I would look outside of current development areas but not too far, and look for blocks that feel good to walk down.

There's a very good chance the issue(s) you face have already been discussed and answered.Ask questions in the appropriate forum.

Good morning everyone!

My second option is no Fixer-uppers and just buy good condition house for rental investment.

I'm looking for a good city to invest in real estate with the savings from my job once I graduate.

@Andy Webb  this is a good idea. 

Good general contractors, particularly  those who build ground up must have financial means to advance projects outside of merely relying on your bank draws  and construction knowledge.

Vacancy can vary, but if you work with a good property manager, you shouldn't have your property vacant longer than 60 days out of the year. 

Work with the local experts- talk with local zoning officials, engage architects, and reach out to contractors to understand the cost and feasibility of your project.Run your numbers- do some forecasting and layout some financial models to project costs, revenues, and returns.Make sure you are utilizing your team- aforementioned real estate broker, financial advisor/ CPA, and lawyer and others as you go.Best wishes and good luck.

It's in good shape, but I'm wondering if we'd see the ROI in the refinance from a higher appraisal if we decided to rip it out and add sheetrock and recessed lighting.