You should be looking to buy properties in up-and-coming neighborhoods, what Torres calls the "sweet spot" between the fancy areas and the fringe.
To find that sweet spot, you have to do your homework.
Spend plenty of time driving around various neighborhoods and look for telling signs, Torres tells CNBC Make It: "When I'm looking through neighborhoods, the first thing I look for is, is it clean? Is there litter all over the ground? Are there tree branches that are laying around? Are they trimming the trees? Are the neighbors cutting their grass? ... Are the streets paved? Are there a lot of potholes?"
The way the city takes care of the neighborhood can be a good indicator of whether or not the area is on the up-and-up, he says: "If a city is not taking care of the potholes and they're not trimming the neutral ground, that means that they don't think this neighborhood is that great. But when you have an area where it's all manicured, the litter is picked up — that shows that the city is investing money in this area because they believe in it. They see it coming up."
You may come across a neighborhood that has a mixture of positive and negative signs. Maybe the streets are well paved, but there is noticeable litter on the ground. "In those situations, I drive the entire neighborhood and I drive outside the neighborhood, " says Torres. "That way I get a feel for, is it closing in? Is the value starting to bump up as it's closing in?"
Once you've pinpointed the neighborhood you want to invest in, make sure you visit it in the morning, the middle of the day and at night, says Torres: "Before I buy anything, whether I'm building a resort or I'm just looking to develop a small shotgun house, for me, it's really important to see the sun rise and the sun set."
After all, the neighborhood could have a completely different feel at night: "Are there really big street lights that create this light pollution that creates a weird feel for the house in the neighborhood? Is there suspicious activity in the evening that you might run across that you don't see during the day?" he asks.
"It doesn't hurt to spend 48 to 72 hours there before you actually commit to buying it."
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