I think I will mostly invest in areas within driving distance. Does not matter where you live.
I lived in Columbus, Philadelphia, north New Jersey, Boston and sf Bay Area. I think there are opportunities anywhere you live.
As for bad neighborhood, I always invest in relatively bad neighborhood, that I will not like to live.
However, that does not mean I am willing to invest to too low price market.
If a large city has average sale price under replacement construction cost, that is an alarm to me.
If one part of the city is low, but next neighborhood is way higher, I consider that an opportunity.
You have to know the areas really well.
I started buying REOs on the peninsula in 2009. At that time, I knew very little about REI nor construction.
3 years later, got my broker license.
2013, got my GC license.
We have looked at hundreds of REOs in Bay Area at that time. Recently we moved our focus to east bay, and further east.
I make my own investment decisions based my gut feelings. Without knowing the area, it will be difficult to make those decisions.