I am working with folks in the Scottsdale area who purchase properties around the $800k-900k range (5+ bedrooms with large lots) and remodeling to be purpose-built short-term rentals.

But I believe this is an up and coming area - my home is one of the first tear-down-rebuilds in the area, with more remodels / tear-down-rebuilds in the works (there are a handful of remodels in the neighborhood).

But over a long enough investing period the numbers should more or less balance themselves out and become fairly reliable.As Bruce pointed out, the alternative is to buy and remodel a piece of crap house. 

I completely remodeled the inside and outside of the home.

Purchase price: $309,000 Cash invested: $30,000 Sale price: $454,000 Full live in remodel including out buildings and dock - Built a hobby farm/hosting business too.

It required a full gut remodel, layout changes, and probably a second story addition.

At this time remodels are not in the cards but i have looked at possibilities for the future.

During that process, I am seeing some appreciation in the property but it's because I remodeled a lot of it.

Estimating construction and remodeling has been around a long time, people who do this are called estimators.There's books, software and even courses on estimating.

Purchase price: $240,000 Cash invested: $200,000 Remodeled the house, all doors 3ft wide, added a wheelchair friendly bathroom and shower.