Cap rates in the local market barely reach above 4%. 

@Wayne Brooks  and or for tax reasons.but I would wonder is it not financially feasible or just not something this guy wants to do.if it has market value buy it and resell it.. if its in an area like many markets were bare lots have zero or negative value since existing inventory can be bought for less than replacement cost then.. its a tough one if they are adding value to the price of the home.out our way extra lots are GOLD and highly sought after.

A lot of the investment properties deal is at a break even, negative or barely at the $100 ish cash flow per month so for a $100k-$230k investment not worth it IMO. 

I grew up in Altamonte Springs ('87-04)  and saw it go from a rural town to what it is today, sort of a haphazard mix of nice residential, not so nice residential, run down commercial with pockets of freshly built/rehabbed commercial, low income apartments-turned condos before the crash-turned foreclosure havens that are barely recovering.... 

They want $250 EACHWith the high prices in California some of my properties barely cash flow. 

With old houses, things break fairly regularly so if you don't have a good local team to fix things, you will either frequently overpay for repairs or get bare minimum fixes that don't last very long. 

His overall cash flow, meaning his cost of living declined while those of us investing in the appreciating areas where we lived increased our cash flow tremendously.Essentially, his rent increased in NYC while his cash flow for the investment properties outside NYC remained the same.So the overall effects is a decrease in net cash flow.I'm not sure why Investors don't realize that this is a phenomenon that can easily happens and I know it does from that particular friend.For the most part, the other thing that happened with those that did not either invest in the appreciating areas and also did not buy their homes either have become forever priced out.Even if they can barely afford the home in the appreciating area today, they will say it's just way too expensive.

I would turn the bathroom sideways in the corner , get rid of the mud room and utilize all that space for a bigger kitchen (if those aren’t load baring walls)

Also, I'm working with my investor buddies in San Diego that do LOs through Little Pink Houses of America. 

But, if I’m being honest from personal experience the tenant is renting to not have to take care of anything outside of the home and they will either neglect or do the bare minimum to the lawn.