I buy houses and small multi-family properties in what would probably be considered C class areas. But I am doing it in a community of about 100,000 people. So the "rough" areas of this little city are nothing like some of the neighborhoods in the big cities where you would be afraid to walk around at night. We are making money and continuing to acquire properties. As a grow we will probably diversify into some nicer areas as well.
As you probably know, you can usually purchase houses for a lot less in C class areas. So there is potential for cash flow. But you probably need to account for extra maintenance and vacancy expenses. You will also need to be prepared to put a lot of time into management or finding a property manager who has some experience managing in these areas.
There are many investors on Bigger Pockets who invest in these areas. Up in the right-hand corner, search "low-income rentals" and see what comes up. Also read the Bigger Pockets Ultimate Beginners Guide to Real Estate Investing.
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