If you are selling to a developer or builder, you're then making a commercial loan, you're safe so long as your loan is not classified as a consumer loan

Not much experience on South Chicago so I should not classify entire South Chicago as C class, I think there are some good pockets too.

Hello Guys,I have a few questions about Mortgage situation.Im planning on buying my first REI.I dont own any RE right now, my plan is to buy and hold a property and keep living where I am right now.my question is that, if the property im planning to buy is classified by the lenders as a REI and not as a Primary Residence, will the mortgage conditions will be diffrenet?

Post on craigslist any local real estate classifieds website you may have.  

Also is there like some way to classify A/B/C type neighborhoods around there - something which would help identify pockets that are good to focus on ?

Here are some places to pull your people from:local rei groupsmeetupsFB TwitterCraigslist / Backpage / Ebay Classifieds has tons of investors on itOnce you get a core group going the meeting will expand naturally. 

If you want to self manage, I would recommend looking within an hour's drive at places like Levittown, Bristol, Langhorn, etc.I would classify them as C areas which have good rental cash flow.

I think you are right in that there are some good deals there, but I wouldn't classify it as "up and coming."

Let's also understand that what you might think is a commercial loan may not be, loans can be classified as to collateral, not for the purpose for which they are made.Example; a secondary market loan can be made as a non-owner occupied residential mortgage.

Call telephone numbers in the classified ads or Craigslist for different locations within your investment area.