It always helps to have someone like a local agent or PM who is very familiar with the area to tell you as things can often be block by block.

Purchase price: $285,000 Cash invested: $95,000 Multi family property in a booming city expecting major growth with mountains blocking expansion.

Darn, this is draining my cashflow! 

Or supply and drain?

I want to invest in a Sub200K area right now that will put me in about a B neighborhood with working class folks who care about their surroundings/block.

But one bad tenant, or one deferred maintenance item can turn that great cash flow into a big cash drain.  

(Just an FYI: most sophisticated CPA firms (i.e.not turbotax or H&R block) have audit risk software that basically calculates your chances of being audited based on the tax stances you take so another good reason to invest in a good CPA)

For example, somebody makes a big burn mark on the butcher-block countertop.

I imagine that the ARV of a Tear-down would be EXACTLY the same as an equivalent vacant (serviced) block (based on comps).

Some thoughts are - the neighborhood or block may be high crime / poverty even if the overall area is considered nicer (like a D block in a B area), the property is overpriced and the seller won't budge / low motivation, liens on the property (I'm not really familiar with tax and title and legal stuff but maybe something like that?)