I like the huge tax advantages and passive income, BUT, even though you are drilling in areas where oil has been found it still seems like a huge gamble to come up with nothing.

It'll either confirm you've chosen the right niche or it'll let you know early on you need to look at something else.

Here are my questions:1) Once I've chosen an "ugly" house neighborhood and a realtor, should I test the waters by putting offers out on every house for sale in that neighborhood (assuming it's not brand new), or is the idea to pick and choose based on the listing comments sounding like it's either bankowned or a rehab project?

That I could quantify the value of paying a little more early in the gentrification stages, that property went up in value over 100K the first 18 months of possession.What's going on in this area of Indy I can't seem to quantify it other than some people are buying $40k - $80K properties, tearing them down and building new, some are doing gut rehabs with a change in floor plans, and some are buying the $60k-$90k property putting $30k into it and renting it out in hopes of the spike.When I see the land for these lots are valued at $4,000 - $6,000 depending on lot size, that's a big gamble to teardown and scale that $40k - $80k property purchase to the $250k - $300k properties that are being sold on some of these deals.

Gambling on appreciation is just that, gambling. 

@Eric Carr I think it's the property holding pattern while gambling on the hopes of that long-term equity growth is the problem for many people. 

I am curious on ways investors have chosen to structure deals with private money in order to pay them back.

Hello,I have chosen to invest in Milwaukee, Wisconsin area, and I am not surprised that the rental was broken into.

You make the money when you buy, not sale the car; similar to when you choose the tenant out of several applications, your good tenants must be screened when they come to view the property.Regardless, it can be a gamble sometimes.Best of luck!

Finding any strategy to deal with increased interest rates, other than paying less money for properties, is in essence a gamble that interest rates will soon come down.