The value of housing nationwide took a dive in 2008 when countless homeowners lost their jobs or couldn't pay the ballooned interest costs on their adjustable-rate mortgages, which led to a multitude of foreclosed homes and a lending crisis that reverberated throughout the banking and housing industries. Lenders began to sell repossessed homes below market value just to recoup some of their losses.

This creates a splendid opportunity for you to purchase one of these duplexes or homes — if you've got some money in the bank for a down payment, good credit and wage history, and can find one of these distressed properties. (For more about getting a mortgage or a home-improvement loan, see Chapter 4.)

The basic rules for buying a starter home remain the same. You want to find a low-priced building in a good neighborhood or a neighborhood that's on its way up. Avoid properties needing extensive repairs unless you can do all the work yourself — especially now when the cost of labor and materials has gone up with inflation — and have an inside track for getting good discounts on materials.

You want property that will appreciate after you've fixed it up so that you can sell it at a profit later. As mentioned previously, be careful to judge the neighborhood carefully. If houses are abandoned, boarded up, or decaying through lack of care, and if yards are littered with junk, it tells you that no one is willing to invest in the area. So even if you get your building into tiptop shape, you'll have difficulty finding a buyer, let alone a good tenant.