7 years to 7 figure wealth question

[Michael Holland]

Hi All,

I was reading this article(http://www.biggerpockets.com/renewsblog/wp-content/uploads/2015/10/7-Years-to-7-Figure-Wealth.pdf) over the weekend and had a question. 

Within it, Brandon references "forced appreciation" of 10% within the first year of ownership for each new property purchase. I assume this means to do some renovations to the properties, right? If so, why is this not factored into costs at all? Wouldn't this significantly reduce the cashflow for year 1 for each property? And in turn lengthen the entire timeline? Or am I missing something?

What are some examples of renovations which would be most cost effective to get the numbers to work as suggested?

Thanks!

[Dylan W.]

Forced appreciation can be simple and doesn't have to include a capital expenditure. For example mowing and watering the lawn, painting and cleaning the place etc... It can also be as simple as raising the rent in a multifamily. It is anything that you can do to increase the market value of the property such as lowering the expenses or increasing the revenue that creates the increase in value. Hope that helps.