For a bit of context, I’m a Los Angeles–based agent and investor, and I also work on small development and value-add projects locally.

Finally, if you are thinking of purchasing out of state, especially in Milwaukee you will need to develop a team(Boots on the ground).Many people want to jump out there without building proper foundation. 

@Ke Nan Wang - I would love more info on your development!  

Note he was not the developer; all he had to do for the value add is acquire a property exceptionally well suited for the ADU bonus density rules at a value based on current use comps and sell the same property for a different (or expanded) use.  

These often include ground-up development, major redevelopments, or distressed assets.Key characteristics:Development or heavy repositioningHigh capital requirementsMarket and execution riskCyclical exposureExamples:Ground-up mixed-use development in an emerging tech corridorDistressed hotel acquisition in a recovering marketOffice or retail conversion into multifamily housingWhy investors use opportunistic:These deals aim for outsized capital appreciation and are typically reserved for a smaller portion of the portfolio due to volatility and complexity.REITs & Private Equity Funds (Liquidity & Diversification)Beyond direct ownership, many investors allocate capital to REITs and private equity real estate funds.REITsPublicly tradedHigh liquidityProfessional managementRegular income distributionsExample:Shares in an industrial-focused public REITPrivate Equity Real Estate FundsPooled capitalOften focused on value-add or opportunistic dealsLonger lock-up periodsHigher return targetsExample:A private equity fund targeting value-add multifamily assetsWhy investors use them:These vehicles provide diversification, passive exposure, and professional management, complementing direct property ownership.Final ThoughtsA well-structured commercial real estate portfolio isn’t about chasing the highest returns—it’s about intentional capital allocation.By combining:Core for stabilityCore-plus for measured growthValue-add for forced appreciationOpportunistic for upsideREITs and funds for liquidity and diversification…investors can build portfolios that perform across market cycles while aligning with long-term goals.The most successful investors don’t avoid risk—they manage it strategically.

@Jose Blanco The "unicorn" loan requires the borrower to put down 50% + pay closing costs and your assignment fee.....also no sensible buyer is relying on the seller prepared appraisal when purchasing a $1.5M piece of real estate but pretty sure you will lose buyers at "Bass Pro Shop development expected to drive major tourism". 

When compared to markets like Los Angeles, Massachusetts offers a compelling alternative: LA multifamily development has sharply declined, with fewer than 19,000 units under construction—a 30% drop in just three years—despite high rents and low vacancy rates.Local policies, like Measure ULA, impose steep transfer taxes on sales over $5M, deterring lenders and developers.Proposed labor regulations, including minimum wage hikes for construction workers, are adding further uncertainty and risk.Many developers are redirecting projects and capital elsewhere, leaving fewer high-quality investment opportunities.  

Make at least 1 section of the property livable for yourself(some have ADU's, some don't)(You must decide the plan for development in the house- you can pad split, turn into a duplex, or keep the layout as is)4.

Carillon Parc development changes tabled, 2 other items from Southlake Dec. 2 meeting | Community Impact

Nothing like seeing water where it shouldn’t be to remind you that no matter how much homework you do, surprises happen.Another property developed a few leaks months into the rehab, and we eventually found out it needed brand new piping through the entire property...about $25k worth that hadn’t been accounted for in our evaluation.