The vulnerable neighborhoods have the potential to collapse in value, and rents.  

Obviously prices don't increase uniformly each year, some years the price may go up, some years it may go down, but if we track the prices long enough, by definition the price will trend to the average unless there are outside factors involved (Detroit collapsing, or the shifting demographics away from the midwest and towards the coastal and southern regions). 

., where it was previously headquartered.High-pressure sales tactics were used to secure money for what were promised to be “low risk” and “conservative” investments, but in reality the funds were funneled to real estate owned by Shapiro, according to the U.S. attorney’s office.Woodbridge eventually became financially insolvent, the scheme began to unravel, and Shapiro in 2017 considering filing for bankruptcy, prosecutors said.Still, he, Roseman and Acevedo continued to sell the fraudulent investments without telling investors Woodbridge was on the verge of collapse, according to the indictment.

Are you sure you are willing to do that when the world looks like it will collapse?  

Just like how the Banks got greedy before the collapse in RE. 

If markets collapse, you're going to be stuck with a negative-cash flow property that is worth less than what you had purchased it for as well.Don't get hung up on cheap property.

----------------------------------The collapse of the real estate market intown Atlanta was hugely effected by the systematic mortgage fraud that was being done by groups of scammers. 

-roughly 1,000 acre parcel for sale-Land held under an LP/LTD (multiple parcels for sale together)-owners took out large development loan pre-recession and defaulted once market collapsed-small banks bought up loans, those banks failed and got bought up by bigger banks.

I disagree with your theory in a market with higher prices and desirability other investors are willing to accept a lower return because they are fairly sure the market won't collapse out from under them. 

Think how many  folks there were that got all those mortgages that ended up collapsing the financial market.