Thesis driven real estate investment strategies

[Levi Brackman]

I know several different methods to investing in real estate, such as Fix and Flipping and the BRRRR method. Many of these are driven by COC returns and yield.

But does anyone have a thesis-driven approach? Such an approach may say, for example, that properties in the Chicago area are depressed in price and are bound to go up in value and would therefore be a good investment. Or that properties in rural areas within driving distance of a major airport may be less expensive currently but are likely to rise in value and therefore be a good investment?

Is there anyone with such a thesis that they can share?

[Evan Polaski]

@Levi Brackman, in my view, you are confusing financial returns of an investment as being the thesis.

Flipping and BRRRR both follow the same thesis: a property in disrepair within a proven market can be improved and increase the value. The measure of that thesis is CoC or yield.

Put another way: let's say your proposed thesis of "Chicago area properties are depressed and going to rise in value" is your guidepost.  How are you measuring that thesis?  Your thesis may be right but without a measure, and comparison metrics, you have no way of knowing whether you are correct.

And then, at the end of the day, real estate is an investment vehicle. Investments, by definition, are financially driven with every investors goal to maximize return given a specific risk tolerance. While risk is much harder to assess quantitatively, return can be very easily measured in several ways, hence the focus on CoC, yield, ROI, ROE, IRR, Equity multiple, etc.