Some investors are looking at emerging markets and smaller cities for cheaper entry points and better cash flow.

I recently had an estimate of $20,000 to create a basement egress window and I put my foot down and told my GC that I was going to rent the excavator, and we found much cheaper supplies, and were doing the project ourselves.

It is not too expensive and it is cheaper for guest to book direct and you make more.

Also with inflation you pay with cheaper dollars.7.  

Apparently they should be brick pointing with lime mortar, but instead, they said the city will just plaster over the historical materials (original brick and lime mortar) with Portland cement because it's cheaper, faster and easier than working with more delicate, temperature sensitive lime mortar. 

Allowing you to borrow money at a cheaper cost.

For something like an ADU it's surely going to be cost prohibitive.If you want to buy a cheaper property with your 1031 that has the ability to put an ADU on the lot. 

Smaller properties are cheaper to update or can use higher quality materials.

Im not a flipper but I've done a few projects that required short term loans and have found that private money is:  1. cheaper, 2. more flexible, 3. excited to be part of the journeyPeople would rather pay a stranger who would happily foreclose on you 10-14% but hesitate to ask their own Aunt if she would want to make invest at 9%. 

On the other hand, if you find a supply vs demand imbalance in a cheaper market, prices and rents can rise unhindered.