In a way, yes, and it’s in distressed properties – foreclosures.

First and foremost you will need to either qualify for a loan under the new stricter standards or have the cash to buy out-right.

Look for a foreclosure property that is a fixer-upper in a great area! You will have the potential for big profits if you advertise it properly. Here are seven areas to look at that will net you the biggest profits when it’s time to sell.

1. The homes are in a well-established neighborhood. You should look for older homes that are clean and obviously well-kept by their owners.

2. The neighborhood is clean. The age of the neighborhood doesn’t matter as long as it sparkles. You won’t see trash in the streets, unkempt yards or other signs of neglect in these neighborhoods.

3. The neighborhood is aging – in a good way. If a neighborhood is well maintained, it will age well. Look for tall, full trees as one sign of neighborhoods that are aging gracefully. You can also research the houses in the neighborhood to find out which ones have changed owners at least once already.

4. The neighborhood shows signs of continual improvement. Look for signs that people have improved their homes: add-ons like decks or sun rooms, additions, extensive landscaping, or new siding or other improvements to appearance.

5. There are things to do close by. Stores are easy to get to and are nearby, and a variety of important amenities are available. Make sure that shopping complexes and other facilities also look well maintained, safe and welcoming.

6. The property doesn’t need major work. If the improvements to the home are mostly minor and/or cosmetic and would serve as upgrades rather than full-on rehabilitation, go for it. A general rule is that fix-up costs should be within 5-10% of the purchase price.

7. The structure is sound. A solid foundation is essential for any new relationship – especially the one buyers have with their new home. Make sure there are no major structural problems like damaged foundations, masonry, signs of sagging or problematic settlement.

To be a wise foreclosure investor, you’ll have to do some research and leg-work to find which properties are the slam dunks, with tons of potential and which ones are the money pits. Remember to always use good common sense when investing in a foreclosure. With a little effort and elbow grease you will be seeing the green fruits of your labor before you know it.

Marcus Ettinger DC, BS