This is what's great about investing in real estate.....One needs to be able to identify the "diamond in the rough" and it appears you have with this property. The next factor is to be able to project its potential relative to existing conditions, identifying those that can be changed easily, those that can be changed but with difficulty, and those that can not be changed.
There is risk with every real property purchase and it's normal to seek clarity before committing. The reality is that if the neighboring area was not "run down and shady" you probably would not be considering the property because it would be out of your price range.
The understanding you require for this venture can only come within...........
Good luck with your decision,
The "Eckler Team"