I'm concerned that I have chosen a bad area, and that the people in this area simply will not be qualified by traditional renting standards. 

In very unlikely case of the bankruptcy of your chosen bank, your property is protected as the bank doesn't.

Regardless, of which entity type is chosen, or none is used, every type of property is open to investment.This may include: Single-family homesSmall multifamily properties like duplexes, triplexes, and 4 units propertiesApartment buildingsOffice buildingsIndustrial real estateHotelsRetail propertyVacant land and lotsWhat about Real Estate Investment Strategies?

It seems if you are in the good graces of the city as a chosen investor you will be shielded from a lot of regulatory oversight and your margins will be protected.

You'd be starting fresh with your own hand-chosen applicants as tenants. 

Would the verdict be chosen for the mass by a few or by the populus as a whole? 

If I were you, I would get involved in real estate with other dollars FIRST, then once you know what your returns are in your chosen niche, decide on the 401(k).

Investor, Money-for-Nothing discovered that the Bank holding the mortgage on Owner Gone’s property had chosen not to foreclose because of problems in obtaining a required “Certificate of Water Availability”.

My friends who have chosen the other route have either lost money or made returns so small that it would be completely unacceptable anywhere, save for the emotional and cultural attachment they have to New York City.

Leverage experts who've carefully chosen select high growth markets, undervalued deals, w/solid total return potentials.