Don't Follow the Herd and Maybe You Can Also Double your investment in 3 Years

[Sheryl Sitman]

Our strategy is not based on what everyone else is doing. It is based on the resources we have, our personal life situation (which evolves with time) and the opportunities that exist. In 2020, we purchased a property in Lower Bucks County Pennsylvania in what we identified as a solid, growth area with good potential for appreciation and ROI. It was located in a seventy year old group of neighborhoods that we believed to be at the cusp of change and within a 40 min drive from our home.

Purchase price: $157k

Property Condition: The owner who lived in the property knew just enough to do a lot of shoddy work on the house himself and we figured there would be some surprises during our rehab, Three years later there is still the occasional surprise, like the upper kitchen cabinet that came crashing off the wall because it was not connected to a stud. It was also the first investment where we discovered termites and termite damage while renovating. Then there was the city inspector who told us that the electric panel needed to be brought up to code and after concluding that the roof was likely to be a potential cause of problems, we decided to replace it and avoid future issues.  Let's say that it was not the typical property other investors were rushing to buy at the time so competition was light.

Total investment: $190k

Results: By this summer, we can conclude this was a standout winner.

Rent: The property has been fully occupied since the rehab was complete and current rent is $2,100.

Appreciation: On the same block, a few houses away an exact comp was sold for $339k. This all happened within in three years.

This is the stuff you do not learn in courses for the masses. 

[Scott E.]

Congrats on a solid deal. To add ~$140k in value in 3 years at this point is a job well done.

Don't take this the wrong way though but I have to call it out based on the title of this thread and your first sentence. What you're describing is following the herd. And there's nothing wrong with that. 

This is probably the most common, tried in true strategy in real estate. Buy a property in a good location, add value through renovations, and either rent it or sell it when you're done.