I've seen gentrification spread right up to a block of S8 buildings, and then go around that block leaving it right where it was and will probably always be (undesirable). 

If you buy cheap houses that are in undesirable areas you will always struggle to find good tenants because no one wants to live there.

Probably because ADUs are ugly garage conversions or the property is undesirable or overvalued to begin with. 

Two things to consider:- before rent control in my market we got rid of undesired tenants by raising rent to above market rate.  

Meaning, if you own a larger portfolio and 1 property is experiencing undesired returns.

It's also the only house on the block, so it's surrounded by empty lots and therefore undesirable.

Do not spend time trying to turn an undesirable suspect into a client; spend time FINDING those who need your expertise and product, and are willing to PAY your desired price5.

Meaning, if you own a larger portfolio and 1 property is experiencing undesired returns.

Conduct a thorough inspection to assess the true condition of the property.High Vacancy Rates: Excessive vacancies can signal underlying issues such as poor management, undesirable location, or an oversaturated market.

So when you build your pocket neighborhood, which is an interesting concept, what's to stop an undesirable person from moving in.