I'm still searching for my first deal, being picky in the process. I'm ideally looking for a somewhat dumpy multi-family home that can be fixed up and rented. Most of these homes are in somewhat questionable neighborhoods, but I don't really see that as a big deal, as long as the neighborhood appears to be in an upswing.

For example, I saw a duplex on the MLS in Durham that was selling for $30,000. I could put down 25% easy, and cashflow all day long. It looked to be in good shape from the pictures, and I drove out to see it. When I got there, I found a house that looked to be in good shape, but everything else around it was in shambles. The neighboring properties didn't have grass, and there were a few trucks up on blocks in the street. There were a bunch of children playing in the street, which I take as a good sign, but I ended up passing on it because the surrounding area just seemed so run down.

A couple days later, I'm wondering if I made a mistake. I didn't see anybody with conspicuous bandannas on their biceps or hanging out of back pockets, and the trucks on blocks both had ladder racks on them, meaning they were probably employed by somebody.

I probably missed this property, but in the future, what should I look for to indicate that a transitional property is transitioning the right way? Are there any signs that you look for to give you a warm fuzzy about buying in a mediocre neighborhood?