Where to buy $12,000 houses?

[Mike McKinzie]

I have seen other investors post that they have bought $12,000 houses that they rent for $600 a month. This sounds too good to be true. Where are houses like this? How much rehab work is needed? The rent completely pays for the house in 20 months?! The areas I invest in, you couldn't get a 60X100 lot for $12,000. The rental houses I own, I couldn't install a wooden deck for that price. A completely stripped out, 1200 square foot house that is 50 years old would still sell for 50K to 100K in So Cal.

So is there a niche out there that I am unaware of?