Impact of recession, low income neighborhood properties?

[Aditya Namjoshi]

I am a newbie and I am just amazed at the success stories on this wonderful forum. But I am little apprehensive about this model and I have few questions. I would be obliged if few experts can chime in.

1) I live in SoCal and I would be investing out of state. Is it still possible for me to do Brrrr or I have to mainly look at good cash flow deals?

2) I have generally seen that low income neighborhoods and cheaper homes <50k give the best ROI (around 2% rent to value). Though these investments look enticing, how do they weather a bad economy and a recession? Or does it make more sense to investment in better neighborhoods and earn lower returns?

3) Do people use private money lenders just for flips? If I have to hold the property long term, is conventional loan the only option?

4) Would be interested to get in touch with some investors from San Diego who are investing out of state. Would like to learn from local experts on how they are investing out of state?