I've been involved in the Indianapolis and Kansas City markets, which are two very affordable markets, but I can tell you that nothing in an area that you would want to invest is only $40K, especially with the surge in pricing that those markets have undergone the last few years.

@Sam MillerWith a relatively small number of reputable providers across the country, choosing the right firm to work with usually involves going outside one's local area. 

There is a lot of work involved in acquiring a property.

Since you are an insurance analyst you already have an insight about property valuations and risk involved.

This will likely involve a regimented program of sending letters, physically getting out and spending time in the neighborhoods you want to buy, and networking.  

I'm looking into buying the first investment property, and it seems like the only thing I can afford at the moment is properties from a low-income neighborhood without putting me into significant financial risk. 

This is not uncommon as most small developers try to avoid involving the City in light renovation, but this seems to be more than light reno work.Is there a way to still make this deal work?

Because it was in a small town, the city got wind of it and got involved and required me to get permits for everything and bring everything up to code.

You can buy it, it's something you can work so why risk losing it?

Some of the returns have been really insane for some of them, but of course very risk as some have dropped a lot too.