So we have "profits" from (a) appreciation of market value (b) cash-flow on rents (c) mortgage paydown via tenants contribution's toward purchase price (hey, what else do you call it when you paid 25% down and tenants paid the other 75% of the purchase price?

If you have a C class rental but screen it like its an A class rental, some landlords might believe they are doing a superior job!

You might even want to setup a C-Corp (for tax and liability reasons as well) to manage the business with the guests and pay rent to your LLC. 

I like the asset class IE not C class in the deep south.

One of the biggest challenges of investing in Rustbelt cities is knowing where to invest and properly understanding the cooresponding pros & cons.Here's copy & paste advice we share to help to address this challenge:-------------------------------------------------------------------------------------------Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a Class A property in Class D area, what quality of tenant will you get?

They are not listed with American Association of Private Lenders and have a c- rating with the bbb. 

Actually the IRS does not tell us what we can invest in, only what is disallowed (life insurance contracts and collectibles).Allowable investments for SDIRA investing include the following:Residential real estate, including: apartments, single family homes, and duplexesCommercial real estate Undeveloped or raw landREITs (Real Estate Investment Trusts)Real estate notes (mortgages and deeds of trusts)Promissory notes Private limited partnerships, limited liability companies, and C corporationsTax lien certificatesOil and gas investmentsPrivate stock offerings, private placementsJudgments/structured settlementsGold bullion Factoring investments

If we stay with our high-paying jobs, we can carry the properties, but we(spouse and I) are too afraid to invest in Class B or C neighborhoods.

If we are talking rental properties, then I completely agree with B, C, and D that he mentions.

If you start buying properties in Class C neighborhoods, you can take advantage of higher and more stable rents/renters with Section 8 vouchers.