My guess is the the trendy hipsters that the downtown area is trying to attract may start buying and renovating in this area as things improve.I am not risk adverse, and I know that the rougher area will have clients with special needs, so I am aware that it will require more of my time on the management side.

You just can't compete with the terms or attractiveness being offered by cash buyers if you're using a conventional form of financing.Again, I can only speak for the SD market in particular, but I would think this holds true elsewhere to some degree. 

Would need to bring in nicer houses to attract people.

Make it nice and you will attract tenants who want to live there and have choices of where to live. 

On the matter of cost, insurance in the OPs example is an attractive and easily accessible option.   

Thats why Section 8 is very attractive to me right now.  

Trust me, they won't call peco because they owe peco thousands.the new inspectors would make a non hands on landlord broke for sure,but again, if you know ways around things,your okay.You have to be like your tenants and know how to work the system and forget about you morals from time to time just like your tenants.Landlords are attracted to Pottstown because of cheap properties, but cheap isn't always good.

I am not really interested in multi-family (duplexes, triplexes, etc. ) as these properties tend to attract lower quality tenants and also located in less desirable neighborhoods in my neck of the woods.Question.Anybody here actually building apartment complexes and townhomes for the purposes of holding them as investments?

Your marketing system must be attractive to the seller where as he's  motivated to sell to you.  

Attractive layouts, graphics, infographics and such help with sharing, natural link building and the overall "Dwell Time" which most certainly has an impact on your SEO.