I have noticed an interesting trend that's been more and more common since about 2018. Buildings selling for example $300,000 which need $150,000 of work but the ARV is only $420,000. Maybe people buying and not fixing up who just want a multi unit at lower price point? It's a weird strategy I never would partake in. I have done two BRRRs and am still a huge fan of the value adds (working on a 3rd deal flipping it right now) but would say since covid 95%+ of value add deals do not work for any equity creation even the bs wholesalers send out. We have seen deals with strong equity numbers but they are in junk areas with bad tenant pool. This is with my contractor contacts who I refer out a lot and work below what retail pays.

Where I have had luck and seen many of my clients making it work is on bigger 3/4 units in class A/B areas where ARV goes to 800k-1.1 million, as provides a big enough margin. Duplexing is also a value add we have seen work for equity creation. For example you finish the attic and add a 3rd bedroom or you take the already there illegal attic or basement unit which are common in Chicago and connect it to the legal unit for extra living space so now you have 3/2 duplex rents on what used to be a 2/1 simplex. These 3/2 duplex units on northside are passing $3000 monthly rents now too so cashflows. Also seen many of the duplex units with old tenants at for example $1800-2000 where you update it a little and bump it a whole 20-30%+. Seems many old sellers don't understand how high of rents a duplex up can get in 2024.