Phoenix contains a rare combination of elements that have created an outstanding market for distressed property investments, including the following:Cost Savings: Distressed properties are sold below their market value and enable investors to take hold of properties at a trifle compared to traditionally listed properties.Strong Market Fundamentals: Being among the fastest-growing cities in the country, Phoenix ensures a high demand in housing and rentals, hence good potential for resale or income from rentals.Value Creation Opportunities: Most distressed properties need renovations; thus, such situations present opportunities for investors to increase equity by adding value.Population and Economic Growth: Phoenix remains among those cities in the country which are attracting more and more residents and business; therefore, this presents good, long-term appreciation possibilities of property appreciation and income creation.Challenges to ConsiderWhile the rewards can be great, distressed property investment is not without its challenges.

Gross rental income divided by 2 (50% op ex ratio) equals net operating income. 

Use umbrella insurance as an additional safeguard, especially if you opt not to form an LLC.Avoid S-Corp taxation for rentals, as rental income is passive and not subject to self-employment tax.

Could you go reinvest it in another property to build even more income?

It can still qualify if it's a fixer-upper, as long as the rental income from the property can cover the debt service.

I would define a wealthy person in America as $300,000+ annual income and at least $3 million net worth.

Northern NJ is not the best place for retirement but it is a great place to raise a family due to the great schools and for those needing easy access to NYC.

Sadly, there are quite a few people over 65 on the verge of losing all their retirement money they put into these guy's investments that are doing terribly while they both go start new ones.

The goal here would be to increase rental income.

-------------------------------------------------------------------Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?