perhaps you’re repurposing the building into some other use, like a hotel to residential. A lot of people have done that or self stories, you know, those sorts of things. And sometimes the challenges are even from a business point of view, and that’s just a physical asset. So I get excited

So, you know, so if I look at things in a, different viewpoint from a different advantage or a different level of execution, you know, that’s great. Now the challenge with that is great for me. I understand how to execute on it. I believe in it. People will try to talk you out of it. Sometimes I think that’s a big part of the challenge of being entrepreneurial in the space is that sometimes you got to stick.

to your guns if you believe in something and you feel you can execute it. Don’t let everybody just talk you out of it. Listen to them obviously in case you learn something, you miss something. I would love to be challenged as well. really do because I want to make sure they try to talk me out of it. If you can talk me out of it, great. I want to try to get talked out of it, so to speak, but I want to believe that what I’m doing is the right thing. If I believe in it, I see it, it gets done. But the problem is then there’s financing, right? And we all know what lenders are like. Lenders are like, they want to say, well,

Show me three other people that did exactly the same thing. They want to know, like they’re not really visionaries and things. So the biggest challenge is for you to take this vision that everybody sees and present it in a way to the capital side, which usually represents a big portion of your investment, know, 60, 70, 80 % of that, and try to get them to get on site as well too. So that’s sometimes, you know, two different sides of the spectrum that they have to kind of, kind of bring together.

And so I like those challenges. I like those opportunities to kind of put something together because I realized if I’m able to put those, you know, a great opportunity and wrap it around with some good capital structure and then maybe bring investors to buy into the vision. And now they’re buying into me because on the execution side, I think I got the perfect recipe. And like I’ve told, you know, people have asked me, why am I in the, by the way, I love doing business in the U S.

And there’s certain parts in the U S that I think are easier for me to work in, like in the Southern States. But I come from an environment in Canada and I’m not poopooing Canada in any way, but it’s difficult to do things in that environment. Cause there’s not a lot of things that trade the mentality of people there are not necessarily all entrepreneurial minded. There’s a few that do the majority of the business and it’s hard to kind of get into it.

In this environment, find myself, and maybe again, just the way I look at things, there’s a lot of opportunities, lots of things happening, especially in the South. We have a lot of long distance investors that buy things. come in, they make a little bit of money. Maybe they’re a doctor. They come in, they figure, okay, now I want to be a real estate investor. They hire all the wrong people and they get into trouble. And I think there’s always opportunities. you keep your ear to the ground, talk to the right people, opportunities come to you. If I had nothing to do today by this afternoon, I will have a deal. Go on.

If I had nothing, I will have a deal going. actually just the question of, you know, it’s like, I don’t want to say I’m a kid in a candy store, but there’s, there’s been, there’s no shortage of opportunities. Now there was recently, I would say probably about maybe four or five years ago when money was cheap and I always joked about these, you know, we’ll call them young younger people. Cause I’m an older guy now, you know, like I feel like they took a weekend course on how to together real estate Monday morning. They’re in real estate.

They, they, they, know, through social media, they raise a little bit of money and to completely get into trouble because all they had to do was show up because the market carried you. That’s not the case today. Right. And, and in those days, it was hard to find opportunity because people were just picking up things by the pound. They weren’t picking it up because it made sense. And that’s when I took a pause. And that’s why today I actually I’ve liquidated all the multifamily stuff because some of those people picked it up. Now, some of those things I sold.

I can buy them back today at a discount. majority of them are, know, somebody wants to pay a premium. I’m a seller because there’s no shortage of opportunities that I can create. Just the question of getting the right market, the right product and the right things and maybe going, gearing more towards those situations, which I kind of really like, you know, people have problems and so on. There’s always those situations there. but so the only time I, I prefer a market where there’s turmoil and situations and flux.

I think when you’re riding up the market is a good time to maybe be liquidating selling and being careful of that. Also being a long-term holder, you have multifamily long-term, I think you do really, really well, but that’s a different kind of a mindset to have. Say like, don’t care what the market does. I did that actually with a student housing portfolio. So I started building, I got into the student housing business by accident. did a, this is an interesting story. think the listeners would like it.

I was always doing just traditional multifamily deal. A project came to me by University of Central Florida on Alafeya Trail that somebody was trying to do is what they called then as a kiddy condo. They were selling individual condominium units to investors, know, four bedroom, four bath, selling it to a family, keep the kid, keep in one, rent the other three units, and then off you go. The deal failed. I picked it up because I’m thinking of buying an apartment complex. I go, that’s student housing. It’s not that hard.

to do. I didn’t realize the challenges in student housing and how it’s kind of like a hybrid between really like a hospitality kind of a situation because now you have furnished units. They’re only there for a season, you know, for the school year, and then they leave kind of like a hospitality play. The level of service they have to provide is kind of like a hotel type. It’s also almost like a hybrid in a seniors environment where

You have your client and then you have the family that you have to talk to, just like the students. You have the students and you have the family to deal with. And you’re like their housekeeper. You have to keep their kids safe in that. So I learned all about how students are and so on. And I kind of learned that business the hard way. So after I did my first one, I went out and I did over 2000 beds of student housing from ground up construction to management to exit. And I started that portfolio with the intent to kind of grow that business and continue.

continue accumulating that portfolio. And I said to me, I don’t care what happens, I’m not going to sell that. I’m going to continue doing it. A long came on offer. couldn’t refuse. never, never say never. Right. So that’s why I just started that. That’s something I was committed to doing. And, I, know, and, and I’m glad I am so glad today that I sold that, but there’s up, you know, that’s an interesting space. And I still like that student housing space, by the way.

Quentin (20:30)
Yeah.

Love it, man, I love it. Well, let me ask you this. What’s next for you, Mr. Fab? Like, what’s your, are you looking to scale something next? Like, what’s your next real goal?

Fab Lucchese (20:53)
Yeah, I’m actually looking at kind of like ⁓ to some degree, some spoon type related. So I’m looking at, I think I mentioned to some new technologies that I’m looking at to use basically, it’s a quasi panelized system using steel type and fiber, a special product that I’m kind of excited about. I’m digging into it right now and I’m probably going to build my first one. It’ll be a quad.

type unit and just is really I’m doing it just to get around the technology, understand the timeline, making sure the logistics, the manufacturing happens, the delivery, and I’m able to get my permits because now you have to educate the city building department because you’re using a different technology. So there’s one happening right now in Orlando, one of these quads and here in Daytona Beach by the college is a perfect site, but I’m looking at this thing and it seems to make a lot of sense. I’m hoping I’m able to execute at the end because with that, I want to be able to.

use that product to develop more multifamily, like we talked about earlier with a better product and perhaps even some for sale product, which I think we can get something done, which is going to compete with wood construction from a cost point of view, but also from a timing point of view to get it built. But from a performance point of view, have something that is a non combustible product with withstand hurricanes and so on and have a lifespan of the exterior and roof.

that would lead to the point where the maintenance costs and so on to a typical owner ⁓ is going to be easier to hang on to. And also a very efficient type of a product from an energy conservation point of view. And even with technologies like the ability to install solar panels, so this system would come ready available to adapt solar panels without having to penetrate the roof system. It’s a technology that’s all built in. So again, building something smaller. So I’m really excited about that because I can scale that up.

Nicely, but I’m experimenting with my first ⁓ couple of sites right now with that. I’m also looking at, ⁓ I have a couple of opportunities where ⁓ because of the pullback on the single family market, has been, there was a situation where a lot of the single family market got people got priced out and they kind of converted to doing townhomes. And likewise, a lot of multifamily got pulled back and people are relooking at those sites now to do.

a BTR product or townhomes, but now a lot of home builders are actually dropping townhomes as well, because the market is done when it’s done. So I’m going back and re-looking at those sites where the, because there’s a lot of people got into land development plays to kind of get a property ready with the idea that they were going to sell it to some of the home builders. There’s a lot of inventory sitting there and now I’m seeing like the DR Horton’s and so on and Ryan Homes and they’re literally dropping deals that.

because of the level of saturation that they have in their inventory. And frankly, a lot of home builders don’t like to keep inventory of lots. There are a few that do, but a lot of them really just want to have a take, have the land developer do the development, service all the lots and have on a takedown schedule. So there are land developers that got into that space again, as another sort of a business to kind of sideline business that kind of fell into it. And I’ve done some of that myself as well. And

Now those opportunities, because you want to relook at them potentially to do, convert those to a rental product or redevelop them into another product. So being able to take something like a technology that maybe now all of a sudden those sites pencil out where they didn’t. I think trying to put those two opportunities together. So you have a land developer that started down the road and perhaps in some cases, I have one opportunity that came to me that the developer put all the infrastructure in the ground. So he’s got all this.

You know, there’s transformers in, the pads are in, pad ready, ready to go. It was a townhouse development and stopped right there. They decided not to fund because they saw they couldn’t get their, you know, to do the vertical construction, it wasn’t going to pencil out for them. So I’m re-looking at that now in a different kind of a light, maybe slightly different product, you know, redesigning it to make it more efficient and make it work for the market. Because again, people were building things by the pound, not because it made money. It’s like build it and we’ll make the money later.

Whereas you want, know, I’ve always, but by anything I do, anything I do, I always make sure I, the day I start it, I’ve already made money. If I haven’t, if I don’t, if it’s like, I’ll build it and you’ll make money later. No, I have to know in my mind, I have to believe that, that I bought it well at the beginning and, and the day I execute on it, I want to get out as quickly as I can. Cause I’m going to turn that activity and that product into, into money. And I, I, and I think a lot of people.

forget about that part of it. It’s almost like I want to get it done and I’m hoping to have money. Right. And I think people fool themselves a little bit on those sorts of things. mean, like, you know, I hit the same kid in the candy store. There’s plenty of opportunities out there. People looking for new solutions. And I think looking at something differently and having 30 years, I think is something I mean, somebody just starting off, it’s hard to apply, you know, because they don’t have that history.

And I, but on the downside though, there are plenty, like have a lot of friends in development. They’ve been in place for, you know, they have more experience than I have more years than I have, but they become kind of negative because of their history. You know, they, they, they tell you now though, don’t do that. I go, and I said to them, go, listen, put yourself when you were 20 something, you, you did that deal. You would have done that deal in a heartbeat. Now you’re telling the 20 something not to do that deal because you’re, you have 30 years of experience.

And your experience is actually preventing you from doing that. I people sometimes, sometimes knowledge is too much. need a little bit of courage to get out there and do it. know, people apply their old history and say, wait a second, when you were 20, you would have done it now that you’re 65 or not. Like, you know, this is not how you made your money in the first place. think it could come, it’s a dual that’s sore that, you know, having those experiences. think so as you get, as you accumulate all these experiences, you got to keep focused.

Quentin (26:38)
Yeah.

Yeah.

Fab Lucchese (27:00)
on the good things that you did. If you have negative things, learn about those, but don’t let them prevent you from doing things, right? It’s like I tell people all the time, you know, be a child. A child always thinks about what am I going to do? What am I going to be? I want to be a fireman. I want to go to the moon. I want to do this. As you get older, you start talking about, it was better yesterday. I used to have this and I used to have that. did that. I think as you just like with the development, you focus too much on the negative.

Quentin (27:07)
See

Fab Lucchese (27:28)
historically enough, the positive going forward. So I think that’s a, you know, I think everyone that it’s at any, any business whatsoever to stay focused and positive. I think in that just a general skillset to have as a, as a human being, as a person, as a business person, business minded, I think is important. And I think the way you want to do this, surround yourself with people just starting off. And one of the, I get a lot of, ⁓ I’m excited to talk to somebody just starting off. I’ll take the time.

to tell them, not to tell them the negative things, but tell them how they look at things and believing in what they’re doing and so on. So having a fresh young mindset to kind of be beside or help or mentor or whatever to me is exciting. When I get around the letter older developers and so on, they actually depress me half of them. They want to talk about what didn’t work out and I wanted to hear about it, but they don’t want to drag it down.

Quentin (28:21)
Absolutely. Well, listen, man, I thank you. 35 years of experiences is shining through and I thank you for all your input. love your unique lens on everything that you said. But listen, before we wrap, if someone wanted to reach out with you or connect with you or maybe collaborate with you, Mr. Fab, what’s the best way people can get in contact with you,

Fab Lucchese (28:41)
Yeah, absolutely. mean, email, I’ll be happy to give you my phone number as well too. Email was [email protected]. It’s F-A-B at J-A-Y-M-O-R-G-R-O-U-P.com. Or they can call me, text message me 386-317-1055. I’m pretty easy to get ahold

Quentin (29:03)
Well, listen, Mr. Fab, I appreciate you so much. I appreciate your time, your stories, your perspective. Man, I love what you’re doing in this space and I hope when people get 30 years in, they can be just like you and just have this wealth of knowledge and experience, man. Thank you so much for being here today.

Fab Lucchese (29:18)
You’re

welcome, Q. I appreciate it. Thank you very much for letting me be on this show. Thank you.

Quentin (29:22)
Absolutely. Yes, sir. Yes,

sir. And for those that’s listening in, if you value this, please make sure you are subscribed. You do not want to miss out on the upcoming conversation that we have with incredible people just like Mr. Fab Lucchese. All right? Listen, appreciate y’all. Y’all have a great one, and we will see you on the next time.