Jeff, there is no right or wrong answer to your question, the question is how much risk you want to take for the yield you are commanding for your capital investment in real estate. 

I have asked that patrols be stepped up but the commander has limits on what he can put on the street to react to this particular incident on Diversey.This neighborhood has improved greatly over the years, but there are still pockets of problem gang members and criminal elements they interact with that are adding to the burglaries and robberies.

So, I also have been trying to make some cents of this.. you can find 4 plex's and 8 plex's selling for $130k per door (+- 800 sq ft) in a market that will pay up to $300 per square foot for 1 bed 1 bath homes (300 x 800 = $240,000) 2 bed @ 215k, 3bed @ $211k and 4 bed @$193k  found here  http://www.trulia.com/real_estate/Highlands_Ranch-Colorado/market-trends/Thus, the problem is why build a small apartment complex on open land that may command $150k per door with fewer exit strategies and smaller group of buyers, when you  can build townhomes with similar footprint, with a similar door count, a much higher sales price per door, multiple exit strategies and the whole population is your buyer. seems to me the most equitable use of soil would be to build 3 stories with the first story being single floor unit and 2nd and 3rd floor being a 2 story townhome type or condo look to allow for individual sales and possibly sell the vertical units as live in one and rent the bottom.... ah that was a cool thought  ...  

However in the same market B-class Single Family Homes need to have central air to command rents above $1,000 and keep tenants in them long term.

@Zihan HuangI am a real estate agent and investor in the Houston market.Katy, Cypress, Spring, some parts of Houston, Conroe, Tomball, Pearland are great markets.Rent growth and appreciation is steady.These cities tend to command quality tenants, and they have great schools.If you're intent on buying out-of-state, be sure to heed these additional warnings.

I don't follow your reasoning that An A or B class should necessarily command more rent from a post rehab purchase.

While there may be no {short-term} motivation to the landlord to strive for more efficiency, our experience is showing mid to long term gains in lower turnover, higher demand (mostly via word of mouth) and, more recently, the ability to command better rents.... however, we'll save that debate for one of the sustainability and efficiency threads :-)

Seems like the risk on new construction and raw land is higher and therefore should command higher return for investors. 

Some cities require it so it is something you should look into if even considering it.I would generally say no, but if I had a somewhat dumpier house and could command above market rents to compensate, it is something I would consider if I was having trouble finding good candidates and that was the only concern. 

Some guys want to pocket the subsistence and live in a 30' camper, again great return on your money, no dead beats in the military as you will get paid if set up on a automatic transfer, or call their commanding officer.Think out side of the box!!