The laws of Supply and Demand really determine where you will get rich. The more people there are available to be your customers the more likely you can get rich. That is why a large proportion of rich people are located or do most of their business in the largest cities. The Internet has started to level the field in that it provides world wide access to large populations no matter where you live. However, for a person starting a business in a small town or buying real estate where the population is low this is no consolation. There are fewer customers in small towns or cities for your products or houses. Demand is low and potential for profit is low.
I watch a great deal of HGTV now and see lots of stories about how people make profits of $100k+ flipping houses (and selling them in days or weeks). Others just buy a house and in a few years reap over $100k in appreciation (and are often disgustingly disappointed because it wasn't $150k). This doesn't happen in Buffalo. There are few houses that sell for over $500k here and the demand for them is low. Most houses in this price range sit on the market for months or years. There is a house across the street that was for sale for $370k. It's a beautiful home of over 4000 sq ft in great shape. It was for sale for 2 years and now is off the market. I'm guessing the owner is going to let it go to the bank. So flipping a house here is a precarious venture. Long sales times and low profit margins can sink you. Plenty of supply and low demand.
One concept that is in demand here is a rent-to-own. Whenever I put up a RTO sign I get hundreds of calls. I can get higher than normal deposits and higher than normal rents and don't have to do maintenance on the properties.
One commenter on another post asked how I got into the same situation with real estate twice. The first time I had a dozen properties that were unrented and unrentable. I was literally paying people to occupy them so they would keep the heat on in the winter. Now I have all of my properties rented out (though I wanted to flip them) with a positive cash flow. Only one property has a negative cash flow and hopefully I will be able to rectify that soon. This is no where near my previous situation, just not what I had planned.
I don't think that I will get rich investing in real estate in Buffalo but it is possible since I have found a concept that has a high demand and few suppliers. This will be a slow process though since I have little cash to invest in more properties at the moment. I cannot use hard money lenders to buy properties since I cannot flip them quickly here and must wait on having conventional financing. Maybe an Internet business is the way to go from here but I haven't a clue what that would be.