It sounds like a riskier way to do it - lower quality housing and LQ tenants means more potential for problems. That said I've read online about people doing the same thing with very good results. It's no different to the cheap housing in the States that rents in poor neighbourhoods for great returns - there's a decent thread on here somewhere about someone doing that to fund a location independent lifestyle.
I'd recommend against investing in an area you don't have good local knowledge in, or somewhere far from home where you can't keep an eye on the property or tenants. You can use an agent to help but you need someone you can really trust, in your case your mate who's already doing it is the best option. The plan sounds good to me, except hold around £10k back for any unexpected repairs you might have. Also after you've mortgaged the houses to raise funds look at buying a different type of property like a student let or apartment to rent to professionals, so your portfolio is diversified.
I'd recommend against investing in an area you don't have good local knowledge in, or somewhere far from home where you can't keep an eye on the property or tenants. You can use an agent to help but you need someone you can really trust, in your case your mate who's already doing it is the best option. The plan sounds good to me, except hold around £10k back for any unexpected repairs you might have. Also after you've mortgaged the houses to raise funds look at buying a different type of property like a student let or apartment to rent to professionals, so your portfolio is diversified.