Value-add investing targets properties with unrealized potential that can be unlocked through strategic improvements. This might include physical renovations (updating kitchens, bathrooms, or common areas), operational improvements (reducing expenses, implementing better management), or repositioning (changing tenant mix, adding amenities, or converting use). Value-add deals offer higher returns than stabilized properties because the investor is compensated for taking on execution risk. The key to success is accurately estimating improvement costs, projecting realistic post-renovation rents, and executing renovations on time and on budget. This strategy is the engine behind the BRRRR method and most syndication business plans.