@Henry Tse, I'd say generally to focus on the peripheral sides of Austin - East or South.

There are LOTS of ways to make money in the real estate world...and there are lots of ways to help people by putting a roof over their head, by helping them sell an undesirable property or a burdensome property; by improving property; by loaning money; by partnering on projects; the list is very long.

I really don't see why you are telling me that Manila was a "undesirable" area 10 years ago.

If the returns are so good then why are they so undesirable to the market. 

The only factor that I should clarify is that I would use cash on hand to add that additional bedroom (and remove an undesirable tenant), which I hope would add something to that valuation — I've read the 11% range is not unreasonable (*please comment on this, anyone who's done this before).

If there's an undesirable lot or funky house they can't move, they'll negotiate on it much easier than an owner occupant who has an unrealistic expectation and can't afford to discount.

If this area is less desirable, you will need to use comps only in the same undesirable area.

Well, the third bedroom in the basement may not be a “functional obsolescence” but in most cases it will be a “functional undesirable feature”.....it’s not going be viewed the same all bedrooms on the main floor.  

If you're looking for cheap properties your looking at some extensive rehabs in some undesirable areas.

My favorite statement is that a great operator will take an assisted living community that is undesirable in many other aspects, and make it successful.