Flipping has always been so dangerous, I'm surprised MORE people weren't burned doing it. It has happened all over the country and the world as well. Best best: stay awhile. That means, logically, buying in to a place you actually WANT to stay

That's what "david" said too though: only work with lower end areas when the market is appreciating currently. Right now it is not, not at least in a way we can rely on, so better to buy into the best 'hood you can afford

From an investment standpoint, you need to be patient. Wait until all hope is lost, or at least until there is break even on cashflow.
If you must invest now, buy somewhere that has seen little appreciation and rental properties have cash flow. Buying into bad neighborhoods? remember, these are the last to go up.
Currently the government has artificially lowered interest rates to prop up the economy; just wait until rates are back at >8% in to restrain inflation and see how long it takes for any appreciation to happen.
There is nothing worse than putting in the enormous work and risk of being a landlord than bleeding money while doing so. There are other investments.

SO you think, Red, from an investment stand point, makes more sense to buy into bad neighborhoods where prices are really low already rather than into better ones where prices may not have bottomed out at all yet?
But if you plan to stay through the long haul, which property will end up more profitable?

--I really don't know, so I am glad to hear everyone's thoughts here.

Hmm, can't say I agree with that david. This David is right on; the really nice places go down less, but note: they have just begun to drop:

David said:

SF will naturally be last to the party. Some R.E. prof at UCLA had a great map of LA back during the last blow-up from 1989-1997. The map showed just like now, the boom spread from the best neighborhoods to the worst, with the worst/cheapest showing the greatest percentage increase. Then during the bust the exact opposite happened–the worst/cheapest areas dropped first, the most and the fastest, while the best areas dropped last, the least, and the slowest.

the areas I picked are either backed up on open space, have ocean views, have low crime and promximity to schools and transportation. Plus, if you plan to stay through the slump, a short sale or foreclosure could be great as you would most certianly spend less getting in the door.

What constitutes a desirable neighborhood in Daly CIty- looks they are all going to the bank!