considering C class SFR, talk me out of it (or into it)

[Ryan McCook]

Here's my situation. I have 9 SFR rentals in Arizona. I'm in a good spot - decent equity, lowish interest, etc. I'm very interested in acquiring more and really expanding my portfolio. I could cash out refi and acquire another 9 or so. However, I'm concerned that I might be buying too high. Cashing out on my current, plus buying more, might just essentially mean I bought 18 properties at a high point in the market.

So instead, I'm thinking about holding onto my current homes with good terms, and investing in an area where homes don't tend to appreciate as much, but where I can buy for cheap and try to cash flow a little. Example, thinking about downtown Fort Worth where I can get some crummy homes on the wholesale market for around 40-50k. Maybe fix up a bit, and get the value to about 100k and refi and get most of my money out.

The thought process is, maybe during a high market, I should put my money where homes don't tend to appreciate or depreciate and try to make a little change with the rents. I know there are risks, but what are your thoughts (experienced investors) in renting to lower income/rundown areas?