Now that I've given you a system for finding high cash flowing working class neighborhoods and properties, I need to emphasize this: You can NOT drop the ball on the tenant screening! You NEED to screen your tenants. It is not a myth that in these neighborhoods, there is a higher chance of getting someone who's money is stretched tight. Its not a good or bad thing, it just is a fact of a lower income neighborhood. However, this is how you deal with it, and learn from my mistakes so it doesn't leave a bad taste in your mouth.
In this, I refer to the BiggerPockets Ultimate Tenant Screening Guide (http://www.biggerpockets.com/renewsblog/2013/01/27/tenant-screening/
), which I highly recommend. I don't field the calls personally since I use property management, but I get the accumulated documents, background check, and credit reports as well as feed back from rental references.
This guide is excellent, as it is very strict. In some cases, and in my neighborhoods, there are cases, however, where I have learned to be more lenient, and other guidelines that I absolutely follow.
Again. If you did NOT get this the first time: Your life as a buy and hold investor in a working class neighborhood will go A LOT more smoothly if you stick to these points, and are patient. Don't just take your first applicant unless they are not going to cause you economic problems in the future. If you do your renovations right, you should have people beating your door down.