Any opportunities for low-cost lots in a modest rent area?

[Michael Roetzel]

Hello all,

I own 2 properties in a working class neighborhood. One house (900ft2) is $500/month, and I'll be asking $750/month for a 1250 ft2 when the rehab is finished. 

Homes in this neighborhood are mostly early 20th century, of modest size, and many not well maintained. $35-50k will buy you a rehab project, ones in better condition will go from $70-$90k.

There are now 2 abandoned properties on my street, adjoining each other. One house has been abandoned for some time. It was purchased as an investment/rehab project, but there was a personal tragedy, and now it's just waiting to be auctioned off by the state. The house next door to it recently had a housefire, and the building is all but destroyed.

These two lots and houses could be purchased and cleared for not a lot of outlay. But then what? Is there get an inhabitable structure on these lots which would turn a profit given the modest rents?