They look rough on the exterior and most of them are located in the class C neighborhood.

A popular strategy I've seen work is to scale with properties in the C locations and then slowly upgrade your portfolio into the nicer asset classes as you progress and become more cash flow heavy. 

I am making an offer soon that I hope is similar (near retail at slight discount rate) that is class A unit in a vacation market.  

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It is close to the downtown area but the majority of area is bigger lots and on the other side of a prominent hill that gives it a more out in the country feelFoothills is the most exclusive areas with higher price points and lots of upper end shopping and diningMarana and Oro Valley are the newer "suburban" areas of Tucson that have the laid back walking and biking paths, golf clubs, snow bird / retiree type activities that draw visitors in and then get hooked and eventually buy homesIf you haven't tried Tucson yet, there is quite the variety and with snowbirds leaving, there are plenty of current STR's ready to host you as the summer warms up. 

I didn't get my money's worth from MFM.Update: Nov 2024- they have restructured their program to have 3 paths: acquisition, capital raise, or underwriting - and have a 12-class program for you to follow for each path (what happened to asset management??).

The definition of each class is heavily weighed on the income level that tenants earn in those areas.

C-class neighborhoods there are ideal for Section 8 and long-term renters.

At 7.8%, for an asset class like real estate, you want to be the lender and not the borrower...

With this comes additional transactional costs that are more likely to present themselves in this asset class than other price point SFH's.