Finding Opportunity in Miami's Overlooked Small Multifamily Market

Written by:

Steve Marcinuk

Date:

15 Dec 2025

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Miami’s multifamily sector has changed dramatically in recent years, as institutional buyers and out-of-state investors have driven up prices and compressed cap rates across the city. While many local operators have responded by either leaving for other markets or scaling up to compete with larger players, Alejandro Gershanik, a sales associate at BM2 Real, has pursued a different path that focuses on smaller, often overlooked properties.

Gershanik, an Argentine-born investor who manages about 680 units across South Florida with his family-backed investment group, has intentionally shifted away from larger buildings. Instead, he targets small multifamily assets—a strategy that goes against the prevailing wisdom but has proven effective in Miami’s competitive landscape.

“If you want to make money, you usually have to go against the trend,” Gershanik says. “Everyone wants to trade up their six- and eight-unit buildings for 30-unit properties, but I’m doing the opposite.”

From Digital Sales to Real Estate

Gershanik’s entry into real estate was unplanned. After studying at the University of Miami, he returned to Florida on an investor visa to start an online sales business. When that venture slowed, he used some capital to purchase a multifamily property, viewing it as a conservative, passive investment.

“I was told it was one of the safest, more conservative kinds of investments I could do passively while running another business,” he recalls. “What started as a side business ended up growing much more than my main focus.”

As his real estate holdings grew to 150-200 units, Gershanik decided to leave digital sales and concentrate fully on property management and acquisitions. At its peak, the portfolio reached about 900 units before strategic sales brought it to the current 680.

His focus has consistently been on providing housing for lower-income tenants, with around 40–50% of residents using Section 8 or similar programs. “We focus mostly on workforce housing,” he notes. “It’s usually the most stable type of project—not flashy, but Florida doesn’t have enough of it.”

Strategic Repositioning in a Competitive Market

Gershanik’s decision to sell stabilized assets and concentrate on smaller, more challenging properties was based on a clear assessment of market conditions. “Some of the projects had very nice returns already, but I could see that the curve of growth and return on investment would start diminishing if I kept them longer,” he explains.

Refinancing terms had become less favorable, and institutional competition was increasing. “Investment funds and institutional players are willing to pay more than I am. They need a lower return on capital and started outbidding us on opportunities.”

Instead of accepting lower returns or leaving the market, Gershanik identified an edge in targeting smaller properties. “We’re flexible enough to buy very small properties and try to farm an area, finding many small buildings within walking distance or a five-minute drive of each other.”

This strategy allows him to build operational scale without competing directly with institutional buyers. “If we go after a 50-unit property, we’re up against buyers willing to overpay. But when we buy 5, 6, 8, 12, or 20 units, those big players aren’t interested, and we’re stronger in capital and structure than most mom-and-pop owners.”

Hands-On Operations as a Competitive Edge

Gershanik’s willingness to take on challenging properties—including those that have suffered major damage—comes from his hands-on management style. “People don’t want headaches, but I don’t mind if that translates into income,” he says.

He manages daily operations directly, fielding hundreds of calls from tenants about maintenance issues. “That’s my typical day, and I don’t mind—it’s part of what I do.”

This approach has given him a cost advantage over smaller landlords who rely on outside help for every repair. “I compete with people who need to call a handyman each time the toilet breaks, so their operational costs are much higher than mine.”

Market Challenges and New Opportunities

Miami’s current market presents both hurdles and openings for workforce housing operators. Gershanik points to increased competition for tenants, driven by cuts to affordable housing programs and demographic changes.

“There are a lot of budget constraints in Section 8 programs—the budget is being cut compared to what it used to be. So there’s a lot more competition for tenants than there used to be,” he says.

Despite these headwinds, Gershanik believes broader trends validate his contrarian approach. Miami’s rise as a national destination has attracted capital from traditional gateway markets, pushing cap rates lower but creating opportunities for those willing to work in segments that institutional buyers avoid.

“Before, you’d say, ‘I’ll buy multifamily in New York or Miami,’ but to put money in Miami, I needed a higher cap rate. Now Miami is the place to be, so it makes sense that cap rates contract when the area is in the spotlight.”

Expanding Geographic Focus

Historically focused on Miami-Dade, Gershanik has expanded into Palm Beach County, drawn by what he sees as favorable local dynamics. “The distance between lower-income housing and wealthy housing is much closer than in areas like Miami,” he explains. “I believe the expansion of nicer areas will be faster in places like that.”

He points to significant development and population growth among affluent residents in Palm Beach. “I see universities coming, new projects, a lot of billionaires moving in. Even if my target tenants aren’t those people, they need employees, so there will be more demand for housing for my projects.”

Personal factors have also influenced Gershanik’s strategy. With two young children, he is prioritizing properties closer to home and focusing on quality over sheer growth. “I’m trying to be less of a workaholic than I used to be. I’m not looking to grow anymore—I’m looking for the right opportunities.”

Lessons for Small Operators

As Miami continues to attract large-scale capital and out-of-state investors, Gershanik’s approach offers a model for smaller operators looking to compete. By targeting segments that institutional buyers overlook and leveraging operational efficiency, smaller investors can still find opportunities even as the market becomes more crowded.

However, this strategy demands a willingness to manage greater operational complexity and stay actively involved in day-to-day management. Gershanik’s experience shows that for those willing to take on these challenges, the small multifamily segment can still offer attractive risk-adjusted returns in one of the country’s most dynamic real estate markets.

For investors interested in partnering with experienced operators in South Florida, Gershanik remains open to both general and limited partnership structures as he continues to build his portfolio of workforce housing assets in Miami-Dade and Palm Beach counties.