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Author: Mark Ainely | Partner GC Realty & Development & Co-Host Straight Up Chicago Investor Podcast
Gut rehabs get all the glory, but they come with hidden surprises, endless delays, and major stress. What if we told you that new construction—yes, from the ground up—is often simpler, more scalable, and more profitable?
This week’s Tuesday Tip flips the narrative. Architect and developer Prashanth Mahakali returns to share why new construction projects are the overlooked path to success for Chicago investors. Whether you're considering your first three-flat or ready to take on an eight-unit build, this episode will change how you think about development.
Why New Construction Is the Move for Chicago Investors
If you’ve been putting off a project because rehab seems more “accessible,” this tip is for you.
Prashanth breaks down:
Why rehabs are actually harder than new builds
Where to find infill lots and untapped double lots in Chicago
How to de-risk your first project by partnering with the right people
What zoning, variance, and permitting details to watch out for
Why banks are often more willing to fund new construction than gut jobs
“The amount of brain damage that comes with a heavy rehab? It’s just not worth it. New construction gives you more control, better rents, and easier scaling.” — Mark Ainley
If you want to scale your portfolio, build equity fast, or create a process you can repeat again and again—this is your roadmap.
Questions We Answer in This Episode
Q: What makes new construction easier than heavy rehabs?
A: With new builds, you eliminate guesswork. There are no surprises in the walls, fewer delays, and you can create repeatable systems after your first project.
Q: Where should investors look for land in Chicago?
A: Focus on neighborhoods just outside hot zones. Woodlawn, Bronzeville, and parts of South Shore still offer opportunity—especially when there are multiple lots on one street.
Q: How can investors find “hidden” opportunities for development?
A: Look for owners sitting on double lots or oversized parcels. Many don’t realize they’re sitting on buildable land. Partnering with them could reduce acquisition costs significantly.
Q: What zoning considerations matter most?
A: R5 zoning allows for much higher density than R3. Understanding this before purchasing is critical, especially if you're planning multi-unit development.
Q: How do I reduce risk on my first build?
A: Partner with someone who brings value—whether it’s money, construction experience, or access to land. And always get your architectural and legal guidance early.
Show Notes
00:00 – Prashanth returns for another Tuesday Tip
01:10 – Why new construction beats heavy gut rehabs
03:25 – Common myths about who can build in Chicago
06:15 – Finding land: tips on walking neighborhoods and spotting clusters
09:35 – How repeatable systems make new builds easier over time
13:10 – Navigating excavation and risk to neighboring foundations
15:45 – Zoning 101: the R3 vs R5 difference and bonus tips
19:00 – Real example of pairing a double-lot owner with a developer
22:20 – How frame construction is transforming South Side infill
25:05 – Why banks like lending on new construction
28:00 – What to look for near major developments (e.g., hospitals, United Center)
30:15 – The potential (and limits) of building near the Obama Library
33:30 – Wrapping up: why new construction should be your next move
Takeaways for Chicago Property Managers and Landlords
Stop underestimating new construction. It might be your most efficient, scalable option.
Rehabs are not easier. They’re often more chaotic and costlier than new builds.
Zoning is your best friend or worst enemy. Know it cold.
Look for hidden land. Double lots and “invisible” buildable parcels offer huge opportunities.
Don’t go solo. Find the right partner and build a repeatable system.
Guest Name: Prashanth Mahakali
Company: PMPC Architects
Sponsor: This Tuesday Tip was brought to you by PMPC Architects. Thank you to Prashanth and team!
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Dear Investor,
If you are an investor in either the city or suburbs of Chicago, I would love to speak with you about how we can help you on your real estate journey. At GC Realty & Development LLC, we help hundreds of Chicagoland real estate owners and brokers each year manage their assets with both full service property management and tenant placement services.
We understand that every investor’s goals are unique, and we love learning about each client’s individual needs. If there is an opportunity to help you buy back your time by managing your rental property or finding quality tenants, please check us out.
Best Investing,
Founder, Partner, Podcast Co-Host, and Investor
