Location vs. Cash Flow?

[Naftali Tolibas]

I've found a 4-plex that has a cash flow of about $400 (which is the highest I've found). This is assuming 80% of market rents in the area, however, it is in a C neighborhood (w/ respect to the A-D grading scale), and there are a couple of units surrounding that have been vacant for a couple months(going at market rent). I fear that I'd either get poor quality tenants, or that I'll be vacant for longer periods of time. The opportunity is there, but I'm not sure how to go about it. I know I can get a sweet deal because it's been on the market for a year, and it only has cosmetic issues, so far. 2 units are rented out, 2 are vacant. I'll also be house hacking.

Personally I'd live there, but not without caution, and more because I know that the cash flow and opportunity is there. But if I had a non-biased choice, I don't think I would, which causes the concern of the type of tenants I'd attract.

On the other side, there is a duplex that is in a B neighborhood, but the cashflow is at about $200, assuming I raise the rents to market. Personally I'd live there, free of choice. Not sure if I can house hack because we're unsure of the occupancy at the moment.

I know it will make more sense in the long run, but apart of me doesn't want to miss out the other deal, because I haven't found one that has the opportunity like the 4-plex. My only concern would be getting quality tenants without stay vacant for long periods, which I know I can get in a B neighborhood. Any advice is appreciated.

Please let me know if I need to clarify.

[Job Hempy]

I currently operate my three rentals in C class neighborhoods.

I'm cash flowing between 350-450 per door. I do purchase cash and manage myself, so my only expenses are repairs, cap ex, and insurance. Tenants cover water and other utilities.

I've had one issue so far, where I had to get a tenant out due to non pay. We agreed she had two weeks to move and I wouldn't file eviction. She left, place was in solid shape. Had it occupied about 5-6 days later.

WHY I THINK IVE FOUND SUCCESS: I do not "over rehab" these properties.  I simply use higher end finishings to attract the higher end customer base in the low end neighborhood. I source my "higher end finishings" typically from Habitat for Humanity ReStore it, where I get discounted material.  There are definitely more bad tenants than there are good tenants in these neighborhoods, so I'm unsure how much I can scale this model, but its worked thus far.