View on IdeaMensch:

Michael Zaransky has dedicated his life to building harmonious communities. As the Founder and Managing Partner of MZ Capital Partners (and co-CEO of Prime Property Investors), Michael Zaransky is a seasoned real estate developer with an eye for building properties that serve the larger community. But Michael is not defined merely by his nine to five; he is also a passionate philanthropist with a diverse portfolio. He is the Chairman of the Board for the Jewish Federation of Metropolitan Chicago/the Jewish United Fund. In addition, Michael Zaransky offers guidance and resources for socially-minded startups with a public conscience.

Michael obtained his real estate license in 1979, and has never looked back. He built up Prime Property Investors (PPI) by focusing on the student housing sector. Over time, PPI’s reach extended under Michael’s leadership, with suburban apartments and healthcare facilities located all over the country. PPI’s business is now booming. It has been recognized by industry publications and housing associations for its innovative designs and neighborhood-friendly business model. A key driver of PPI’s success is Michael’s commitment to renovate and restore existing structures to provide modern amenities and high living standards to middle class families at affordable prices.

A recognized and respected figure in the industry, Michael has written and published a number of books and articles on real estate, and has been written about in The New York Times, the Wall Street Journal, and MSNBC. His published works include: Profit by Investing in Student Housing and Purchase Rehab and Reposition Commercial Investment Property.

Excited to explore new prospects and branch out into different segments of the real estate market, Michael founded MZ Capital partners in 2005. MZ Capital Partners analyzes demographic trends and sub markets to constantly seek out new investment and asset management opportunities with a focus on multifamily properties. Michael’s eagerness to integrate novel approaches and explore new territory is part and parcel of his mentality. In his professional endeavors and charitable pursuits, Michael is not afraid of an obstacle if overcoming it will bring about a meaningful difference.

Religious values and family history have influenced Michael’s trajectory and fueled his ambitions. Michael’s family history is a painful one: many of his relatives suffered a tragic fate in Eastern Europe during World War Two. The survivors of the concentration camps, including his grandfather and in-laws, passed down hard-won life lessons to the proceeding generations. Taught from a young age the importance of giving back to the community and making the world a better place, Michael has made concrete steps towards these lofty goals.

For Michael, being a positive and proactive member of the Jewish community is important. He was President of Congregation Beth Shalom in Northbrook, Illinois and General Campaign Chair for the Jewish United Fund. As a current Chairman on the board of the Jewish Federation of Metropolitan Chicago, Michael helps steer social service programming that gives back to the Windy City and beyond.

Where did the idea for MZ Capital Partners come from?

I’ve actually grown up in an entrepreneurial family, and for as long as I can remember, our business was real estate. I’m actually the third-generation of my family to go into real estate, but I wanted to formalize our general business. Today, my son is also in the business with me.

Specifically, I founded MZ Capital Partners because I saw an opening in various sectors of the real estate market: there were a lot of private investors looking to team up with someone who had both the unique perspective and the requisite experience. In particular, many of these investors wanted to get in on the booming multi-family rental market.

What does your typical day look like and how do you make it productive?

My days can be unpredictable, aside from my morning routine. When I wake up, I always exercise, so that I will have energy to help me get through the day. During this time, I also try to catch up on the news and stay abreast of current events–an important habit for any entrepreneur or investor, given how interconnected our world is.

Much of my daily schedule revolves around investment opportunities, so each day looks different, depending on both how many deals we have in our pipeline, as well as what stage of the deal we’re in. For instance, my team and I might visit the site, conducting a physical tour of the proposed asset (such as a multi-family apartment building). Or we could meet with planners and architects to consult on what renovations we can carry out, sit down with analysts to do a risk assessment, or meet with investors and other potential business partners. Some days, the work runs from early in the morning until late at night–particularly when we’re close to the end of finalizing a deal.

If there are no investment opportunities or deals in the works, my team and I will spend most of our day researching and analyzing new markets, developments, or trends in the real estate industry.

I also try to devote some time to philanthropy, either during the day or after work. I’m very involved in philanthropy in the local community, be it raising money or helping administer charitable entities in Chicago (where I live).

How do you bring ideas to life?

My team and I have a very specific process that we’ve refined over the years, the result of hard-won experience.

Let’s say we’re looking at a lush, garden-style middle-tier apartment community, either in a suburb or major metropolitan area. Though the apartments are a solid moneymaker, they’re in need of renovations and improvements. Our process would consist of the following:

-Look at lots of deals and opportunities at major brokerage firms. As we do so, we keep in mind what we want: we determine whether the investment is a good fit.

-If we like what we see, we’ll continue with a physical tour of the property. This is important to get a sense of what to expect, what needs to be remodeled and renovated, and how the development can be marketed–both to investors and renters.

-If it passes that stage, we will continue to research the developments thoroughly. In particular, we look at competing properties, calculate margins and revenue, and generally come up with a vision (and strategy) for taking the development from where it is today–to where it we need it to be, in order to enhance a profit.

-We research the market, analyzing areas of job and market growth, studying the overall economy, and importantly, whether there’s any overbuilding in the area. Needless to say, we do our best to avoid oversaturated markets–or ones with the potential to become oversaturated too quickly; some amount of barriers to development can actually help our project become profitable.

-If the opportunity makes it past all these stages and we like what we see, we’ll negotiate a contract with the property.

What’s one trend in real estate that excites you?

Lately, I’ve been very excited about suburban apartments, which present an attractive alternative to the busy, often overcrowded, urban core. I’m much more eager to snap up suburban locations; that’s not to say that urban apartments don’t have their value.

I also like to see an asset that boasts high-quality construction, decent room sizes, and room for community amenity space–especially those developments which are tired, dated, and slightly worn out. Here, I see an opportunity; after all, renovating, rather than rebuilding, such apartments are a key tenet of my business model. I know what I can turn these apartments into.

What is one habit of yours that makes you more productive as an entrepreneur?

I think this might be a little out of place in the digital age, but I very much like to make lists on yellow pads. As I move down my to-do list, I scratch off things, re-organize other things, and winnow out distractions. After I’ve scratched off most of my deliverables and tasks (and most of the page is scratchy ink rather than blank paper), I’ll move the remaining items to the next page.

It’s not that I’m an analog person who doesn’t like technology. Instead, I’ve just found that using yellow pads really helps me stay focused, avoiding electronic diversions and staying away from multitasking.

What advice would you give your younger self?

In the real estate business (or in any investment-related field), you always think about the one that got away–the deal that you should have gotten into decades ago, because it’s a moneymaker now. Imagine Back to the Future, where Marty McFly shows up with a book of stocks–and gets rich thanks to hindsight.

What I would say to my younger self is this: if you have confidence in the market, don’t be afraid to go for it, and certainly don’t hold back. Just run with it, because you’ll never know it goes.

Tell us something that’s true that almost nobody agrees with you on?

At the risk of being corny, I’ve found that most people are decent, caring, good individuals who want to help you. They’ll want to collaborate and work with you–even if there’s no personal gain for themselves. If you ask others (especially the jaded and cynical among us), they’ll say that on the whole, humans are greedy and selfish, especially in business. However, in my experience, I’ve found that when you build relationships and treat others with openness and sincerity, they’ll do the same to you.

As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?

Personally, I believe that the very nature of an entrepreneur centers around re-evaluating, re-calibrating, and altering the direction of their business–just as captains must steer their ships through turbulent waters to safety. Unless you constantly reinvent your approach and your business, you’ll keep doing the same thing over and over again–and your business will burn.

What is one strategy that has helped you grow your business? Please explain how.

I think one strategy that has helped grow my business is this: don’t be afraid to think big and go big, and figure out how to do it. I never would have imagined that I would be doing the kinds of transactions that I am doing today. It’s worth the risk and the opportunity, and it’s amazing what you can pull off if you put your mind to it.

What is one failure you had as an entrepreneur, and how did you overcome it?

One way I failed as an entrepreneur was waiting too long to attract outside capital to fund growth. I overcame this by broadening investment: I buried my personal fears of rejection, talked to as many people as possible, and invited the right talent to join me in the as investors and business partners.

In hindsight, I understood that my growth was held back by a lack of confidence, which I had to overcome. Once I did, however, the business scaled up–and quickly.

What is one business idea that you’re willing to give away to our readers?

I think there’s an opportunity for consultants who are willing to put together teams in real estate business and help with the various aspects of due diligence involved in buying a property. These include property inspections, developing construction budgets, and doing environmental and random testing in an efficient manner with qualified and trained people. There’s really an opportunity for someone to organize a group of professionals that carry out the whole process and make it available on a national basis. Think of it as a one stop shop.

What is the best $100 you recently spent? What and why?

Recently, during a trip to Manhattan, I stopped at a booth on the street. There, the volunteer told me a story about a program to feed homeless people. He just happened to be a very engaging, skillful storyteller–so I gave him a $100 dollar bill.

His reaction was also unexpected: his eyes lit up and he even hugged me. I really hope that the $100 made a difference for him and helped him build up his own confidence as well. I don’t think he got that from anyone else.

I do agree that happiness is built on buying experiences, rather than possessions. But in some ways, the longest lasting happiness you could buy is a great experience for someone else. I find charity to be very rewarding in that respect.

What is one piece of software or a web service that helps you be productive? How do you use it?

Quickbooks is a great way to keep track of everything, from business investments to costs and expenses. It’s just an excellent program–really well-made, intuitive, and very well-designed.

What is the one book that you recommend our community should read and why?

I recently read Am I Being Too Subtle? by Sam Zell. It’s the life story of a self-made real estate entrepreneur, and someone who’s now on the Forbes 500 list. Sam is based in Chicago, and today, is one of the largest real estate holders in the country. In his book, he talks about entrepreneurship, immigration, and risk-taking–how he started from nothing.

What is your favorite quote?

I have a stone facing my desk, that’s engraved with a quote from Winston Churchill. It reads, “Never, never, never quit.”

Key learnings:

  • I believe most people are inherently good, caring people. Even though business is typecast as a dog-eat-dog world, the truth is that if you exude positivity and openness in your dealings with others, people will do the same. They will go out of their way to help you, even at no additional gain to themselves.
  • It’s true that it’s always better to buy experiences rather than possessions, particularly if you want to set a foundation for long-term happiness. But buying experiences for others–particularly the needy–is even more rewarding than buying a trip or a vacation for yourself.
  • The times that I’ve been most successful in my business were when I dreamed big and didn’t back down from rejection and doubts–whether it be my own or those of the people around me. My one regret comes from not being daring enough (or comfortable enough with uncertainty and risk); as a result, I lost out on profitable investments.
  • Read Sam Zell’s Am I Being Too Subtle? It’s a classic case study in how someone through sheer force of personality (and business acumen) transformed his company into a thriving, massive enterprise. It also makes a strong case for taking calculated risks.