BRRRR - Increasing Property Value

[Evan Miller]

Hello all, 

Here goes my first post. 

I am currently looking for a small MF to house hack as my first property. I am looking for ways to force value into a prospective property in order for the refinance/HELOC part of BRRRR to be favorable.

Can anyone provide me with some insights they have for the best/most efficient ways to increase  property value? I appreciate your time in advance. 

I am a new investor located in the Cincinnati, OH area if you want to connect. Thank you and best wishes. 

[Andrew Syrios]

Quote from @Evan Miller:

Hello all, 

Here goes my first post. 

I am currently looking for a small MF to house hack as my first property. I am looking for ways to force value into a prospective property in order for the refinance/HELOC part of BRRRR to be favorable.

Can anyone provide me with some insights they have for the best/most efficient ways to increase  property value? I appreciate your time in advance. 

I am a new investor located in the Cincinnati, OH area if you want to connect. Thank you and best wishes. 

Generally the best way to force appreciation is to renovate the units and then increase the rents. Sometimes you can add an ADU or, in campus towns, add a bedroom (student rentals usually rent by the room). If the MF doesn't have separate utilities, separating them can reduce expenses and thereby increase value.

You could also consider using one or more units as a short term or mid term rental if city ordinances allow and it makes sense in that area. Or you could do co-living (kind of like w/student rentals) where you can get a rent premium. These strategies won't increase the property's value, but will definitely improve the rental income.

If it's a big lot, you may be able to subdivide a lot and sell or develop it. If it's in a flood zone but shouldn't be, you can actually challenge that and maybe get that flood zone designation removed which reduces expenses and thereby increases its value. So there are a lot of ways, but in general, renovating the units and increasing the rent is by far the most common.