Knowledgable operators will underwrite deals and pick only the ones they believe they can achieve close to the 2x EM or above at a 5yr mark. These deals generally DO require a good amount of work or elbow grease to make that happen. The returns are meaningless without documentation and business plan to corroborate the projected return. You have to do your own due diligence to determine if you think the sponsors will be able to come through with their plan or if it is far-fetched.
Different asset classes can do different things. Some may be great options for base annual cashflow. The faster way to accelerate the appreciation is always a value-add type of play. Even if you buy a hotel you want to increase your room rates by maybe converting to a more upscale brand, etc.
Otherwise, look at the investment from a perspective of the basic annual cashflow and then determine if you would be able to gain any significant benefit from the depreciation or other tax benefits of the investment (speak to your CPA on that matter).
Are you looking for wealth generation or wealth preservation?
