There is lots of potential in buying to rehab. I think 4 of the properties I have purchased would qualify as condemned but all have needed a good deal of work to make livable. You just need to have all your numbers in order ahead of time. Each house and location has its own set of circumstances so it is hard to just generalize. If the cost to buy and fix is not justifiable as a rental, it must be flipped, and you need to make sure there is a substatial margin built in becaues this buffer can quickly vanish. If you plan to keep as a rental, another set of rules apply and depending on your cash reserve, borrowing potential etc you need to plan ahead. We usually buy a rental on equity from another property, knowing the price to buy, carry, fix etc will only be 80% of what it is likely to appraise for. That way we can refinance, get the equity freed up to buy the next one. Never get too anxious to get buy a one as you can easily make a poor decision. I helped such an investor sell a few years ago when the market was good and he still lost 40K.