They shouldn't of course, but it's a distinct possibility. 

The not so nice section I would not say is outright dangerous but its not a pretty section. 

I also think it's dangerous to bank on appreciation, but in the valley most neighborhoods are appreciating at rates better than 10% annual. 

People that tell you it’s dangerous may be hanging with the wrong crowd, or involved with different circles or stuck in some time warp.

However, the new Community Development Grant (CDG) program simplifies access to critical funds, offering three distinct grant categories:-Small Grants (up to $250,000)-Medium Grants ($300,001 to $5 million)-Large Grants (over $5 million)These grants can support a wide range of projects, including office, retail, cultural, industrial, and mixed-use developments of more than 10+ housing units with ground-floor retail.

The distinction is that 4 units or less is referred to as residential/small multifamily, and 5+ units is referred to as commercial multifamily.Here are the CO state guidelines for "Motels, Hotels, And Multi-Family Dwellings": https://www.sos.state.co.us/CCR/GenerateRulePdf.do?

@Stuart UdisYour post highlights an important distinction between two different lending experiences.  

That's dangerously close to the 1% rule, and a lot closer you would get to it than if you purchased a new construction.

Remember, the notion of amassing wealth without investing is a dangerous myth perpetuated by self-proclaimed experts.

As a realtor myself, I’m open to any referrals or suggestions on who might be interested in such a distinctive property.