I try to get an actual case history in every issue. In order for me to write about a deal in Real Estate Investor's Monthly, it must pass at least one of three tests:
Cap rate is short for capitalization rate. It is the net operating income of the property divided by its purchase price. Net operating income is the gross income minus all operating expenses, but before deductions for mortgage payments. Another way to put it is that it is the cash-on-cash rate of return you would get if you owned the property free and clear. The typical real estate investment purchase by a not-very-enlightened investor has a cap rate in the 5% to 8% range. You should not settle for less than 10%. But 10% is tough to get. That's why you subscribe to a newsletter like mine or read my books.
Inexperienced investors think discounts as small as 5% are great. They are not. You need at least 20% in order to resell the property the day after you bought it and make a profit. Lesser discounts will be consumed by transaction costs and carrying costs.
Changes that release unrealized potential go far beyond renovation. You can also improve zoning, get rent control removed, eliminate title problems, and so forth.
I am always on the lookout for actual case histories of deals that meet Real Estate Investor's Monthly standards. If you have one, I would appreciate hearing about it. If you wish, I can disguise your identity and the location of the property in any article I write about it. Although my readers and I prefer the real details. Here's a form you can use to tell me about your deal.