I think @Richard C. hit the nail on the head.  

The people I know in Baltimore don't want to deal with section 8 anymore, even when they are in Class B- or C+ neighborhoods. 

At some point down the road after you and your brother-in-law are RE moguls, you'll want to make sure your assets are under some sort of corporate veil to protect your personal assets from a law suit.Depending on the state, if you do not purchase the property will an LLC, you could be charged transfer and recordation taxes again when you transfer the real property to your LLC or S-Copr, C-Corp, whatever.

Again, talk with your accountant (maybe a lawyer too) but...One of the biggest challenges I think a lot of 'full time conversion' REIers face is 'how to pay myself in a way that isn't self-employment' ... it becomes a huge deal when you're doing silly little things like, say, getting a cell phone, or a car loan, or a mortgage, or lines of credit... or a credit card...This is where it pays to spend the time and money to set up your LLC/C-Corp/S-Corp correctly so that you can pay yourself on a W2 or through an S-Corp and not have the problems/taxes associated with a 1099.

Class B and C?

Purchase price $45KRehab 47KARV 135KRents for $785-8004/3 single family c+ to BI can refinance it at 3.6% and take out 100K and have an infinite ROI, but it will only cash flow at $42.79 after property manager, vacancy & repair.

Sometimes we have a repair for the A/C or heat, but not much.Hope this helps

@James C.

I don't want to buy in d or c neighborhoods.

@Steven C.