- Out-of-town investors usually pay too much for properties. New York real estate is far more expensive than real estate in Harrisburg or other smaller cities. Being unfamiliar with Harrisburg, a New York investor will have little basis to compare prices when he is confronted with a seemingly "good deal" at a price far below what the market would bring in a larger city. Experience with the local market is the important factor - not necessarily "touching" or "seeing" the property as the narrator stated.
- I am guessing here, but I would bet that the second property in this film is so cheap because there is some title defect preventing its sale at market prices. The property has probably been through a tax sale at least once (the narrator made reference to a company that buys tax liens). Without spending the money necessary to resolve this title defect, the owner cannot get a loan to make needed repairs. Properties that come with a sale price of "$1,000" usually also come with another price - unknown attorney fees necessary to clean up title defects.
- Appraisals often mean nothing. The narrator mentioned an $82,000.00 appraisal for the house that was listed at $1,000.00. I haven't seen the appraisal, but I imagine that any such document relied on completely irrelevant comps and/or failed to account for the title defects.
When we see these issues out of the context of our own neighborhoods and properties, we can look at them with a more objective eye.