The other assumption or gamble here is over time the property will appreciate and rents will increase to a point where I no longer am losing on the investment.

Too much speculation, it sounds more like a gamble than an investment.

I'd rather rent a property to someone that's highly qualified than gamble on someone with poor credit performance.

Buying TK is akin to gambling and something tells me you wouldn't take your hard earned money to vegas and play craps our roulette would you?

I don’t feel it’s growing as fast as other parts of Lexington, so it feels more like a gamble.

However, if one could pick it up for say 10 cents on the dollar, could be a gamble willing to take.  

But isnt that more of a speculation/gamble as opposed to tangible money?

It's a little bit of a gamble, but if it's a relatively small volume then you have more possibilities.Is there anything stupid about this strategy?

One thing I'm not sure of is location in this case, I suppose I could either look in a well established area and expect equity to increase through remodeling or in a less desirable area that I'm gambling will attract more attention in the future.

Playing the appreciation game can be like gambling, and if your house is really cash flowing well after all of your expenses and your mortgage payment I'm not sure if it makes sense to sell.