I am interested in buying two properties - on a scale of A-C, one in a class A neighborhood, and while I don't think the math would be quite there at the higher end, I'm open as far as budget, and another in a class B neighborhood that's shaping up well. 

Local Planning commissions in these hillside neighborhoods are notoriously difficult and lengthy to approve plans.

I looked at a 2-unit bldg. in a not so great neighborhood.

I'd say this is a B neighborhood.

The lenders will foreclose at some point and if you look them up, most of them are already in foreclosure by the banks.Also, an hoa having taken back 100 units is a terrible sign for the development/neighborhood.

I currently own a duplex that I am house hacking, however, I would like this next deal to be in a better neighborhood to attract higher quality tenants.

I’d buy two multi family homes in c class neighborhood

TIA.If you want this house (that's the first question) and it has some cosmetic deficiencies and it's in a great neighborhood, I would offer him a lower sales price (like 30% lower if that's more in line with what the property will appraise for), take his financing if:there is no prepayment penalty and it's 100% financing the cash flow is acceptableand then refinance it with a lower rate product with no seasoning on title or wait out the conventional seasoning period and refinance it with a Fannie Mae loan. 

It’s in a good neighborhood.

The neighborhood where I have my units is made up of about 30 individual 4-plexes, all 2/2 or 3/2, and 3 different models.