To find a property and add value, look for properties which need repair or which do not offer features which are now popular. You can add
Covered parking
Additional storage
Make it pet friendly, such as covered dog runs.
Make it gated and locked or add fencing
Resize windows to add light
Add accent lighting behind ceiling crown molding
Add sky lights.
Install wi-fi door locks
Add outside lockboxes for deliveries
Add outdoor wi-fi internet real time video
There are many features to add value which do not require repairs. They are add on features.
As the city changes and properties get older, buildings can become functionally or economically obsolete. This can create an opportunity to add value to a property.
You can also RE-purpose the use. As an example, you can find a multifamily property on a loud freeway which makes it hard to sleep and get high rent. Change it to a commercial use such as retail or office space. But leave the bathtubs, otherwise the city inspector will require changing all wiring from residential to commercial specs. Just put a bookcase on top of the bathtub after the inspector leaves. Actually, some business tenants travel long distance to work and prefer a shower onsite, instead of traveling home before their next appointment.
I know of a 6 plex multifamily apartment property on the 610 Loop South. Too loud for tenants to sleep. Consider converting to white collar offices with signage for an insurance agent or a law office or an accountant. I want to buy the land next to it for additional parking. Again …. Leave the bathtub and put a bookshelf on top.
Yes …. To repurpose the function of a building can cost some money, so carefully analyze your forecast spreadsheet.
You may need to hire an architect who knows current building codes and who knows how to get city occupancy permits and who understand the American Disability Act.
I read recently that an office building was converted to self-service storage units.
With the advent of Amazon, retailers using overnight delivery distribution. Some retailers are wanting space for storage and packing areas. Thus we can look for a retail strip center or office building with land behind or adjacent to the rental unit. We can add storage space such as shipping units or modular storage space and add lights and insulation with AC.
A retail strip center had land in back to add a storage ship contain to the back door. Thus retail store now had a warehouse room for inventory to service their online sales efforts.
You can find multitenant warehouses and add a nice retail showroom in front with decorative ceramic floors and recessed and pin-spot gallery lighting
Some seminar gurus say that to find a good deal….
Do not use the MLS to avoid seller having to pay real estate commissions.
Send hundreds or thousands of postcards to owners and find motivated sellers.
Convince owners to sell below market value to get a quick cash closing.
Seller wanting a quick cash sale can avoid paying for repairs.
I note that you will need to drive by to look at hundreds of properties and meet with many hungry owners.
A client recently purchased a four plex on a busy street (thus hard to tenants to sleep) and converted to white collar high end offices. She kept the bathtub to avoid having to replace ALL the residential electrical wiring with commercial wiring.
She put a bookshelf on top of the bathtubs.
After you remodel and get stable higher rents, you can refinance and get your cash out or sell for a 1031 tax deferred exchange, if you own it for one year.
We can learn from new concepts such as We-Works, a communal office small business center. Co-Living centers have sprouted in several major cities. Sorta like high end dorms for adults wanting urban living with friends.
There are several projects to convert warehouse to business incubators. The Texas Medical center has converted a building to an entrepreneurial development center for medical technology companies.
It may be possible to convert an old stadium or large warehouse to a flying drone raceway.
Several cities have eSports stadiums with giant screens to show the team high tech battlefield and seating for spectators, who may also have laptops. Know that the largest events in the world, the ten largest are all eSports events. Larger than the NBA and NFL combined. When Microsoft introduces X-cloud it may explode again. X-Cloud will allow players to play without a special lever console like xBox. Player will be able to play and have virtual battlefields on every device, even mobile phones.
Know that Fertitta, the owner of the Houston Rockets, purchased the Houston franchise rights to play “OverWatch” for $12 million. Dallas has an eSports Stadium.
Convert your Bar and restaurant to charge for tickets to their weekend eSports qualifiying tournaments. The building can be remodeled and designed for the events.
You can also convert a warehouse for eSport events or indoor drone races. Add a burger restaurant. (you could start with a food truck)
Convert a large warehouse to a farmers market with good lighting or flea market or antique market with spaces rented to dealers. Be sure to have good parking.
I saw a warehouse that has a big room to walk and train your pedigree dog by walking in a circle around the room. They charge money by the session.
There are several food truck courts in Houston.
Point is …. There are numerous ways to add value. Go drive by and look for problems. Do not buy a property that only needs carpet and paint. We are sometimes told to update kitchens and bathrooms. These are just cosmetic challenges. You could add modern features. However, know that there are thousands of home buyers wanting to fix cosmetic issues.
Hundreds of Home flippers want to buy homes with easy fix and they do not have creative vision. These buyers compete to make prices high on fixer upper homes. They do not have the experience nor the vision to find the better opportunities.
More importantly, I suggest there are various types of current properties with economic and functional problems which can be improved by changing purpose and type of property.