Cap rate vs neighborhood

[Marcus ONG]

Hi.

I was looking around the Arizona Phoenix area for a high cap rate multifamily. And I found that those in the region of 10% are all in the low income area.

Is that a norm or I should be looking harder?
I am concern of all the problems that may come with the neighborhood ie higher crime/ drugs activities/ violence/ thief etc. Not to mention the quality of tenants.

Advice is much appreciated.

Also can anyone recommend banks or lenders who will lend to non-resident?

[Jon Klaus]

It is the norm to find higher cap rates (on paper) in worse properties/areas. These properties are often more problematic and management intensive. They can be good investments, especially with good turnaround strategy and execution. I think that would be very difficult from a long distance.

I'm looking at class C multi-family properties with hair on them, but I'd plan to be on site nearly daily during the turnaround.