how to know if property is good candidate for forced appreciation

[Account Closed]

Hi all, i was wondering what you look for when deciding if a property will be a good candidate for forced apprectiation? obviously, things that will allow you to increase the rent or lower expenses, or both.

i'm still fairly new to this game...for me i look at:

1) can i subdivide a unit or renovate a basement (basically turn it into a triplex from duplex, quad from triplex, etc.)

2) can i reduce utilities or pass utilities on to tenant?

3) can i raise rents substantially (property currently renting below market)

4) can i perform some minor renovations (new floor, bathroom, etc.) that will allow me to raise rents?

what are your favorite techniques for forced appreciation, and what do you look for when walking through a building to know if its a good candidate?

thanks

[Account Closed]

@Russell Butler

For single family/ suited/ triplex etc look for the fabulous area, likely some infills, money/ investment going into the area. Then buy the ugliest one on that block. Look for a historical max sale price well above your purchase + improvements all in number. Example: you’re buying at 320 and the house hasn’t seen a single dollar of renovations since 1970 with a high sale price within ~2 blocks (this depends on area specifics like parks railroads etc) of 500+ of a similar sq ft/ age home. If you can renovate this for 80-100 and make it substantially similar you may very well have a winner. When starting out leave a LOT of room for error.

Basically, when starting out keep it simple, don’t move walls, try to avoid deep plumbing and electrical work, try to avoid new windows (@ $1k/ hole you won’t get more than a $600/ return) find the ugly and get rid of the ugly. No difference between replacing flooring from 1972 that look awful and replacing flooring from 2005 that just isn’t good enough, it’s still just $/ sq ft. Lots of tips and tricks for adding value like stick to one piece of bling/ wow per room (bedrooms should usually be a nice light or pleasing feature wall).

Pay attention to overall square footage of both the building and the lot, you’ll have a hard time setting an area record price when you’re on a lot that is 30% smaller than the current record.