To bounce a few of these questions and dig a little deeper, let me respond to some of this:
Being handy: Yes, but this isn't a huge problem. A lot of houses, especially when people aren't selling, but being forced out by the bank, don't really NEED much work. Most people take decent care of their houses, despite what you might see on HGTV.
"No one walks away from 100k"? If they are upside-down, as you put it, many people have no choice. My plan is to move back to the Detroit area and start my business there. A large number of people are being laid off in the area, and lots of people are losing their houses. However, people DO still purchase homes. If I have to sit on a house for a few months and take the capital gains hit, it's not ideal, but it's still profitable.
Planning/simple: If it was simple, I wouldn't be interested. If it was simple, EVERYONE would do it. I'm happy to put in the work I need to, both labor-wise and footwork. I have a few contacts in RE and more than a few friends in labor (roofers, painters, carpenters, concrete guys).
"It's a popular practice here to buy large lots with older homes, tear down the homes and build one, two, sometimes 3 new ones, rather than fix them up for a turn-around.": That sounds like SE Michigan. It might be tough to get in front of the developers, but they don't get EVERY property out there. They are, however, almost ALWAYS willing to buy it from you.
guccilvr: Not sure what you mean by formula, but assuming we're on the same page, I have explicit ideas about my margins, buy-in maximums and percentages for contracting and other "fix up" items needed. I'm also looking in rather specific areas (i.e.- some cities and not others) where people are more likely to move in and less likely to move out.
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