I think it's a great strategy for experienced well capitalized investors, but many new investors with limited capital should tread lightly.

Walls Remove/treat mildew (per surface) $15.00 Repair hole in wall $55.00 Repaint (per wall/ceiling) $40.00 Doors Replace door (interior) $165.00 Replace door (exterior) $485.00 Replace weather stripping $25.00 Electrical Replace light bulb $3.00 Replace light fixture globe $20.00 Replace light fixture $65.00 Replace electrical outlet/switch $15.00 Replace electrical cover plate $2.00 Actual charges may vary based on condition, vendor and/or cost of materials.

I am looking at an occupied multifamily in "downtown" Urbana that after some light work should hit the 2% rule.

Cashflow is just what keeps the lights on, while you get there.Cost per unit seems very cheap to me, which makes me question the neighborhood and the tenants.

E.g. faucet repair, light bulb, HVAC filter. 

If the returns are looking better then that, then as Walter White said, "then maybe your best course would be to tread lightly." :)

Color me skeptical…

@Wei Cho is an expert in this and perhaps could shed some light on the first question.With regards to the market value it depends because the appraiser has to substantiate the value add as determined by comps that have recently sold with visable ADU's as well.

Doing some light research it looked like the TK properties I could afford with my current cash and conventional funding would only cash flow a few hundred dollars a month while consuming all my cash and purchasing power.

Hi Michael,Thanks for those colorful tips.